References to the "Company," "our," "us" or "we" refer to D8 Holdings Corp. The
following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the unaudited
consolidated 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.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Such statements include, but are not limited
to, possible business combinations and the financing thereof, and related
matters, as well as all other statements other than statements of historical
fact included in this Form 10-Q. Factors that might cause or contribute to such
a discrepancy include, but are not limited to, those described in our other
Securities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on May 6, 2020. We were formed for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses (the "Business Combination"). Although
we are not limited to a particular industry or sector for purposes of
consummating a Business Combination, we intend to focus our search on the
consumer retail sector. We are an emerging growth company and, as such, we are
subject to all of the risks associated with emerging growth companies.
Our sponsor is D8 Sponsor LLC, a Cayman Islands limited liability company (the
"Sponsor"). Our registration statement for the initial public offering (the
"Initial Public Offering") was declared effective on July 14, 2020. On July 17,
2020, we consummated the Initial Public Offering of 30,000,000 units (the
"Units") at $10.00 per Unit, generating gross proceeds of $300.0 million. Each
Unit consists of one Class A ordinary share (the "Public Shares") of ours, par
value $0.0001, and one-half of one redeemable warrant (the "Public Warrants") of
ours, with each warrant entitling the holder thereof to purchase one Class A
Ordinary Share for $11.50 per share, subject to adjustment. On July 24, 2020,
the underwriters exercised the over-allotment option in full and purchased an
additional 4,500,000 Units (the "Over-Allotment Units"), generating additional
gross proceeds of $45.0 million. We incurred total offering costs of
approximately $19.5 million in underwriting fees (inclusive of approximately
$12.1 million in deferred underwriting fees).
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 8,000,000 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants")
to our Sponsor, each exercisable to purchase one Class A ordinary share at
$11.50 per share, at a price of $1.00 per Private Placement Warrant, generating
gross proceeds of $8.0 million, and incurring offering costs of approximately
$16,000. On July 24, 2020, simultaneously with the sale of the Over-Allotment
Units, we consummated a private sale of an additional 900,000 Private Placement
Warrants to our Sponsor, generating gross proceeds of $900,000.
Upon the closing of the Initial Public Offering and the Private Placement,
$345.0 million ($10.00 per Unit) of the net proceeds of the Initial Public
Offering and certain of the proceeds of the Private Placement was placed in
trust accounts ("Trust Accounts"), located in the United States with Continental
Stock Transfer & Trust Company acting as trustee, and is invested only in U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act of 1940 (the "Investment Company Act"), having a maturity
of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in
direct U.S. government treasury obligations, until the earlier of: (i) the
completion of a Business Combination or (ii) the distribution of the Trust
Account.
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Our management has broad discretion with respect to the specific application of
the net proceeds of the Initial Public Offering and the sale of Private
Placement Units, although substantially all of the net proceeds are intended to
be applied generally toward consummating a Business Combination.
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or July 17, 2022 (the "Combination
Period"), we will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the Public Shares, at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Accounts, including
interest earned on the funds held in the Trust Accounts and not previously
released to us (less taxes payable and up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding Public Shares,
which redemption will completely extinguish Public Shareholders' rights as
shareholders (including the right to receive further liquidation distributions,
if any) and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining shareholders and our board of
directors, liquidate and dissolve, subject, in the case of clauses (ii) and
(iii), to our obligations under Cayman Islands law to provide for claims of
creditors and in all cases subject to the other requirements of applicable law.
Results of Operations
Our entire activity since inception through June 30, 2021 related to our
formation, the preparation for the Initial Public Offering, and since the
closing of the Initial Public Offering, the search for a prospective initial
Business Combination. We have neither engaged in any operations nor generated
any revenues to date. We will not generate any operating revenues until after
completion of our initial Business Combination. We will generate non-operating
income in the form of net gain from investments held in Trust Accounts. We
expect to incur increased expenses as a result of being a public company (for
legal, financial reporting, accounting and auditing compliance), as well as for
due diligence expenses.
For the three months ended June 30, 2021, we had net loss of approximately $21.0
million, which consisted of approximately $1.4 million in general and
administrative costs, $30,000 in administrative fees - related party, and
approximately $19.6 million in change in fair value of warrant liabilities,
partially offset by approximately $7,000 in net gain from investments held in
Trust Accounts.
For the six months ended June 30, 2021, we had net loss of approximately $24.2
million, which consisted of approximately $2.9 million in general and
administrative costs, $60,000 in administrative fees - related party, and
approximately $21.3 million in change in fair value of warrant liabilities,
partially offset by an approximate $74,000 net gain from investments held in
Trust Accounts.
