References to the "Company," "FAST Acquisition Corp.," "our," "us" or "we" refer
to FAST Acquisition Corp. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the 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.
37
In this Amendment No. 2 ("Amendment No. 2") to the Annual Report on Form 10-K of
FAST Acquisition Corp. (the "Company") for the period ended December 31, 2020,
we are restating (i) our audited balance sheet as of August 25, 2020, as
previously revised in the 2020 Form 10-K/A No. 1, (ii) audited financial
statements as previously revised in the 2020 Form 10-K/A No. 1, (iii) and the
unaudited interim financial statements as of September 30, 2020, and for the
three months ended September 30, 2020, and the period from June 4, 2020
(inception) through September 30, 2020 as previously revised in the 2020 Form
10-K/A No. 1.
We have re-evaluated our application of ASC 480-10-S99-3A to our accounting and
classification of the Public Shares, issued as part of the units sold in the IPO
on August 25, 2020. Historically, a portion of the Public Shares was classified
as permanent equity to maintain stockholders' equity greater than $5 million on
the basis that we will not redeem our Public Shares in an amount that would
cause our net tangible assets to be less than $5,000,001, as described in the
Charter. Pursuant to such re-evaluation, our management has determined that the
Public Shares include certain provisions that require classification of all of
the Public Shares as temporary equity regardless of the net tangible assets
redemption limitation contained in the Articles. In addition, in connection with
the change in presentation for the Public Shares, management determined it
should restate 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 our Company.
Therefore, on November 12, 2021, our management and the Audit Committee
concluded that our previously issued (i) audited balance sheet as of August 25,
2020, as previously revised in the 2020 Form 10-K/A No. 1, (ii) audited
financial statements as previously revised in the 2020 Form 10-K/A No. 1, (iii)
unaudited interim financial statements as previously revised in the 2020 Form
10-K/A No. 1; (iv) unaudited interim financial statements included in our
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021,
filed with the SEC on May 24, 2021 and (v) unaudited interim financial
statements included in our Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2021, filed with the SEC on August 11, 2021, should be
restated to report all Public Shares as temporary equity and should no longer be
relied upon. As such, the Company is restating the 2020 periods herein and
intends to restate its 2021 interim financial statements for the Affected
Periods in its quarterly report on Form 10-Q for the period ended September 30,
2021.
The restatement does not have an impact on our cash position and cash held in
the Trust Account.
Our management has concluded that in light of the classification error described
above, a material weakness exists in our internal control over financial
reporting and that our disclosure controls and procedures were not effective.
In connection with the restatement, our management reassessed the effectiveness
of our disclosure controls and procedures for the periods affected by the
restatement. As a result of that reassessment, we determined that our disclosure
controls and procedures for such periods were not effective with respect to our
internal controls around the proper accounting and classification of complex
financial instruments. For more information, see Item 9A included in this Annual
Report on Form 10-K.
We have not amended our previously filed Quarterly Report on Form 10-Q for the
period affected by the restatement or our previously filed balance sheet, dated
August 25, 2020, on Form 8-K. The financial information that has been previously
filed or otherwise reported for these periods is superseded by the information
in this Amendment No. 2, and the financial statements and related financial
information contained in such previously filed reports should no longer be
relied upon.
The restatement is more fully described in Note 2 of the notes to the financial
statements included herein.
38
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of 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. For information identifying important factors that could cause
actual results to differ materially from those anticipated in the
forward-looking statements, please refer to the Risk Factors section of the
Company's final prospectus for its Initial Public Offering filed with the SEC.
The Company's securities filings can be accessed on the EDGAR section of the
SEC's website at www.sec.gov. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new information,
future events or otherwise.
Overview
We are a blank check company incorporated in Delaware on June 4, 2020 for the
purpose of effecting a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or similar business combination with one or more
businesses. 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 FAST Sponsor, LLC, a Delaware limited liability company. The
registration statement for our Initial Public Offering was declared effective on
August 20, 2020. On August 25, 2020, we consummated our Initial Public Offering
of 20,000,000 Units, at $10.00 per Unit, generating gross proceeds
of $200.0 million, and incurring offering costs of approximately $11.5 million,
inclusive of $7.0 million in deferred underwriting commissions. The
underwriters were granted a 45-day option from the date of the final prospectus
relating to the Initial Public Offering to purchase up to 3,000,000 additional
Units to cover over-allotments, if any, at $10.00 per Unit. The over-allotment
expired unexercised on October 5, 2020.
