References to the "Company," "our," "us" or "we" refer to
Overview
We are a blank check company incorporated as a
The registration statement for our initial public offering, or IPO, was declared effective onMarch 18, 2021 . OnMarch 23, 2021 , we consummated the IPO of 25,000,000 Units (as defined below), at$10.00 per Unit, generating gross proceeds of$250.0 million . The Company granted the underwriters in the IPO, or the Underwriters, a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments, if any. OnMarch 31, 2021 , the Underwriters partially exercised the over-allotment option and purchased an additional 2,128,532 Units, generating an aggregate of gross proceeds of approximately$21.3 million . Each Unit consists of one Class A ordinary share, and one-third of one redeemable warrant to purchase one Class A ordinary share, or a Public Warrant, at a price of$11.50 per whole share, or the Units and, with respect to the Class A ordinary shares included in the Units sold, the Public Shares. We incurred transaction costs for the IPO and over-allotment of approximately$15.7 million , inclusive of approximately$9.5 million in deferred underwriting commissions.
Simultaneously with the closing of the IPO, we consummated the private placement
of 4,666,667 warrants at a price of
55
--------------------------------------------------------------------------------
Table of Contents
Upon the closing of the IPO and exercise of the over-allotment option, and the
simultaneous Private Placements, approximately
If we have not completed a Business Combination within 24 months from the closing of the IPO, 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 and not previously released to us to pay its taxes (less up to$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish shareholders' rights as shareholders (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 shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations underDelaware law to provide for claims of creditors and the requirements of other applicable law.
Results of Operations
For the period from
Our business activities from inception to
Liquidity, Capital Resources and Going Concern
As of
Our liquidity needs up to
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
Management has determined that they will not have enough cash to meet its obligations as they become due. Management expects to incur significant costs in pursuit of its acquisition plans. We believe we will need to raise additional funds in order to meet the expenditures required for operating our business and to consummate the Business Combination. Moreover, we may need to obtain additional financing or draw on the Working Capital Loans (as defined below) either to complete the Business Combination or because we become obligated to redeem a significant number of the Public Shares upon consummation of the Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of the Business Combination. If we are unable to complete the Business Combination because it does not have sufficient funds available, we will be forced to cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet its obligations.
In connection with our assessment of going concern considerations in accordance with FASB's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that if we are unable to raise additional funds to alleviate liquidity needs then we will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about our ability to continue as a going concern one year from the date that these financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should we be unable to continue as a going concern. We intend to complete the Business Combination before the mandatory liquidation date or obtain approval for an extension.
The Company is within 12 months of its mandatory liquidation as of the time of filing the 10K. In connection with the Company's assessment of going concern considerations in accordance with Accounting Standards Update, or ASU, 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," this raises substantial doubt about the Company's ability to continue as a going concern one year from the date that the financial statements included in this Annual Report on Form 10-K are issued.
Our financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
56
--------------------------------------------------------------------------------
Table of Contents
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or other long-term
liabilities, other than an agreement to pay the sponsor a monthly fee of
The underwriters of the IPO are entitled to a deferred underwriting commission
of 3.5% of the gross proceeds of the IPO and over-allotment, or
Critical Accounting Estimates
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
Warrants Liability
We evaluated the Warrants in accordance with ASC 815-40 and concluded that a provision in the Warrant Agreement related to certain tender or exchange offers as well as provisions that provided for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant, precludes the Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815-40 and are not eligible for an exception from derivative accounting, the Warrants are recorded as derivative liabilities on our Balance Sheet and measured at fair value at inception (on the date of the IPO) and at each reporting date in accordance with ASC 820, "Fair Value Measurement", with changes in fair value recognized in our Statement of Operations in the period of change.
Offering Costs Associated with the Initial Public Offering
We comply with the requirements of the ASC 340-10-S99-1, "Other Assets and Deferred Costs." Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the IPO that were directly related to the IPO. Offering costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value basis, compared to total proceeds received. Offering costs associated with Warrant liabilities are expensed as incurred, presented as non-operating expenses in our Statement of Operations. Offering costs associated with the Class A ordinary shares were charged to shareholders' equity upon the completion of the IPO. Transaction costs of the IPO, including the partial exercise of the over-allotment, amounted to$15,622,172 , of which$618,405 were allocated to expense associated with the Warrant liability.
Ordinary Shares Subject to Possible Redemption
All of the Class A ordinary shares sold as part of the Units in the IPO contain
a redemption feature which allows for the redemption of such public shares in
connection with our liquidation, if there is a shareholder vote or tender offer
in connection with the initial Business Combination and in connection with
certain amendments to our charter. In accordance with
57
--------------------------------------------------------------------------------
Table of Contents
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary share to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary share are affected by charges against additional paid in capital and accumulated deficit.
Net Income (Loss) Per Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net income per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period. We have two classes of shares, Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. We have not considered the effect of warrants sold in the IPO and the Private Placements to purchase 13,993,314 ordinary shares in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the period presented.
Our statement of operations applies the two-class method in calculating net income per share. Basic and diluted net income per ordinary share for Class A ordinary shares and Class B ordinary shares is calculated by dividing net income attributable to us by the weighted average number of Class A ordinary shares and Class B ordinary shares outstanding, allocated proportionally to each class of shares.
Recent Accounting Pronouncements
In
Our management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Status as a
We are an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
58
--------------------------------------------------------------------------------
Table of Contents
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our IPO, (b) in which we have total annual gross revenue of at least$1.07 billion , or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates equals or exceeds$700 million as of the priorJune 30th , and (2) the date on which we have issued more than$1.0 billion in non-convertible debt securities during the prior three-year period. Additionally, we are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our Class A ordinary shares held by non-affiliates does not equal or exceed$250.0 million as of the priorJune 30th , or (2) our annual revenues did not equal or exceed$100.0 million during such completed fiscal year and the market value of our Class A ordinary shares held by non-affiliates did not equal or exceed$700.0 million as of the priorJune 30th . To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our consolidated financial statements with other public companies difficult or impossible.
© Edgar Online, source