Special Note Regarding Forward-Looking Statements
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto which are included in "Item 8. Financial Statements and
Supplementary Data" in this Annual Report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
All statements other than statements of historical fact included in this Annual
Report including, without limitation, statements under "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 Annual 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 SEC.
Overview
We are a blank check company incorporated in the Cayman Islands on November 5,
2020 and 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"). We intend to effectuate our
Business Combination using cash derived from the proceeds of the Initial Public
Offering and the sale of the Placement Units, our shares, debt or a combination
of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
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Recent Developments
As previously announced, on August 3, 2021, we entered into a Business
Combination Agreement (the "Business Combination Agreement") with Pico
Quantitative Trading Holdings LLC ("Pico").
On February 24, 2022, the Business Combination Agreement was terminated (the
"Termination").
As a result of the Termination, the Business Combination Agreement will be of no
further force and effect, and certain transaction agreements entered into in
connection with the Business Combination Agreement, including, but not limited
to, (i) the Sponsor Share Restriction Agreement, dated as of August 3, 2021, by
and among the Company, FTAC Athena Sponsor, LLC, and FTAC Athena Advisors, LLC,
(ii) the Support Agreement, dated as of August 3, 2021, by and among the
Company, FTAC Athena Sponsor, LLC, FTAC Athena Advisors, LLC, Pico and the
members of Pico party thereto, and (iii) the PIPE Subscription Agreements, each
dated August 3, 2021, between the Company and certain investors, will
automatically either be terminated in accordance with their terms or be of no
further force and effect. Neither party will be required to pay the other a
termination fee as a result of the Termination.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities through December 31, 2021 were organizational activities,
those necessary to prepare for the Initial Public Offering, described below,
identifying a target company for a Business Combination and consummating the
Business Combination with Pico more fully described above. We do not expect to
generate any operating revenues until after the completion of our Business
Combination, at the earliest. We generate non-operating income in the form of
interest income on marketable securities held in the trust account. We incur
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 year ended December 31, 2021, we had net income of $4,215, which
consists of general and administrative expenses of $1,861,924 and transaction
cost allocable to warrants of $592,728, offset by the change in fair value of
warrant liabilities of $2,437,700 and interest earned on investments held in the
Trust Account of $21,167.
For the period from November 5, 2020 (inception) through December 31, 2020, we
had a net loss of $6,139, which consists of formation and operational costs.
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Liquidity and Capital Resources
On February 25, 2021, we completed the Initial Public Offering of 25,000,000
Units, which includes the partial exercise by the underwriter of its
over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit,
generating gross proceeds of $250,000,000. Simultaneously with the closing of
the Initial Public Offering, we completed the sale of 660,000 Placement Units at
a price of $10.00 per Placement Unit in a private placement to the sponsor and
Cantor Fitzgerald, generating gross proceeds of $6,600,000.
For the year ended December 31, 2021, cash used in operating activities was
$1,444,712. Net income of $4,215 was affected by interest earned on investments
held in the Trust Account of $21,167, the change in fair value of warrant
liabilities of $2,437,700 and offering costs allocable to warrants of $592,728.
Changes in operating assets and liabilities provided $417,212 of cash for
operating activities.
For the period from November 5, 2020 (inception) through December 31, 2020, cash
used in operating activities was $0. Net loss of $6,139 was affected by changes
in operating assets and liabilities, which provided $6,139 of cash from
operating activities.
As of December 31, 2021, we had investments held in the trust account of
$250,021,167 (including approximately $21,167 of interest income) consisting of
money market funds which are invested primarily in U.S. Treasury securities. We
may withdraw interest from the trust account to pay taxes, if any. During the
year ended December 31, 2021, we did not withdraw any interest income from the
trust account. We intend to use substantially all of the funds held in the trust
account, including any amounts representing interest earned on the trust
account, to complete our Business Combination. To the extent that our share
capital or debt is used, in whole or in part, as consideration to complete our
Business Combination, the remaining proceeds held in the trust account will be
used as working capital to finance the operations of the target business or
businesses, make other acquisitions and pursue our growth strategies.
As of December 31, 2021, we had cash held outside the trust account of $271,045.
We intend to use the funds held outside the trust account primarily to identify
and evaluate target businesses, perform business due diligence on prospective
target businesses, travel to and from the offices, plants or similar locations
of prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses,
and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the sponsor, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may
use a portion of the working capital held outside the trust account to repay
such loaned amounts but no proceeds from our trust account would be used for
such repayment. Up to $1,500,000 of such loans may be convertible into units
upon consummation of the Business Combination at a price of $10.00 per unit, at
the option of the lender. The units would be identical to the Placement Units.