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 6,000,000 Private Placement Warrants to our Sponsor,
each exercisable to purchase one share of Class A common stock at $11.50 per
share, at a price of $1.00 per Private Placement Warrant, generating gross
proceeds to us of $6.0 million. If the over-allotment option was exercised, our
Sponsor could have purchased an additional amount of up to 600,000 Private
Placement Warrants at a price of $1.00 per Private Placement Warrant. The
over-allotment expired unexercised on October 5, 2020.
Upon the closing of the Initial Public Offering and the Private
Placement, $200.0 million ($10.00 per Unit) of the net proceeds of the sale of
the Units in the Initial Public Offering and the Private Placement was placed in
the Trust Account located in the United States at JP Morgan Chase Bank, N.A.
with Continental Stock Transfer & Trust Company acting as trustee, and has been
invested only in U.S. "government securities," within the meaning of Section
2(a)(16) of 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, as determined by the Company, until the earlier of: (i)
the completion of a Business Combination and (ii) the distribution of the Trust
Account as described below.
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 Warrants, 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 August 25, 2022, 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 Account, including interest earned on the
funds held in the Trust Account (net of permitted withdrawals 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
Stockholders' rights as stockholders (including the right to receive further
liquidating distributions, if any), and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining stockholders
and the board of directors, liquidate and dissolve, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law.
39
Proposed Business Combination
On February 1, 2021, the Company entered into an agreement and plan of merger
(as amended, the "Merger Agreement") with Fertitta Entertainment, Inc., a Texas
corporation ("FEI"), FAST Merger Corp., a Texas corporation and direct
subsidiary of the Company ("FAST Merger Corp.") and FAST Merger Sub Inc., a
Texas corporation and direct subsidiary of FAST Merger Corp. ("Merger Sub"),
pursuant to which (i) the Company will change its jurisdiction of incorporation
to Texas by merging with and into FAST Merger Corp., with FAST Merger Corp.
surviving the merger (the "reincorporation"), and (ii) Merger Sub will merge
with and into FEI with FEI surviving the merger (the "Merger"). Upon
consummation of the transactions contemplated by the Merger Agreement (the
"Business Combination"), FEI will become a wholly owned subsidiary of FAST
Merger Corp., which is referred to herein as "New FEI." On June 30, 2021, the
Company, FEI, FAST Merger Corp. and Merger Sub entered into an Amendment No. 1
to the Merger Agreement ("Amendment No. 1"), pursuant to which the Merger
Agreement was amended to, among other things, (i) increase the number of shares
of Class A common stock of New FEI to be issued to the sole stockholder of FEI
such that the value of the aggregate consideration to be received by the sole
stockholder increased from approximately $1.97 billion to approximately $3.84
billion in consideration for the inclusion of certain high quality assets to New
FEI including Mastro's, Catch and Vic & Anthony's restaurants, Cadillac Bar and
Fish Tales casual concepts and certain specialty entertainment assets, including
Fisherman's Wharf and Pleasure Pier in Galveston and three aquariums, (ii)
provide that the shares of Class B units of Golden Nugget Online Gaming, Inc.
("GNOG") issued in connection with the $2.2 million contribution made by LF LLC
(a subsidiary of FEI) on March 31, 2021 and any additional shares acquired by LF
LLC prior to the closing of the Business Combination (the "Closing") as a result
of contractually required contributions will be included as part of the
transaction and (iii) extend the "Termination Date" under the Merger Agreement
from November 1, 2021 to December 1, 2021.
