The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our unaudited financial
statements and the notes related thereto which are included in "Item 1.
Financial Statements" of this Quarterly Report on Form 10Q.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this
Quarterly Report on Form 10Q including, without limitation, statements under
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. When used in this Quarterly Report on Form 10Q,
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. All subsequent written or oral
forward-looking statements attributable to us or persons acting on the Company's
behalf are qualified in their entirety by this paragraph.
Overview
We are a blank check company incorporated on December 21, 2020 as a Delaware
corporation and formed for the purpose of effecting a Business Combination with
one or more target businesses. We completed our Public Offering on March 25,
2021. As of June 30, 2021, we had not identified any Business Combination target
nor initiated any substantive discussions directly or indirectly, with respect
to identifying any Business Combination target.
Since completing our Public Offering, we have reviewed, and continue to review,
a number of opportunities to enter into a Business Combination with an operating
business, but we are not able to determine at this time whether we will complete
a Business Combination with any of the target businesses that we have reviewed
or with any other target business. We intend to effectuate our Business
Combination using cash from the proceeds of our Public Offering and the sale of
the Private Placement Warrants, our capital stock, debt, or a combination of
cash, stock and debt.
Results of Operations
For the six months ended June 30, 2021, we had net loss of $12,565,814 of which
$11,000,000 is a non-cash expense related to the change in fair value of the
warrant liability. Our business activities during the quarter mainly consisted
of identifying and evaluating prospective acquisition candidates for a Business
Combination. We believe that we have sufficient funds available to complete our
efforts to effect a Business Combination with an operating business by March 25,
2023. However, if our estimates 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.
As indicated in the accompanying unaudited financial statements, at June 30,
2021, we had $1,056,834 in cash and deferred offering costs of $28,000,000.
Further, we expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete our Business
Combination will be successful.
Liquidity and Capital Resources
On February 10, 2021, the Sponsor purchased 21,562,500 Founder Shares for
$25,000, or approximately $0.001 per share. On March 22, 2021, the Sponsor
transferred 25,000 Founder Shares to each of the Company's three independent
director nominees at their original purchase price. At the time of the IPO, the
underwriters were granted an option to purchase up to an additional 11,250,000
Units to cover overallotments, if any. On May 9, 2021, the Sponsor forfeited
1,562,500 Founder Shares following the expiration of the unexercised portion of
underwriters'
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over-allotment option, so that the Founder Shares held by the Initial
Stockholders would represent 20.0% of the outstanding shares of common stock
following completion of the Public Offering. The Founder Shares will
automatically convert into shares of Class A Common Stock at the time of the
Business Combination on a one-for-one basis, subject to adjustment as described
in the Company's certificate of incorporation.
On March 25, 2021, we consummated our Public Offering of 75,000,000 Units at a
price of $10.00 per Unit, generating gross proceeds of $750,000,000. On the IPO
Closing Date, we completed the private sale of an aggregate of 8,500,000 Private
Placement Warrants, each exercisable to purchase one share of Common Stock at
$11.50 per share, to our Sponsor, at a price of $2.00 per Private Placement
Warrant, generating gross proceeds, before expenses, of $17,000,000. After
deducting the underwriting discounts and commissions (excluding the Deferred
Discount, which amount will be payable upon consummation of the Business
Combination, if consummated), the total net proceeds from our Public Offering
and the sale of the Private Placement Warrants were $752,000,000, of which
$750,000,000 (or $10.00 per share sold in the Public Offering) was placed in the
Trust Account. The amount of proceeds not deposited in the Trust Account was
$2,000,000 at the closing of our Public Offering. On April 22, 2021, the
underwriters partially exercised their over-allotment option to purchase
5,000,000 newly issued units, and the closing of the sale of the additional
Units pursuant to such exercise occurred on April 22, 2021. The issuance by the
Company of 5,000,000 Over-Allotment Option Units at a price of $10.00 per unit
resulted in gross proceeds of $50,000,000 placed in the Trust Account. On April
22, 2021, substantially concurrently with the sale of the Over-allotment Option
Units, the Company completed a private placement with the Sponsor for an
additional 500,000 warrants at a price of $2.00 per warrant, generating gross
proceeds of $1,000,000 used to pay the additional deferred underwriting
discount. The remainder of the over-allotment option expired on May 9, 2021.