If our estimate of the costs of identifying a target business, undertaking
in-depth due diligence and negotiating a Business Combination are less than the
actual amount necessary to do so, we may have insufficient funds available to
operate our business prior to our Business Combination. Moreover, we may need to
obtain additional financing either to complete our Business Combination or
because we become obligated to redeem a significant number of our public shares
upon consummation of our Business Combination, in which case we may issue
additional securities or incur debt in connection with such Business
Combination. If we are unable to raise such additional capital, we may be
required to take additional measures to conserve liquidity, which could include,
but not necessarily be limited to, curtailing operations, suspending the pursuit
of a potential transaction, and reducing overhead expenses.
Going Concern
We have until February 25, 2023 to consummate a Business Combination. It is
uncertain that we will be able to consummate a Business Combination by this
time. If a Business Combination is not consummated by this date, there will be a
mandatory liquidation and subsequent dissolution. Management has determined that
the mandatory liquidation, should a Business Combination not occur, and
potential subsequent dissolution raises substantial doubt about our ability to
continue as a going concern. Management intends to complete a Business
Combination prior to February 25, 2023. No adjustments have been made to the
carrying amounts of assets or liabilities should we be required to liquidate
after February 25, 2023.
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Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2021. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay an
affiliate of the sponsor a total of $25,000 per month for office space,
administrative and shared personnel support services. We began incurring these
fees on February 23, 2021 and will continue to incur these fees monthly until
the earlier of the completion of the Business Combination and our liquidation.
On June 7, 2021, the administrative services agreement was amended and restated
to increase the monthly charge for office space, administrative and shared
personnel support services payable to an affiliate of the sponsor from $25,000
to $32,500.
The underwriter is entitled to a deferred fee of (i) $0.40 per Unit of the gross
proceeds of the initial 22,000,000 Units sold in the Initial Public Offering, or
$8,800,000 and (ii) $0.60 per Unit of the gross proceeds from the 3,000,000
Units sold pursuant to the over-allotment option, or $1,800,000. The deferred
fee will become payable to the underwriter 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.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
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 share purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to ASC 480
and ASC 815. We account for the Warrants in accordance with the guidance
contained in ASC 815-40 under which the Warrants do not meet the criteria for
equity treatment and must be recorded as liabilities. Accordingly, we classify
the Warrants as liabilities at their fair value and adjust the Warrants to fair
value at each reporting period. This liability is subject to re-measurement at
each balance sheet date until exercised, and any change in fair value is
recognized in our statements of operations. The Placement Warrants and the
Public Warrants for periods where no observable traded price was available are
valued using Black Scholes Option Pricing Model and a binomial lattice model,
respectively. For periods subsequent to the detachment of the Public Warrants
from the Units, the Public Warrant quoted market price was used as the fair
value as of each relevant date.
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance
with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity."
Class A ordinary shares subject to mandatory redemption are classified as a
liability instrument and 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 occurrence of uncertain future events. Accordingly, Class A ordinary shares
subject to possible redemption are presented at redemption value as temporary
equity, outside of the shareholders' equity section of our balance sheets. Under
ASC 480-10-S99, the Company has elected to recognize changes in the redemption
value immediately as they occur and adjust the carrying value of the security to
equal the redemption value at the end of each reporting period. This method
would view the end of the reporting period as if it were also the redemption
date for the security.
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Net Income (Loss) Per Ordinary Share
Net income (loss) per ordinary share is computed by dividing net income (loss)
by the weighted average number of ordinary shares outstanding during the period.
Accretion associated with the redeemable shares of Class A ordinary shares is
excluded from earnings per share as the redemption value approximates fair
value.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 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) ("ASU 2020-06"), to simplify accounting
for certain financial instruments. ASU 2020-06 eliminates the current models
that require separation of beneficial conversion and cash conversion features
from convertible instruments and simplifies the derivative scope exception
guidance pertaining to equity classification of contracts in an entity's own
equity. The new standard also introduces additional disclosures for convertible
debt and freestanding instruments that are indexed to and settled in an entity's
own equity. ASU 2020-06 amends the diluted earnings per share guidance,
including the requirement to use the if-converted method for all convertible
instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a
full or modified retrospective basis, with early adoption permitted beginning on
January 1, 2021. We adopted ASU 2020-06 effective January 1, 2021. The adoption
of ASU 2020-06 did not have an impact on our financial statements.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
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