For the period from May 6, 2020 (inception) through June 30, 2020, we had net
loss of approximately $27,000, which consisted solely of general and
administrative expenses.
Liquidity and Capital Resources
As of June 30, 2021, we had approximately $236,000 in our operating bank account
and a working capital deficit of approximately $1.9 million.
Prior to the completion of the Initial Public Offering, our liquidity needs had
been satisfied through the payment of $25,000 of offering costs by our Sponsor
in exchange for the issuance of the Founder Shares, and a loan of approximately
$127,000 pursuant to the Note issued to our Sponsor. We repaid the Note in full
on July 17, 2020. Subsequent to the consummation of the Initial Public Offering
and Private Placement, our liquidity needs have been satisfied with the proceeds
from the consummation of the Private Placement not held in the Trust Accounts.
In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor may, but is not obligated to, provide us the Working
Capital Loans. To date, there are no Working Capital Loans outstanding.
In connection with the Company's assessment of going concern considerations in
accordance with Accounting Standards Codification ("ASC") 205-40, "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 July 17, 2022, then the Company may cease all operations except
for the purpose of liquidating. In addition, the Company has incurred and
expects to incur significant costs in pursuit of its financing and acquisition
plans. These conditions raise substantial doubt about the Company's ability to
continue as a going concern within one year after the date that the financial
statements are issued. There is no assurance that the Company's plans to
consummate a Business Combination or raise additional funds will be successful
within the Combination Period. No adjustments have been made to the carrying
amounts of assets or liabilities should the Company be required to liquidate
after July 17, 2022.
We continue to evaluate the impact of the COVID-19 pandemic and have concluded
that the specific impact is not readily determinable as of the date of the
balance sheet. The unaudited consolidated condensed financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
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Proposed Business Combination
On April 15, 2021, our Company (which shall migrate to and domesticate as a
Delaware corporation prior to the Closing Date (as defined below)) entered into
an agreement and plan of merger, by and among our Company, Snowball Merger Sub,
Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the
Company ("Merger Sub"), Vicarious Surgical Inc. ("Vicarious Surgical"), and Adam
Sachs, in his capacity as the stockholder representative (the "Stockholder
Representative") (as it may be amended and/or restated from time to time, the
"Merger Agreement").
The Merger
The Merger Agreement provides that (a) Merger Sub will merge with and into
Vicarious Surgical, with Vicarious Surgical being the surviving corporation of
the merger. The transactions contemplated by the Merger Agreement are referred
to herein as the "Proposed Business Combination." The time of the closing of the
Proposed Business Combination is referred to herein as the "Closing." The date
of the Closing is referred to herein as the "Closing Date."
The Domestication
At the end of the business day immediately prior to the Closing, subject to the
satisfaction or waiver of the conditions of the Merger Agreement, and prior to
an investment by the PIPE Investors (as defined below) the Company will migrate
to and domesticate as a Delaware corporation in accordance with Section 388 of
the Delaware General Corporation Law, as amended, and the Cayman Islands
Companies Act (As Revised) (the "Domestication").
By virtue of the Domestication and subject to the satisfaction or waiver of the
conditions of the Merger Agreement, including approval of the Company's
shareholders: (i) each of the then issued and outstanding Class B ordinary
shares of the Company, par value $0.0001 per share (each, a "Class B Share"),
will convert automatically, on a one-for-one basis, into a Class A ordinary
share of the Company, par value $0.0001 per share (each, a "Class A Share");
(ii) immediately following the conversion described in clause (i), each of the
then issued and outstanding Class A Shares will convert automatically, on a
one-for-one basis, into a share of Class A common stock, par value $0.0001 per
share, of the Company (after the Domestication) (the "Domesticated Company Class
A Stock"), each of which will carry voting rights of one vote per share; (iii)
each of the then issued and outstanding warrants to purchase one Class A Share
("Cayman Company Warrant") will automatically become a warrant to acquire one
share of Domesticated Company Class A Stock ("Domesticated Company Warrant")
pursuant to the related warrant agreement; and (iv) each of the then issued and
outstanding units of the Company (the "Cayman Company Units") shall be separated
into its component parts, consisting of one share of Domesticated Company Class
A Stock and one-half of one Domesticated Company Warrant.
