The following discussion summarizes the significant factors affecting the
operating results, financial condition, liquidity and capital resources of
OVERVIEW
We are a blank check company incorporated in
On
On
On
Of the gross proceeds received from the IPO and Private Placement,
Our Sponsor, executive officers and directors (the "initial stockholders")
agreed not to propose an amendment to our amended and restated certificate of
incorporation that would modify the substance or timing of our obligation to
provide holders of our Public Shares the right to have their shares redeemed in
connection with a Partnering Transaction or to redeem 100% of our Public Shares
if we do not complete a Partnering Transaction within 24 months from the closing
of our initial public offering, or
We expect to continue to incur significant costs in the pursuit of a Partnering Transaction. We cannot assure you that our plans to complete a Partnering Transaction will be successful.
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RESULTS OF OPERATIONS
As of
For the three months ended
For the three months ending
General and administrative expenses included professional fees, franchise taxes and fees related to the services agreement with Post Holdings, Inc. ("Post"). Changes in the fair value of derivative warrant liabilities recognized in the Condensed Statements of Operations were primarily due to market factors largely driven by changes in the fair value of the underlying shares of the warrants.
LIQUIDITY AND CAPITAL RESOURCES
As of
Our liquidity needs prior to the closing of the IPO were satisfied through a
payment of
Based on the foregoing, we believe that we will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors, to meet our needs through the earlier of the consummation of a Partnering Transaction or one year from this filing. Over this time period, we will use these funds for paying existing accounts payable, identifying and evaluating prospective Partnering Transaction candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Partnering Transaction.
We do not have any long-term debt obligations, finance lease obligations, operating lease obligations, purchase obligations or long-term liabilities.
On
The underwriters are entitled to underwriting discounts and commissions of
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our financial statements and related disclosures in
conformity with accounting principles generally accepted in
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Derivative Financial Instruments
We account for our warrants in accordance with the guidance contained in Accounting Standards Codification ("ASC") Topic 815, "Derivatives and Hedging," under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify our warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. The Public Warrants were initially measured at fair value using a Monte Carlo simulation at their original issuance and subsequently measured using their quoted market price once they became actively traded on the NYSE during the third quarter of fiscal 2021. The fair value of the Private Placement Warrants was determined using a Black-Scholes Pricing Model using observable and unobservable market data as the significant inputs (risk free rate, dividend yield and volatility).
Series A Common Stock Subject to Possible Redemption
We account for our Series A common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480, "Distinguishing Liabilities from
Equity" ("ASC 480"). Conditionally redeemable Series A common stock (including
shares of Series 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) is classified as temporary
equity. At all other times, Series A common stock is classified as stockholders'
equity. Our Series 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, as of
Net Earnings (Loss) per Share
Basic and diluted earnings (loss) per share of Series A common stock subject to possible redemption (the "redeemable common stock") and the Series A common stock and Series F common stock not subject to possible redemption (collectively, the "non-redeemable common stock") are presented separately under the two-class method. Basic earnings (loss) per share is based on the average number of shares outstanding during the periods presented for the redeemable common stock and non-redeemable common stock. Net earnings is allocated between the redeemable common stock and non-redeemable common stock based on the weighted-average shares outstanding during the periods presented. The redeemable common stock is measured at its redemption value each period. As allowed for within ASC 480, we have made an election to treat the portion of the remeasurement adjustment that exceeds fair value as an adjustment to income available to holders of shares of redeemable common stock and to income available to holders of shares of non-redeemable common stock for basic and diluted earnings (loss) per share. Diluted earnings (loss) per share is based on the average number of shares of redeemable common stock and non-redeemable common stock used for the basic earnings per share calculation, adjusted for the dilutive effect of warrants, if any, using the "treasury stock" method. In addition, net earnings (loss) for diluted earnings per share is adjusted for the after-tax impact of changes to the fair value of derivative warrant liabilities, to the extent it is dilutive. We have not considered the effect of the warrants sold in the IPO and the Private Placement to purchase an aggregate 11,863,333 shares of Series A common stock in the calculation of diluted earnings (loss) per share, since the exercise of the warrants into shares of Series A common stock is contingent upon the occurrence of future events. See Note 5 within "Notes to Condensed Financial Statements" for the calculation of basic and diluted earnings (loss) per share of redeemable common stock and non-redeemable common stock.
RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS
See Note 3 within "Notes to Condensed Financial Statements" for a discussion regarding recently issued and adopted accounting standards.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, are made throughout this Quarterly Report on Form 10-Q (the "Quarterly Report"). These forward-looking statements are sometimes identified from the use of forward-looking words such as "believe," "should," "could," "potential," "continue," "expect," "project," "estimate," "predict," "anticipate," "aim," "intend," "plan," "forecast," "target," "is likely," "will," "can," "may" or "would" or the negative of these terms or similar expressions elsewhere in this Quarterly Report. Our financial condition, results of operations and cash flows may differ materially from those in the forward-looking statements. Such statements are based on management's current views and assumptions and involve risks and uncertainties that could affect expected results. Those risks and uncertainties include, but are not limited to, the following:
•our being a company with no operating history and no revenues;
•our ability to generate a number of potential Partnering Transaction opportunities;
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•our ability to select an appropriate target business or businesses for our Partnering Transaction;
•our ability to complete a Partnering Transaction;
•the limited opportunity for our Public Stockholders to vote on our proposed Partnering Transaction;
•our potential ability to obtain additional financing to complete a Partnering Transaction, including from the Sponsor, Post or other third parties;
•our expectations around the performance of a prospective target business or businesses;
•actual and potential conflicts of interest relating to Post and its subsidiaries, the Sponsor and other entities in which members of our management team are involved;
•our directors and officers allocating their time to other businesses and potentially having conflicts of interest with our business or in approving a Partnering Transaction;
•our success in retaining or recruiting, or changes required in, our officers, key employees or directors following a Partnering Transaction;
•our ability to consummate a Partnering Transaction due to the uncertainty
resulting from the COVID-19 pandemic and other events (such as the ongoing
conflict in
•the voting structure of our common stock, including any potential adverse effect on our ability to complete a Partnering Transaction timely or cost effectively, and, following a Partnering Transaction, our status as a controlled company and the ability of the Sponsor and Post to exercise control over our policies and operations, each as a result of the high vote feature of our Series B common stock;
•our public securities' liquidity and trading;
•the possible lack of a market for our securities;
•changes in laws or regulations;
•the use of proceeds not held in the Trust Account or available to us from interest income on the Trust Account balance;
•the Trust Account not being subject to claims of third parties;
•the classification of our warrants as liabilities;
•our financial performance; and
•other risks and uncertainties included under "Risk Factors" within Item 1A of
Part II of this Quarterly Report and in our Annual Report on Form 10-K for the
fiscal year ended
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to actual results or to changes in our expectations.
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