| Basis of Presentation and Summary of Significant Accounting Policies (As Restated) | Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (As Restated) Basis of Presentation The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future period. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K, for the period ended December 31, 2020, filed by the Company with the SEC on March 30, 2021. Restatement of Previously Reported Financial Statements In preparation of the Company’s unaudited condensed financial statements for the quarterly period ended September 30, 2021, the Company concluded it should restate its previously issued financial statements to classify all Class A common stock subject to possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock 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. Although the Company did not specify a maximum redemption threshold, its amended and restated certificate of incorporation currently provides that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable shares classified as temporary equity as part of net tangible assets. Effective with these condensed financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. In connection with the change in presentation for the Class A common stock subject to possible redemption, the Company has restated 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 participate pro rata in the income and losses of the Company. In accordance with SEC Staff Accounting Bulletin No. 99, “ Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements The impact of the restatement to the Post-IPO Balance Sheet is presented below.
As of February 11, 2021:
As Previously Reported
Adjustment
As Restated
Total assets
$
555,026,800
$
-
$
555,026,800
Total liabilities
52,750,225
-
52,750,225
Class A common stock subject to possible redemption
497,276,570
54,723,430
552,000,000
Preferred stock, par value $0.0001
-
-
-
Class A common stock, par value $0.0001
(105
)
105
-
Class B common stock, par value $0.0001
1,380
-
1,380
Additional paid-in capital
6,091,736
(6,091,736
)
-
Accumulated deficit
(1,093,006
)
(48,630,419
)
(49,723,425
)
Total stockholders’ equity (deficit)
5,000,005
(54,723,430
)
(49,723,425
)
Total liabilities, Class A common stock subject to possible redemption and Total stockholders' equity (deficit)
$
555,026,800
$
-
$
555,026,800
The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of March 31, 2021:
As of March 31, 2021 (unaudited)
As Previously Reported
Adjustment
As Restated
Total assets
$
554,614,387
$
-
$
554,614,387
Total liabilities
55,677,351
-
55,677,351
Class A common stock subject to possible redemption
493,937,030
58,062,970
552,000,000
Preferred stock, par value $0.0001
-
Class A common stock, par value $0.0001
581
(581
)
-
Class B common stock, par value $0.0001
1,380
-
1,380
Additional paid-in capital
9,430,590
(9,430,590
)
-
Accumulated deficit
(4,432,545
)
(48,631,799
)
(53,064,344
)
Total stockholders’ equity (deficit)
5,000,006
(58,062,970
)
(53,062,964
)
Total liabilities, Class A common stock subject to possible redemption and Total stockholders' equity (deficit)
$
554,614,387
$
-
$
554,614,387
The Company’s statement of stockholders’ equity has been restated to reflect the changes to the impacted stockholders’ equity accounts described above. The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the three months ended March 31, 2021:
For the Three Months Ended March 31, 2021 (unaudited)
As Previously Reported
Adjustment
As Restated
Supplemental Disclosure of Noncash Financing Activities:
Initial value of Class A common stock subject to possible redemption
$
497,276,570
$
(497,276,570
)
$ -
Change in value of Class A common stock subject to possible redemption
$
(3,339,540
)
$
3,339,540
$ - The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of June 30, 2021:
As of June 30, 2021 (unaudited):
As Previously Reported
Adjustment
As Restated
Total assets
$
554,006,496
$
-
$
554,006,496
Total liabilities
54,774,340
-
54,774,340
Class A common stock subject to possible redemption
494,232,150
57,767,850
552,000,000
Preferred stock, par value $0.0001
-
-
-
Class A common stock, par value $0.0001
578
(578
)
-
Class B common stock, par value $0.0001
1,380
-
1,380
Additional paid-in capital
9,135,473
(9,135,473
)
-
Accumulated deficit
(4,137,425
)
(48,631,799
)
(52,769,224
)
Total stockholders’ equity (deficit)
5,000,006
(57,767,850
)
(52,767,844
)
Total liabilities, Class A common stock subject to possible redemption and Total stockholders' equity (deficit)
$
554,006,496
$
-
$
554,006,496
The Company’s statement of stockholders’ equity has been restated to reflect the changes to the impacted stockholders’ equity accounts described above. The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the six months ended June 30, 2021:
For the Six Months Ended June 30, 2021 (unaudited)
As Previously Reported
Adjustment
As Restated
Supplemental Disclosure of Noncash Financing Activities:
Initial value of Class A common stock subject to possible redemption
$
497,276,570
$
(497,276,570
)
$ -
Change in value of Class A common stock subject to possible redemption
$
(3,044,420
)
$
3,044,420
$ - The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per share is presented below for the Affected Quarterly Periods:
Earnings Per Share for Class A common stock
As Previously Reported
Adjustment
As Restated
For the three months ended March 31, 2021 (unaudited):
Net loss
$
(4,430,495
)
$
-
$
(4,430,495
)
Weighted average shares outstanding
55,200,000