Concurrently with the Domestication and subject to the satisfaction or waiver of
the conditions of the Merger Agreement, the Company will also file (a) a
certificate of incorporation with the Secretary of State of Delaware in the form
attached to the Merger Agreement (the "Company Domesticated Charter") and (b)
adopt bylaws in the form attached to the Merger Agreement (the "Company
Domesticated Bylaws"), to (among other things) establish a revised dual class
structure with shares of Domesticated Company Class A Stock and shares of Class
B common stock, par value $0.0001 per share, of the Company (after
Domestication), with the same economic terms as Domesticated Company Class A
Stock, but carrying increased voting rights in the form of 20 votes per share
(the "Domesticated Company Class B Stock" and together with the Domesticated
Company Class A Stock, the "Domesticated Company Stock").
Consideration and Structure
Under the Merger Agreement, we have agreed to acquire all of the outstanding
shares of common stock of Vicarious Surgical for approximately $1 billion in
aggregate consideration. Vicarious Surgical stockholders (other than Adam Sachs,
Barry Greene and Sammy Khalifa (the "Founders")) will receive shares of
Domesticated Company Class A Stock (valued at $10.00 per share), equal to (i)
the amount of shares of Company Capital Stock (as defined in the Merger
Agreement) owned by such Company Stockholder (as defined in the Merger
Agreement) multiplied by (ii) the Fully Diluted Adjusted Merger Consideration
(as defined by the Merger Agreement) for each share in such class of Company
Capital Stock (as defined in the Merger Agreement). The Founders will receive
shares of Domesticated Company Class B Stock equal to (i) the amount of shares
of Company Class A Common Stock (as defined in the Merger Agreement) owned by
such Founder multiplied by (ii) the Fully Diluted Adjusted Merger Consideration
(as defined by the Merger Agreement) for each share of Company Class A Common
Stock (as defined in the Merger Agreement).
20
Pursuant to the Merger Agreement, at the effective time of the Business
Combination (the "Effective Time"), each outstanding option to purchase shares
of Vicarious Surgical common stock (a "Vicarious Option") that is outstanding,
whether or not then vested or unvested, will be assumed by the Company and will
be converted into an option to acquire Domesticated Company Class A Stock of the
Company (a "Company Option") with the same terms and conditions as applied to
the Vicarious Option (as defined in the Merger Agreement) immediately prior to
the Effective Time; provided that the number of shares underlying such Company
Option will be determined by multiplying the number of shares of Company Capital
Stock (as defined in the Merger Agreement) that are issuable upon the exercise
of such Vicarious Option immediately prior to the Effective Time, by the Fully
Diluted Adjusted Merger Consideration (as defined in the Merger Agreement) for
such class, which product shall be rounded down to the nearest whole number of
shares, at a per share exercise price determined by dividing the per share
exercise price of such Vicarious Option immediately prior to the Effective Time
by the Fully Diluted Adjusted Merger Consideration (as defined in the Merger
Agreement) for such class, which quotient shall be rounded up to the nearest
whole cent.
Pursuant to the Merger Agreement, at the Effective Time, each warrant to
purchase shares of Company Capital Stock (as defined in the Merger Agreement)
that is issued and outstanding prior to the Effective Time and has not been
terminated pursuant to its terms will be assumed and converted into a warrant
exercisable for shares of Domesticated Company Class A Stock of the Company.
The parties to the Merger Agreement have made customary representations,
warranties and covenants in the Merger Agreement, including, among others,
covenants with respect to the conduct of Vicarious Surgical and the Company and
its subsidiaries prior to the Closing. The Closing is subject to certain
customary conditions.
Refer to the definitive proxy statement/prospectus filed with the Securities and
Exchange Commission on August 12, 2021 for additional information.
Related Party Transactions
Founder Shares
On May 14, 2020, our Sponsor paid $25,000, or approximately $0.003 per share, to
cover certain offering costs in consideration for 7,187,500 Class B ordinary
shares, par value $0.0001 (the "Founder Shares"). On June 25, 2020, our Sponsor
transferred 15,000 Founder Shares to Robert Kirby and 25,000 Founder Shares to
each of Michael Kives, Fred Langhammer and Terry Lundgren, resulting in the
Sponsor holding 7,097,500 Founder Shares. On July 14, 2020, we effected a share
capitalization of 1,437,500 Founder Shares resulting in 8,625,000 Class B
ordinary shares outstanding, of which the Sponsor now holds 8,535,000 Founder
Shares. All shares and the associated amounts have been retroactively restated
to reflect the share capitalization. Of the 8,625,000 Founder Shares
outstanding, up to 1,125,000 Founder Shares were subject to forfeiture to the
extent that the over-allotment option was not exercised in full by the
underwriters, so that the Founder Shares will represent 20.0% of our issued and
outstanding shares after the Initial Public Offering. The underwriters exercised
their over-allotment option in full on July 24, 2020. As a result, these shares
were no longer subject to forfeiture.