Upon the Closing, each share of common stock of the Company will be converted
into one share of Class A common stock of New FEI and all of the outstanding
equity interests of FEI will be acquired for aggregate consideration that is
currently valued at approximately $3.84 billion. Such consideration will be paid
to Tilman J. Fertitta, the sole stockholder of FEI, by the issuance of a number
of shares of Class B common stock of New FEI, calculated based on the aggregate
closing date transaction value, as determined pursuant to the Merger Agreement,
and a $10 per share price of the Class B common stock. The value of the
aggregate consideration will change between now and the Closing based on (i) the
difference between the net debt of FEI at the Closing and the current target net
debt of $4.6 billion and (ii) (x) the difference between the 60-day average
closing stock price of a share of GNOG as of the day prior to the Closing and
$18.46, the closing stock price of GNOG on January 28, 2021, multiplied by (y)
31,350,625 (subject to adjustment by reason of any stock dividend, subdivision,
reclassification, reorganization, recapitalization, split, combination or
exchange of shares, or any other similar event between the date of the Merger
Agreement and the Closing). In addition, in connection with the Business
Combination, FEI will complete an internal reorganization and spin out certain
assets which are not intended to be part of the Business Combination (the
"Restructuring").
The shares of Class B common stock of New FEI will have the same economic terms
as the shares of Class A common stock of New FEI, but the shares of Class B
common stock of New FEI will have 10 votes per share. The outstanding shares of
Class B common stock of New FEI will be subject to a "sunset" provision if Mr.
Fertitta and other permitted holders of New FEI Class B common stock
collectively cease to beneficially own at least 20% of the number of shares of
Class B common stock of New FEI collectively held by Mr. Fertitta and other
permitted transferees as of the effective date of the Business Combination.
On August 9, 2021, DraftKings Inc. ("DraftKings") and GNOG announced that they
have entered into a definitive agreement pursuant to which DraftKings will
acquire GNOG in an all-stock transaction (the "DraftKings Transaction"). The
Company currently expects that the Business Combination will close in the fourth
quarter of 2021, prior to the expected closing of the DraftKings Transaction.
The Merger Agreement does not prohibit FEI from selling the stock of GNOG and
the Company's consent was not required for the DraftKings Transaction. The
Merger Agreement provides that the Merger Consideration (as defined therein)
payable to FEI's sole stockholder will be adjusted by (a)(i) an amount equal to
the difference between the 60-day average closing stock price of a share of GNOG
as of the day prior to the closing of the Business Combination, multiplied by
(ii) the number of shares of stock of GNOG owned by FEI as of the Closing, and
(b)(i) $13.00, multiplied by (ii) 31,494,175. The Merger Consideration payable
to the sole stockholder of FEI will increase or decrease to the extent GNOG's
stock price increases or decreases as a result of the announcement of the
DraftKings Transaction in relation to the $13.00 reference price in the Merger
Agreement.
A subsidiary of FEI, as a holder of GNOG common stock, will receive the merger
consideration in the DraftKings Transaction. In the DraftKings Transaction, GNOG
stockholders, including such subsidiary of FEI, will receive a fixed ratio of
0.365 shares of Class A common stock of a new holding company formed by
DraftKings in connection with the Transaction ("New DraftKings"), for each share
of common stock of GNOG. The Company is not a party to the DraftKings
Transaction.
For additional information regarding the agreement, see the Company's Form 8-K
filed by us on February 1, 2021, and July 1, 2021, and FAST Merger Corp.'s
registration statement on Form S-4 (as amended), initially filed with the SEC on
August 2, 2021, for more information.
40
Liquidity and Going Concern
As of December 31, 2020, we had approximately $1.0 million in our operating bank
account, and working capital of approximately $1.1 million. Prior to the
completion of the Initial Public Offering, our liquidity needs were satisfied
through a payment of $25,000 from our Sponsor in exchange for the issuance of
Founder Shares, the loan under the Note, as well as advancement of funds from
our Sponsor of approximately $354,000 to us to cover for offering costs in
connection with the Initial Public Offering. Subsequent to the consummation of
the Initial Public Offering on August 25, 2020, our liquidity needs had been
satisfied with the net proceeds from the consummation of the Private Placement
not held in the Trust Account. We fully repaid the Note and advanced funds on
August 25, 2020. In addition, in order to finance transaction costs in
connection with a Business Combination, our officers, directors and initial
stockholders may, but are not obligated to, provide us Working Capital Loans. To
date, there were no amounts outstanding under any Working Capital Loans.
