References to the "Company," "our," "us" or "we" refer to
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 (the "Securities Act"), 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 partnering transactions 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 otherSecurities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated in
Our registration statements for our initial public offering (the "Initial Public Offering") became effective onSeptember 15, 2020 . OnSeptember 18, 2020 , we consummated the Initial Public Offering of 16,560,000 (41,400,000 after giving effect to the Stock Split) CAPS ™ (with respect to the Class A common stock included in the CAPS ™ being offered, the "Public Shares"), which included 2,160,000 CAPS ™ (5,400,000 CAPS ™ after giving effect to the Stock Split) issued as a result of the underwriters' exercise in full of their over-allotment option, at$25.00 per CAPS ™ ($10.00 per CAPS ™ after giving effect to the Stock Split), generating gross proceeds of$414.0 million , and incurring offering costs of approximately$4.8 million . Concurrently with the closing of the Initial Public Offering, we completed the private sale of 245,600 (614,000 after giving effect to the Stock Split) private placement CAPS ™ ("Private Placement CAPS ™ "), at a price of$25.00 per Private Placement CAPS ™ ($10.00 per Private Placement CAPS ™ after giving effect to the Stock Split) to the Sponsor, generating gross proceeds to the Company of approximately$6.1 million . Upon the closing of the Initial Public Offering and the sale of Private Placement CAPS ™ ,$414.0 million ($10.00 per CAPS ™ after giving effect to the Stock Split) of the net proceeds of the sale of the CAPS ™ in the Initial Public Offering and the Private Placement were placed in a trust account ("Trust Account") located inthe United States withContinental Stock Transfer & Trust Company acting as trustee, and held as cash or invested only inU.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 in money market funds meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act, which invest only in directU.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a Partnering Transaction and (ii) the distribution of the Trust Account as described below. 19
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We have 24 months from the closing of the Initial Public Offering, orSeptember 18, 2022 (or 27 months, orDecember 18, 2022 , if we have executed a letter of intent, agreement in principle or definitive agreement for the Partnering Transaction within 24 months) to complete its initial Partnering Transaction (the "Partnering Period"). If we do not complete a Partnering Transaction within this period of time (and stockholders do not approve an amendment to the certificate of incorporation to extend this date), we will (i) cease all operations except for the purpose of winding up, 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, of$25.00 , and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations underDelaware 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
For the three months ended
For the three months ended
Liquidity and Capital Resources
As of
Our liquidity needs up to the closing of the Initial Public Offering and the sale of Private Placement CAPS ™
had been satisfied through a capital contribution of
In connection with our assessment of going concern considerations in accordance
with Financial Accounting Standard Board's Accounting Standards Update
("ASU") 2014-15, "Disclosures
of Uncertainties about an Entity's Ability to Continue as a Going Concern," we
have until
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consummated by this date, there will be a mandatory liquidation and subsequent
dissolution of the Company. Management has determined that the liquidity
condition and mandatory liquidation, should a Partnering Transaction not occur,
and potential subsequent dissolution raises substantial doubt about our ability
to continue as a going concern. Management intends to complete the Business
Combination prior to the liquidation date. No adjustments have been made to the
carrying amounts of assets or liabilities should we be required to liquidate
after
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 condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities,
other than an agreement to pay Administrative Services Agreement fees to our
Sponsor that total
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
Class A Common Stock Subject to Possible Redemption
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. As part of the Private Placement CAPS ™ , we issued 614,000 shares of Class A common stock to the Sponsor ("Private Placement Shares"). These Private Placement Shares will not be transferable, assignable or salable until 30 days after the completion of our initial Partnering Transaction, as such are considered non-redeemable and presented as permanent equity in our condensed balance sheet. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as ofMarch 31, 2022 andDecember 31, 2021 , 41,400,000 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders' equity (deficit) section of the Company's unaudited condensed balance sheets. 21
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Net Income per Share of Common Stock
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have three classes of shares, which are referred to as Class A common stock, Class B common stock and Class F common stock. Income and losses are shared pro rata between the three classes of shares. Net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted average number of common stock outstanding for the respective period.
The calculation of diluted net income per share of common stock does not
consider the effect of the warrants underlying the Units sold in the Initial
Public Offering and the Private Placement Warrants to purchase 10,503,500 shares
of Class A common stock in the calculation of diluted income per share, because
their inclusion would be anti-dilutive under the treasury stock method. As a
result, diluted net income per share of common stock is the same as basic net
income per share of common stock for the three months ended
Derivative Warrant Liabilities
We do not use derivative instruments to hedge its exposures to cash flow, market or foreign currency risks. Management evaluates all of our financial instruments, including issued warrants to purchase its Class A common stock, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. 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. We issued 10,350,000 warrants to purchase Class A common stock to investors in our Initial Public Offering, including the over-allotment, and simultaneously issued 153,500 Private Placement Warrants. All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize 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, and any change in fair value is recognized in our statement of operations. The fair value of the warrants issued in connection with the Initial Public Offering was initially measured using a Monte-Carlo simulation model and subsequently been measured based on the listed market price of such warrants at each measurement date when separately listed and traded. The fair value of the warrants issued in connection with the Private Placement have been estimated using a Black-Scholes Option Pricing model at each measurement date. 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
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 unaudited condensed financial statements.
Off-Balance
Sheet Arrangements
As ofMarch 31, 2022 , 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. 22
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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.
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