The initial shareholders agreed, subject to limited exceptions, not to transfer,
assign or sell any of their Founder Shares and any Class A ordinary shares
issuable upon conversion thereof until the earlier to occur of: (i) one year
after the completion of the initial Business Combination, or (ii) the date on
which we complete a liquidation, merger, share exchange or other similar
transaction after the initial Business Combination that results in all of our
shareholders having the right to exchange their Class A ordinary shares for
cash, securities or other property; except to certain permitted transferees and
under certain circumstances (the "lock-up"). Notwithstanding the foregoing, if
(1) the closing price of Class A ordinary shares equals or exceeds $12.00 per
share (as adjusted for share sub-divisions, share capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within
any 30-trading day period commencing at least 150 days after the initial
Business Combination or (2) if we consummate a transaction after the initial
Business Combination which results in our shareholders having the right to
exchange their shares for cash, securities or other property, the Founder Shares
will be released from the lock-up.
21
Private Placement Warrants
On July 17, 2020, simultaneously with the closing of the Initial Public
Offering, we consummated the Private Placement of 8,000,000 Private Placement
Warrants to our Sponsor, each exercisable to purchase one Class A ordinary share
at $11.50 per share, at a price of $1.00 per Private Placement Warrant,
generating gross proceeds of $8.0 million, and incurring offering costs of
approximately $16,000. On July 24, 2020, simultaneously with the sale of the
Over-Allotment Units, we consummated a private sale of an additional 900,000
Private Placement Warrants to our Sponsor, generating additional gross proceeds
of $900,000.
Each warrant is exercisable to purchase one Class A ordinary share at $11.50 per
share. A portion of the proceeds from the Private Placement Warrants were added
to the proceeds from the Initial Public Offering held in the Trust Accounts. If
we do not complete a Business Combination within the Combination Period, the
Private Placement Warrants will expire worthless.
Our Sponsor, officers and directors agreed, subject to limited exceptions, not
to transfer, assign or sell any of their Private Placement Warrants until 30
days after the completion of the initial Business Combination.
Sponsor Loan
On May 14, 2020, our Sponsor agreed to loan us up to $300,000 to cover expenses
related to the Initial Public Offering pursuant to a promissory note (the
"Note"). We borrowed approximately $127,000 under the Note and fully repaid this
Note on July 17, 2020.
Working Capital Loans
In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor or an affiliate of our Sponsor, or certain of our
officers and directors may, but are not obligated to, loan us funds as may be
required ("Working Capital Loans"). If we complete a Business Combination, we
would repay the Working Capital Loans. In the event that a Business Combination
does not close, we may use a portion of proceeds held outside the Trust Accounts
to repay the Working Capital Loans but no proceeds held in the Trust Accounts
would be used to repay the Working Capital Loans. Except for the foregoing, the
terms of such Working Capital Loans, if any, have not been determined and no
written agreements exist with respect to such loans. The Working Capital Loans
would either be repaid upon consummation of a Business Combination or, at the
lender's discretion, up to $1.5 million of such Working Capital Loans may be
convertible into private placement warrants at a price of $1.00 per warrant. As
of June 30, 2021 and December 31, 2020, we had no Working Capital Loans
outstanding.
Administrative Services Agreement
Commencing on the date of the final prospectus, we agreed to pay our Sponsor a
total of $10,000 per month for office space, utilities, secretarial and
administrative support services. Upon completion of the Initial Business
Combination or our liquidation, we will cease paying these monthly fees. For the
three and six months ended June 30, 2021, we incurred and paid approximately
$30,000 and $60,000 in such administrative fees, respectively.
Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement Warrants, and securities that
may be issued upon conversion of Working Capital Loans, if any, will be entitled
to registration rights pursuant to a registration rights agreement dated as of
July 14, 2020. These holders are entitled to certain demand and "piggyback"
registration rights. We will bear the expenses incurred in connection with the
filing of any such registration statements.
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Underwriting Agreement
We granted the underwriters a 45-day option from the final prospectus relating
to the Initial Public Offering to purchase up to 4,500,000 additional Units to
cover over-allotments, if any, at the Initial Public Offering price less the
underwriting discounts and commissions. The underwriters exercised their
over-allotment option in full on July 24, 2020.