We have incurred and expect to incur additional significant costs in pursuit of
our financing and acquisition plans including the proposed business combination
described below. These conditions raise substantial doubt about our ability to
continue as a going concern within one year after the date that the accompanying
condensed consolidated financial statements are issued. Also, in connection with
our assessment of going concern considerations in accordance with FASB ASC
205-40, "Basis of Presentation - Going Concern," management has determined that
mandatory liquidation and subsequent dissolution raise substantial doubt about
our ability to continue as a going concern. No adjustments have been made to the
carrying amounts of assets or liabilities should we be required to liquidate
after August 25, 2022. The financial statements do not include any adjustment
that might be necessary if we are unable to continue as a going concern.
Management is continuing to evaluate the impact of the COVID-19 pandemic on the
industry and has concluded that while it is reasonably possible that the virus
could have an effect on our financial position, results of our operations and/or
close of the Merger Agreement, the specific impact is not readily determinable
as of the date of these financial statements. The financial statement does not
include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity from inception up to December 31, 2020, was in preparation
for our formation, the Initial Public Offering, and since the closing of our
Initial Public Offering, a search for business combination candidates. We will
not generate any operating revenues until the closing and completion of our
initial Business Combination, at the earliest.
For the period from June 4, 2020 (inception) through December 31, 2020, we had a
net loss of approximately $16.1 million, which consisted of approximately $15.3
million loss from changes in fair value of derivative warrant liabilities,
approximately $0.5 million financing costs and general and administrative
expenses of approximately $214,000, related party administrative fees of
$60,000, and franchise tax expense of approximately $114,000, partially offset
by income from our investments held in the Trust Account of approximately
$68,000.
As a result of the restatement described in Note 2 of the notes to the financial
statements included herein, we classify the warrants issued in connection with
our Initial Public Offering and Private Placement as liabilities at their fair
value and adjust the warrant instruments to fair value at each reporting period.
These 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. For the periods from June 4, 2020 (inception) through December 31,
2020, the change in fair value of warrants was a decrease of approximately $15.3
million. We also recognized a charge of $0.5 million for the amount of offering
costs ascribe to the derivative warrant liabilities that was offset by an
increase in additional paid-in capital.
Related Party Transactions
Founder Shares
On June 19, 2020, we issued 7,187,500 Founder Shares to our Sponsor for a
payment of $25,000. On August 4, 2020, we effected a share capitalization
resulting in an aggregate of 5,750,000 Class B common stock outstanding. All
shares and associated amounts have been retroactively restated to reflect the
share capitalization. The initial stockholders agreed to forfeit up to 750,000
Founder Shares to the extent that the over-allotment option was not exercised in
full by the underwriters. The forfeiture would be adjusted to the extent that
the over-allotment option is not exercised in full by the underwriters so that
the Founder Shares would represent 20.0% of our issued and outstanding shares
after the Initial Public Offering. The over-allotment expired unexercised on
October 5, 2020 resulting in the forfeiture of such shares.
41
The initial stockholders agreed, subject to limited exceptions, not to transfer,
assign or sell any of the Founder Shares until the earlier to occur of: (i) one
year after the completion of the initial Business Combination and (ii) the date
following the completion of the initial Business Combination on which we
complete a liquidation, merger, capital stock exchange or other similar
transaction that results in all of our stockholders having the right to exchange
their common stock for cash, securities or other property. Notwithstanding the
foregoing, if (1) the last reported sales price of the Class A common stock
equals or exceeds $12.00 per share (as adjusted for stock splits, stock
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 the our stockholders having the
right to exchange their shares for cash, securities or other property, the
Founder Shares will be released from the lock-up.
Related Party Loans
On June 4, 2020, the Sponsor agreed to loan us an aggregate of up to $300,000 to
cover expenses related to the Initial Public Offering pursuant to a promissory
note (the "Note"). This loan was non-interest bearing and payable upon the
completion of the Initial Public Offering. Through August 25, 2020, we borrowed
the full $300,000 under the Note and received additional advances of
approximately $54,000 from the Sponsor to cover certain offering expenses. We
fully repaid the Note and the advances to the Sponsor on August 25, 2020.
