References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to FTAC Athena Acquisition Corp. References to our "management"
or our "management team" refer to our officers and directors, and references to
the "Sponsor" refer to FTAC Athena Sponsor, LLC and FTAC Athena Advisors, LLC.
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 Quarterly Report.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" that are not
historical facts, and involve risks and uncertainties that could cause actual
results to differ materially from those expected and projected. All statements,
other than statements of historical fact included in this Quarterly Report
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. 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 this Quarterly Report and the Company's final prospectus for
its Initial Public Offering filed with the U.S. Securities and Exchange
Commission (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.
We are a blank check company incorporated in the Cayman Islands on November 5,
2020 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.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities through June 30, 2021 were organizational activities, those
necessary to prepare for the Initial Public Offering, described below, and
identifying a target company for a Business Combination. 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 three months ended June 30, 2021, we had net loss of $1,236,766, which
consists of the change in fair value of warrant liabilities of $962,250 and
general and administrative expenses of 280,760, offset by interest earned on
marketable securities held in the Trust Account of $6,234.
For the six months ended June 30, 2021, we had net loss of $780,614, which
consists of transaction costs allocable to warrants of $592,728 and general and
administrative expenses of 388,899, offset by the change in fair value of
warrant liabilities of $192,450 and interest earned on marketable securities
held in the Trust Account of $8,563.
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 six months ended June 30, 2021, cash used in operating activities was
$830,360. Net loss of $780,614 was affected by interest earned on marketable
securities held in the Trust Account of $8,563, the change in fair value of
warrant liabilities of $192,450 and transaction costs allocable to warrants of
$592,728. Changes in operating assets and liabilities used $441,461 of cash for
As of June 30, 2021, we had marketable securities held in the Trust Account of
$250,008,563 (including approximately $8,563 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. 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 June 30, 2021, we had cash held outside the Trust Account of $885,397. 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.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, 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.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of June 30, 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.
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 22, 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
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 condensed 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:
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. 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 statement of operations. The Private Placement Warrants and
the Public Warrants for periods where no observable traded price was available
are valued using a binomial lattice model. 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 conversion 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 condensed balance
Net Income (Loss) Per Ordinary Share
We apply the two-class method in calculating earnings per share. Net income
(loss) per ordinary share, basic and diluted, for Class A redeemable ordinary
shares is calculated by dividing the interest income earned on the Trust Account
by the weighted average number of Class A redeemable ordinary shares outstanding
since original issuance. Net income (loss) per ordinary share, basic and diluted
for Class A and Class B non-redeemable ordinary shares is calculated by dividing
the net income (loss), less income attributable to Class A redeemable ordinary
shares, by the weighted average number of Class A and Class B non-redeemable
ordinary shares outstanding for the periods presented.
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, 2022 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 condensed financial statements.
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