CLASS ACCELERATION CORP. References to the "Company," "us," "our" or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report
including, without limitation, statements under this "Management's Discussion
and Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward- looking statements. When used in
this Report, words such as "anticipate," "believe," "estimate," "expect,"
"intend" and similar expressions, as they relate to us or the Company's
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of management, as well as assumptions made by, and
information currently available to, the Company's management. Actual results
could differ materially from those contemplated by the forward- looking
statements as a result of certain factors detailed in our filings with the
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated in
Our efforts to identify a prospective initial Business Combination target are not limited to a particular industry, sector or geographic region. While we may pursue an initial Business Combination opportunity in any industry or sector, since our initial public offering, we have capitalized on the ability of our management team to identify, acquire and operate a business or businesses that can benefit from our management team's established global relationships and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including media and entertainment.
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Results of Operations
Our entire activity since inception up to
For the three months ended
For the nine months ended
For the three months ended
For the nine months ended
Liquidity and Capital Resources; Going Concern
As of
Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay our taxes, if any, the funds held in the Trust Account will not be released until the earliest to occur of (a) the completion of the initial Business Combination, (b) the redemption of any Public Shares properly tendered in connection with a stockholder vote to amend our second amended and restated certificate of incorporation, and (c) the redemption of all of our Public Shares if we have not completed the initial Business Combination within 24 months from the closing of the IPO, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
The following table provides a summary of our net cash flows from operating,
investing, and financing activities for the nine months ended
Net cash used in operating activities
(398,097 )
Cash, beginning of the period 421,663
Cash, end of the period $ 23,566 The following table provides a summary of our net cash flows from operating,
investing, and financing activities for the nine months ended
Net cash used in operating activities
546,153
Cash, beginning of the period 76,602
Cash, end of the period $ 622,755
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Prior to the completion of the IPO, our liquidity needs had been satisfied
through a payment from the Sponsor of
On
Subsequent to the consummation of the IPO and Private Placement, our liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account.
In addition, 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, provide us Working Capital
Loans. To date, there is
In the future 12 months from the date the financial statements are issued, we
will have to pay for expenses in connection with any Business Combination,
accounting fees, audit and review fees, quarterly
Based upon the above analysis, management determined that these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued.
Critical Accounting Policies and Estimates
The preparation of the unaudited condensed financial statements in conformity with US GAAP requires 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 expenses during the reporting period. Actual results could differ from those estimates. We have identified the following as our critical accounting policies:
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 Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." 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 common stock 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 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 feature certain redemption rights that is considered to be outside of the Company's control and subject to the occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of the Company's balance sheets.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.
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Net Income Per Share of Common Stock
The Company has two classes of shares, which are referred to as Class A common
stock (the "Common Stock") and Class B common stock (the "Founder Shares").
Earnings are shared pro rata between the two classes of shares. Public and
private warrants to purchase 20,112,500 shares of Common Stock at
Warrant Liabilities and Convertible Promissory Note -
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and Hedging". We account for the Public and Private Placement warrants (collectively "Warrants"), as either equity or liability classified instruments based on an assessment of the specific terms of the Warrants and the applicable authoritative guidance. The assessment considers whether the Warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of our control.
Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The derivative instruments are subject to a number of critical estimates as the significant inputs that drive the changes in fair value are determined by the Monte Carlo Model and not based solely on the observable inputs such as quoted prices for identical instruments in active markets as is the case with Level 1 classified securities.
The Company accounted for the 20,112,500 warrants issued in connection with the IPO and Private Placement in accordance with the guidance contained in FASB ASC 815-40. Such guidance provides that, because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
Off-Balance Sheet Arrangements
As of
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's condensed financial statements.
Contractual Obligations Administrative Service Fee
We have agreed to pay our Sponsor, commencing on the date of the consummation of
the IPO, a total of
Underwriters Agreement
The underwriters are entitled to a deferred underwriting discount of 3.5% of the
gross proceeds of the IPO, or
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