In addition, in order to fund working capital deficiencies or finance
transaction costs in connection with a Business Combination, the Sponsor or an
affiliate of the Sponsor, or certain of our officers and directors may, but are
not obligated to, loan us Working Capital Loans. If we complete a Business
Combination, we may repay the Working Capital Loans out of the proceeds of the
Trust Account released to us. Otherwise, the Working Capital Loans would be
repaid only out of funds held outside the Trust Account. In the event that a
Business Combination does not close, we may use a portion of proceeds held
outside the Trust Account to repay the Working Capital Loans but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. The
Working Capital Loans would either be repaid upon consummation of a Business
Combination or, at the lenders' discretion, up to $1.5 million of such Working
Capital Loans may be convertible into warrants of the post Business Combination
entity at a price of $1.00 per warrant. The warrants would be identical to the
Private Placement Warrants. 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. To date, we had no borrowings under the Working
Capital Loans.
Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans, if any (and any shares of
Class A common stock issuable upon the exercise of the Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital
Loans and upon conversion of the Founder Shares), are entitled to registration
rights pursuant to a registration rights agreement. These holders will be
entitled to certain demand and "piggyback" registration rights. We will bear the
expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per unit, or
$4.0 million in the aggregate, paid upon the closing of the Initial Public
Offering. In addition, $0.35 per unit, or $7.0 million in the aggregate will be
payable to the underwriters for deferred underwriting commissions. The deferred
fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event that we complete a Business Combination, subject to
the terms of the underwriting agreement.
Administrative Services Agreement
Commencing on August 21, 2020, and continuing until the earlier of the
consummation of a Business Combination or our liquidation, we agreed to pay the
Sponsor a total of $15,000 per month for office space, utilities, and
secretarial and administrative support services provided to members of our
management team. For the period from June 4, 2020 (inception) through December
31, 2020, we incurred and paid $60,000 related to these services.
42
The Sponsor, officers and directors, or any of their respective affiliates will
be reimbursed for any out-of-pocket expenses incurred in connection with
activities performed on our behalf such as identifying potential target
businesses and performing due diligence on suitable Business Combinations.
Critical Accounting Policies
Investments Held in the Trust Account
Our portfolio of investments held in the Trust Account 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, or a combination
thereof. The investments held in the Trust Account are classified as trading
securities. Trading securities are presented on the balance sheet 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 Account on the statement of operations. The estimated fair values of
investments held in the Trust Account are determined using available market
information.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from
Equity." Shares of Class A common stock subject to mandatory redemption (if any)
are classified as liability instruments and are measured at fair value. Shares
of conditionally redeemable Class A common stock (including Class A 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 our control) are classified as temporary equity. At all other times,
shares of Class A common stock are classified as stockholders' equity. 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, at December 31, 2020, 20,000,000 shares of Class A common
stock subject to possible redemption are presented as temporary equity, outside
of the stockholders' equity section of the balance sheet.
Effective with the closing of the Initial Public Offering, the Company
recognized the accretion from initial book value to redemption amount, which,
resulted in charges against additional paid-in capital (to the extent available)
and accumulated deficit.
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 stock purchase warrants, 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 10,000,000 common stock warrants to investors in our Initial Public
Offering and issued 6,000,000 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 warrants issued in connection with the Initial
Public Offering and Private Placement were initially measured at fair value
using a Monte Carlo simulation model and subsequently, the fair value of the
Private Placement warrants have been estimated using a Monte Carlo simulation
model each measurement date. The fair value of Warrants issued in connection
with our Initial Public Offering have subsequently been measured based on the
listed market price of such warrants.
Net Income (Loss) Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." We have 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.
We did not consider the effect of the warrants issued in connection with the
Initial Public Offering and the Private Placement to purchase an aggregate of
16,000,000 shares of common stock in the calculation of diluted income (loss)
per share because their exercise is contingent upon future events and since
their inclusion would be anti-dilutive under the treasury stock method. As a
result, diluted net loss per share is the same as basic net loss per share for
the period from June 4, 2020 through December 31, 2020. Accretion associated
with the redeemable Class A common stock is excluded from earnings per share as
the redemption value approximates fair value.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
43
JOBS Act
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 Public Company
Accounting Oversight Board 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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