RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS Accounting for Class A common stock subject to possible redemption: The Company concluded it should restate its previously issued financial statements to classify all Class A common stock in temporary equity. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the Company require shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Class A common stock in permanent equity, or total stockholders’ equity. Although the Company did not specify a maximum redemption threshold, its charter currently provides that the Company will not redeem its Class A common stock in an amount that would cause its net tangible assets to be less than $5,000,001. Also, in connection with the change in presentation for the Class A common stock subject to possible redemption, the Company also revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company. As a result, the Company restated its previously filed financial statements to present all redeemable Class A common stock as temporary equity and to recognize a re-measurement adjustment from the initial book value to redemption value at the time of its Initial Public Offering. Accounting for warrants: In connection with the restatement and reissuance of the previously issued financial statements for the Class A common stock classification error described above, the Company concluded that its previously issued financial statements should be restated to reflect the warrant accounting restatement (and related changes) described in footnote 2 of the Company’s Annual Report on Form 10-K/A No. 1, filed with the SEC on May 14, 2021, which superseded the previously issued Form 10-Q for the period ended September 30, 2020. The Company previously accounted for its outstanding Public Warrants and Private Placement Warrants as components of equity instead of as derivative liabilities. Upon review of the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (SPACs)” promulgated by the SEC on April 12, 2021, the Company’s management further evaluated the warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company should reclassify the warrants as derivative liabilities, with changes in fair value recognized in earnings each period. Impact of the Restatements The impact of the restatements on the balance sheet, statements of operations and statement of cash flows for the Relevant Period is presented below. The restatements had no impact on net cash flows from operating, investing or financing activities. As of September 30, 2020 As Previously Restatement As Restated Balance Sheet Total assets $ 177,874,825 $ - $ 177,874,825 Liabilities and stockholders’ equity Total current liabilities $ 643,605 $ - $ 643,605 Deferred underwriting commissions 6,125,000 - 6,125,000 Derivative warrant liabilities - 14,864,500 14,864,500 Total liabilities 6,768,605 14,864,500 21,633,105 Class A common stock subject to possible redemption, 166,106,210 8,893,790 175,000,000 Stockholders’ equity (deficit) Preferred stock- $0.0001 par value - - - Class A common stock - $0.0001 par value 89 (89 ) - Class B common stock - $0.0001 par value 503 - 503 Additional paid-in-capital 5,110,808 (5,110,808 ) - Accumulated deficit (111,390 ) (18,647,393 ) (18,758,783 ) Total stockholders’ equity (deficit) 5,000,010 (23,758,290 ) (18,758,280 ) Total liabilities and stockholders’ equity (deficit) $ 177,874,825 $ - $ 177,874,825 For the Three Months Ended As Previously Reported Restatement Adjustment As Restated Unaudited Condensed Statement of Operations Loss from operations $ (113,291 ) $ - $ (113,291 ) Other (expense) income: Interest earned on investments held in Trust Account 2,426 - 2,426 Change in fair value on derivative warrant liabilities - - - Offering costs associated with warrants recorded as liabilities - (379,848 ) (379,848 ) Total other (expense) income 2,426 (379,848 ) (377,422 ) Net loss $ (110,865 ) $ (379,848 ) $ (490,713 ) Weighted-average shares outstanding, of Class A common stock 17,500,000 (16,153,846 ) 1,346,154 Basic and Diluted net loss per share, Class A common stock $ 0.00 $ (0.09 ) $ (0.09 ) Weighted-average shares outstanding, of Class B convertible common stock 4,375,000 - 4,375,000 Basic and Diluted net loss per share, Class B convertible common stock $ (0.03 ) $ (0.06 ) $ (0.09 ) Impact of the Restatements (Cont.) For the period from March 18, 2020 (inception) through September 30, 2020 As Previously Reported Restatement Adjustment As Restated Unaudited Condensed Statement of Operations Loss from operations $ (113,816 ) $ - $ (113,816 ) Other (expense) income: Interest earned on investments held in Trust Account 2,426 - 2,426 Change in fair value on derivative warrant liabilities - - - Offering costs associated with warrants recorded as liabilities - (379,848 ) (379,848 ) Total other (expense) income 2,426 (379,848 ) (377,422 ) Net loss $ (111,390 ) $ (379,848 ) $ (491,238 ) Weighted-average shares outstanding, of Class A common stock 17,500,000 (16,878,173 ) 621,827 Basic and Diluted net loss per share, Class A common stock $ 0.00 $ (0.10 ) $ (0.10 ) Weighted-average shares outstanding, of Class B convertible common stock 4,375,000 - 4,375,000 Basic and Diluted net loss per share, Class B convertible common stock $ (0.03 ) $ (0.07 ) $ (0.10 ) For the period from March 18, 2020 As Previously Reported Restatement Adjustment As Restated Unaudited Condensed Statement of Cash Flows Net loss $ (111,390 ) $ (379,848 ) $ (491,238 ) Adjustment to reconcile net loss to net cash used in operating activities 70,670 379,848 450,518 Net cash used in operating activities (40,720 ) - (40,720 ) Net cash used in investing activities (175,000,000 ) - (175,000,000 ) Net cash provided by financing activities 177,875,690 - 177,875,690 Non-Cash Investing and Financing Activities Initial classification of Class A common stock subject to possible redemption $ 166,224,660 $ (166,224,660 ) $ - Going Concern In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company is unable to complete a Business Combination by September 24, 2022, then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after September 24, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date. |