The underwriters were paid a cash underwriting discount of $0.20 per unit, or
$6.9 million in the aggregate, paid upon the closing of the Initial Public
Offering. In addition, $0.35 per unit, or approximately $12.1 million in the
aggregate, was payable to the underwriters for deferred underwriting
commissions. Subsequently, the underwriter of the Company's Initial Public
Offering agreed to reduce its deferred underwriting fee to approximately $6.0.
D8 and Vicarious Surgical will use the $6 million reduction in underwriting fees
to fund additional capital advisory, legal and other fees associated with the
Business Combination. The deferred fee will become payable to the underwriters
from the amounts held in the Trust Accounts solely in the event that we complete
a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of our financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities in
our 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. We have identified the following as its critical
accounting policies:
Investments Held in the Trust Accounts
Our portfolio of investments held in the Trust Accounts are 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 our
investments held in the Trust Accounts are comprised of U.S. government
securities, the investments are classified as trading securities. When our
investments held in the Trust Accounts are comprised of money market funds, the
investments are recognized at fair value. Trading securities and investments in
money market funds are presented on the 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 are included in net gain from investments held in
Trust Accounts in the accompanying unaudited consolidated condensed statements
of operations. The estimated fair values of investments held in the Trust
Accounts are determined using available market information.
Class A Ordinary Shares Subject to Possible Redemption
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, at June 30, 2021 and December 31, 2020, 27,559,115 and 29,980,468
Class A ordinary shares subject to possible redemption are presented as
temporary equity, respectively, outside of the shareholders' equity section of
our balance sheets.
Net Income (Loss) per Ordinary Share
Our unaudited consolidated condensed statements of operations includes a
presentation of income (loss) per Class A ordinary share subject to redemption
in a manner similar to the two-class method of income (loss) per share. Net
income per Class A ordinary share, basic and diluted, is calculated by dividing
the investment income earned on the Trust Accounts by the weighted average
number of Class A ordinary shares outstanding for the periods. Net loss per
Class B ordinary share, basic and diluted, is calculated by dividing the net
loss, less income attributable to Class A ordinary shares, by the weighted
average number of Class B ordinary shares outstanding for the periods.
The calculation of diluted net income (loss) per ordinary share does not
consider the effect of the warrants issued in connection with the (i) Initial
Public Offering, (ii) exercise of over-allotment and (iii) Private Placement
since the exercise price of the warrants is in excess of the average ordinary
shares price for the period and therefore the inclusion of such warrants would
be anti-dilutive.
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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 shares purchase warrants, to determine if such instruments are
derivatives or contain features that qualify as embedded derivatives, pursuant
to ASC 480 and 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 reassessed at the end of each
reporting period.
We account for the warrants issued in connection with its Initial Public
Offering and Private Placement as derivative warrant liabilities in accordance
with ASC 815-40. Accordingly, we recognize the warrant instruments as
liabilities at fair value and adjusts the instruments to fair value at each
reporting period. The liabilities are subject to re-measurement at each balance
sheet date until exercised, and any change in fair value is recognized in the
our unaudited condensed statements of operations. The fair value of warrants
issued in connection with the Private Placement has been estimated using the
Black-Scholes Option Pricing Model at each balance sheet date. The fair value of
the warrants issued in connection with the Initial Public Offering was initially
measured using a Binomial Lattice simulation and subsequently been measured at
each measurement date based on the market price of such warrants when separately
listed and traded. 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. 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.
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"), which simplifies
accounting for convertible instruments by removing major separation models
required under current GAAP. The ASU also removes certain settlement conditions
that are required for equity-linked contracts to qualify for the derivative
scope exception, and it simplifies the diluted earnings per share calculation in
certain areas. We adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU
did not impact our financial position, results of operations or cash flows.
Our management does not believe that any recently issued, but not yet effective,
accounting standards updates, if currently adopted, would have a material effect
on the accompanying consolidated financial statements.
Off-Balance Sheet Arrangements
As of June 30, 2021, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
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 non-emerging growth companies. As a result, the financial statements may not
be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.
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 non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditor's report
providing additional information about the audit and the financial statements
(auditor discussion and analysis) and (iv) disclose certain executive
compensation related items such as the correlation between executive
compensation and performance and comparisons of the CEO's compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our Initial Public Offering or until we are no
longer an "emerging growth company," whichever is earlier.
24© Edgar Online, source Glimpses
D8 HLDG 