(25,146,667
)
30,053,333
Basic and diluted loss per share
$
-
$
(0.10
)
$
(0.10
)
For the three months ended June 30, 2021 (unaudited)
Net income
$
295,120
$
-
$
295,120
Weighted average shares outstanding
55,200,000
-
55,200,000
Basic and diluted earnings per share
$
-
$
-
$
0.00
For the six months ended June 30, 2021 (unaudited)
Net loss
$
(4,135,375
)
$
-
$
(4,135,375
)
Weighted average shares outstanding
55,200,000
(12,503,867
)
42,696,133
Basic and diluted loss per share
$
-
$
(0.07
)
$
(0.07
)
Earnings Per Share for Class B common stock
As Previously Reported
Adjustment
As Restated
For the three months ended March 31, 2021 (unaudited)
Net loss
$
(4,430,495
)
$
-
$
(4,430,495
)
Weighted average shares outstanding
12,980,000
-
12,980,000
Basic and diluted loss per share
$
(0.34
)
$
(0.24
)
$
(0.10
)
For the three months ended June 30, 2021 (unaudited)
Net income
$
295,120
$
-
$
295,120
Weighted average shares outstanding
13,800,000
-
13,800,000
Basic and diluted earnings per share
$
0.02
$
(0.02
)
$
0.00
For the six months ended June 30, 2021 (unaudited)
Net loss
$
(4,135,375
)
$
-
$
(4,135,375
)
Weighted average shares outstanding
13,392,265
-
13,392,265
Basic and diluted loss per share
$
(0.31
)
$
0.24
$
(0.07
)
Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of September 30, 2021 and December 31, 2020. Investments Held in Trust Account The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. Trading securities and investments in money market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000 and investments held in Trust Account. As of September 30, 2021 and December 31, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “ Fair Value Measurements Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
•
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
•
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
•
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Offering Costs Associated with the Initial Public Offering Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities are expensed as incurred, presented as non-operating expenses in the statement of operations. Offering costs associated with the Class A common stock issued were charged against the carrying value of the shares of Class A common stock upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. Derivative Warrant Liabilities The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The Public Warrants and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The initial fair value of the Public Warrants was estimated using a Black-Scholes option pricing model. The fair value of the Public Warrants as of September 30, 2021 is based on observable listed prices for such warrants. The fair value of the Private Placement Warrants as of September 30, 2021 is determined using Black-Scholes option pricing model. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Class A Common Stock Subject to Possible Redemption The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Class A common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Class A common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, 55,200,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s unaudited condensed balance sheet. There were no shares of Class A common stock issued and outstanding as of December 31, 2020. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A common stock resulted in charges against additional paid-in capital and accumulated deficit. Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “ Income Taxes income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of September 30 , 2021 and December 31, 2020 , the Company had deferred tax assets of approximately $1.6 million an d $431 , respectively, with a full valuation allowance against them . ASC 740 prescribes a recognition threshold and a measurement attribute for the unaudited condensed financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company’s currently taxable income primarily consists of interest and dividends earned and unrealized gains on investments held in the Trust Account. No amounts were accrued for the payment of interest and penalties as of September 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Income (Loss) Per Share of Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period. The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the private placement warrants to purchase an aggregate of 23,160,000 shares of Class A common stock in the calculation of diluted income (loss) per share, because they are contingently exercisable, and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for the three and nine months ended September 30, 2021. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net loss per share for each class of common stock: The following table reflects the calculation of basic and diluted net income (loss) per share of common stock:
For the Three Months Ended September 30, 2021
For the Nine Months Ended September 30, 2021
Class A
Class B
Class A
Class B
Basic and diluted net income (loss) per common stock
Numerator:
Allocation of net income (loss)
$
143,438
$
35,859
$
(3,070,492
)
$
(885,586
)
Denominator:
Basic and diluted weighted average common stock outstanding
55,200,000
13,800,000
46,909,890
13,529,670
Basic and diluted net income (loss) per common stock
$
0.00
$
0.00
$
(0.07
)
$
(0.07
) Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) also -linked T ted ASU 2020-06 The Company’s 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 financial statements. |