Interest earned on the funds held in the Trust Account may be released to us to
fund our Regulatory Withdrawals, subject to an annual limit of $900,000, for a
maximum of 24 months and/or additional amounts necessary to pay our franchise
and income taxes.
Prior to the completion of the Public Offering, the Sponsor loaned the Company
an aggregate of $300,000 by the issuance of an unsecured promissory note (the
"Note") issued by the Company in favor of the Sponsor to cover organization
expenses and expenses related to the Public Offering. The Note was non-interest
bearing and payable on the earlier of February 28, 2022 or the completion of the
Public Offering. The Note was repaid upon completion of the Public Offering.
On April 20, 2021, the Sponsor made available to the Company a loan of up to
$4,000,000 pursuant to a promissory note issued by the Company to the Sponsor.
The proceeds from the note will be used for on-going operational expenses and
certain other expenses in connection with the Business Combination. The note is
unsecured, non-interest bearing and matures on the earlier of: (i) January 31,
2022 or (ii) the date on which the Company consummates the Business Combination.
As of June 30, 2021, the net amount advanced by Sponsor to the Company was
$2,000,000.
As of June 30, 2021 and December 31, 2020, we had cash held outside of the Trust
Account of approximately $1,056,834 and $0, respectively, which is available to
fund our working capital requirements. Additionally, interest earned on the
funds held in the Trust Account may be released to us to fund our Regulatory
Withdrawals, subject to an annual limit of $900,000, for a maximum of 24 months
and/or additional amounts necessary to pay our franchise and income taxes.
At June 30, 2021 and December 31, 2020, the Company had current liabilities of
$36,941,409 and $1,782 and working capital of ($33,747,188) and ($1,782),
respectively, the balances of which are primarily related to warrants we have
recorded as liabilities as described in Notes 2 and 3. Other amounts are related
to accrued expenses owed to professionals, consultants, advisors and others who
are working on seeking a Business Combination as described in Note 1. Such work
is continuing after June 30, 2021 and amounts are continuing to accrue.
Additionally, the warrant liability will not impact the Company's liquidity
until a Business Combination has been consummated, as they do not require cash
settlement until such event has occurred.
We intend to use substantially all of the funds held in the Trust Account,
including interest (which interest shall be net of Regulatory Withdrawals and
taxes payable) to consummate our Business Combination. Moreover, we may need to
obtain additional financing either to complete a Business Combination or because
we become obligated to redeem a significant number of shares of our Common Stock
upon completion of a Business Combination. Subject to compliance with applicable
securities laws, we would only complete such financing simultaneously with
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the completion of our Business Combination. If we are unable to complete our
Business Combination because we do not have sufficient funds available to us, we
will be forced to cease operations and liquidate the Trust Account. In addition,
following our Business Combination, if cash on hand is insufficient, we may need
to obtain additional financing in order to meet our obligations. To the extent
that our capital stock or debt is used, in whole or in part, as consideration to
consummate our Business Combination, the remaining proceeds held in our Trust
Account, if any, will be used as working capital to finance the operations of
the target business or businesses, make other acquisitions and pursue our growth
strategy.
Contractual Obligations
As of June 30, 2021 and December 31, 2020, we did not have any long-term debt
obligations, capital lease obligations, operating lease obligations, purchase
obligations or long-term liabilities. In connection with the Public Offering, we
entered into an administrative services agreement to pay monthly recurring
expenses of $20,000 to an affiliate of the Sponsor for office space, utilities
and secretarial support. The administrative services agreement terminates upon
the earlier of the completion of a Business Combination or the liquidation of
the Company.
The underwriters are entitled to underwriting discounts and commissions of 5.5%,
of which 2.0% ($15,000,000) was paid at the closing of the Public Offering, and
3.5% ($26,250,000) was deferred. As a result of the purchase of the
Over-Allotment Option Units by the underwriters on April 22, 2021, the upfront
and Deferred Discount increased to $16,000,000 and $28,000,000, respectively.
The Deferred Discount will become payable to the underwriters from the amounts
held in the Trust Account solely in the event that the Company completes a
Business Combination, subject to the terms of the underwriting agreement. The
underwriters are not entitled to any interest accrued on the Deferred Discount.
Recently Issued Accounting Pronouncements Not Yet Adopted
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
the Company's financial statements based on current operations of the
Company. The impact of any recently issued accounting standards will be
re-evaluated on a regular basis or if a Business Combination is completed where
the impact could be material.
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