References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Riverview Acquisition Corp. References to our "management" or
our "management team" refer to our officers and directors, and references to the
"Sponsor" refer to Riverview Sponsor Partners, 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" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
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 Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
completion of the Proposed Business Combination (as defined below), 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, including that the conditions of
the Proposed Business Combination are not satisfied. 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 the Company's Annual Report on Form 10-K 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.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations has been amended and restated to give effect to the restatement of
our financial statements as of August 10, 2021. Management identified errors
made in its historical financial statements where, at the closing of our Initial
Public Offering, we improperly classified our Class A ordinary shares subject to
possible redemption. We previously determined the Class A ordinary shares
subject to possible redemption to be equal to the redemption value of $10.00 per
share of Class A ordinary share while also taking into consideration a
redemption cannot result in net tangible assets being less than $5,000,001.
Management determined that the Class A ordinary shares issued during the Initial
Public Offering can be redeemed or become redeemable subject to the occurrence
of future events considered outside of the Company's control. Therefore,
management concluded that the redemption value should include all Class A
ordinary shares subject to possible redemption, resulting in the Class A
ordinary shares subject to possible redemption being equal to their redemption
value. As a result, management has noted a reclassification error related to
temporary equity and permanent equity. This resulted in a restatement to the
initial carrying value of the Class A ordinary shares subject to possible
redemption with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and Class A ordinary shares.
Overview
We are a blank check company formed under the laws of the State of Delaware on
February 4, 2021 for the purpose of effectuating a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or other similar
business combination with one or more businesses (the "Business Combination").
We intend to effectuate our Business Combination using cash from the proceeds of
the Initial Public Offering and the sale of the Private Placement Warrants, our
capital stock, debt or a combination of cash, stock 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.
Recent Developments
On April 4, 2022, the Company entered into a Transaction Agreement, by and among
Riverview, Westrock Coffee Holdings, LLC, a Delaware limited liability company
("Westrock"), Origin Merger Sub I, Inc., a Delaware corporation and a
wholly-owned subsidiary of Westrock ("Merger Sub I") and Origin Merger Sub II,
LLC, a Delaware limited liability company and a wholly-owned subsidiary of
Westrock ("Merger Sub II," together with Merger Sub I, the "Merger Subs") (as
may be amended and/or restated from time to time, the "Transaction Agreement").
The Mergers were unanimously approved by the Company's Board of Directors and
Westrock's Board of Managers.
Riverview and Westrock have entered into Subscription Agreements (collectively,
the "PIPE Subscription Agreements"), each dated as of April 4, 2022, with
certain investors (collectively, the "PIPE Investors"), pursuant to which, among
other things, Riverview and Westrock have, respectively, agreed to issue and
sell, in private placements to close immediately prior to the Closing, an
aggregate of 22,150,000 shares of Riverview Class A Common Stock and 2,850,000
Westrock Common Shares for a purchase price of $10.00 per share (the "PIPE
Financing").
Riverview, Westrock and the Sponsor, concurrently with the execution and
delivery of the Transaction Agreement, have entered into the Sponsor Support
Agreement (the "Sponsor Support Agreement"), pursuant to which the Sponsor has
agreed, among other things, to vote (or execute and return an action by written
consent), or cause to be voted at the Riverview Stockholders' Meeting (or
validly execute and return and cause such consent to be granted with respect
to), all of its shares of Riverview Common Stock in favor of (A) the approval
and adoption of the Transaction Agreement and approval of the Mergers and all
other transactions contemplated by the Transaction Agreement, (B) against any
action, agreement or transaction or proposal that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
Riverview under the Transaction Agreement or that would reasonably be expected
to result in the failure of the Mergers from being consummated and (C) each of
the proposals and any other matters necessary or reasonably requested by
Riverview for consummation of the Mergers and the other transactions
contemplated by the Transaction Agreement.
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Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from February 4, 2021 (inception) through June 30, 2022 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. 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, 2022, we had a net loss of $10,558,940,
which consists of change in fair value of warrant liabilities of $9,776,426,
provision for income taxes of $34,787, unrealized gain on marketable securities
held in Trust Account of $12,860 and operating and formation cost of $1,051,247
offset by interest earned on marketable securities held in Trust Account of
$316,380.
For the six months ended June 30, 2022, we had a net loss of $10,386,515, which
consists of change in fair value of warrant liabilities of $8,771,164, provision
for income taxes of $34,787 and operating and formation cost of $1,984,187
offset by interest earned on marketable securities held in Trust Account of
$403,623.
For the three months ended June 30, 2021, we had a net income of $63, which
consisted of formation and operating costs.
For the period from February 4, 2021 (inception) through June 30, 2021, we had a
net loss of $8,413, which consisted of formation and operating costs.
Liquidity and Capital Resources
On August 10, 2021, we consummated the Initial Public Offering of 25,000,000
Units at $10.00 per Unit, generating gross proceeds of $250,000,000.
Simultaneously with the closing of the Initial Public Offering, we consummated
the sale of 7,400,000 Private Placement Warrants at a price of $1.00 per Private
Placement Warrant in a private placement to the Sponsor, generating gross
proceeds of $7,400,000.
For the six months ended June 30, 2022, cash used in operating activities was
$507,130. Net loss of $10,386,515 was affected by change in fair value of
warrant liabilities of $8,771,164, provision for income tax of $34,787 and
interest earned on marketable securities held in Trust Account of $403,623.
Changes in operating assets and liabilities provided $1,477,057 of cash for
operating activities.
For the period from February 4, 2021 (inception) through June 30, 2021, cash
used in operating activities was $8,413 due to net loss of $8,413.
As of June 30, 2022, we had marketable securities held in the Trust Account of
$250,257,574 (including 257,574 interest income and net of unrealized losses)
consisting of Money Market Funds. Interest income on the balance in the Trust
Account may be used by us to pay taxes. Through June 30, 2022, we have withdrawn
interest earned from the Trust Account of $181,781.
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We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (less
income taxes payable), to complete our Business Combination. To the extent that
our capital stock 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, 2022, we had cash of $796,388. 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.
Management expects to incur significant costs in pursuit of its acquisition
plans. 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. If such funds are insufficient to repay the
loan amounts, the unpaid amounts would be forgiven. Up to $1,500,000 of such
Working Capital Loans may be convertible into warrants of the post-Business
Combination entity at a price of $1.00 per warrant. The warrants would be
identical to the Private Placement Warrants.
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.
Going Concern
In connection with the Company's 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 the Company is unable to raise additional
funds to alleviate liquidity needs, obtain approval for an extension of the
deadline or complete a Business Combination by February 10, 2023, then the
Company 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 the Company's 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 the Company be unable to continue as a going concern. The Company intends
to complete a Business Combination before the mandatory liquidation date or
obtain approval for an extension.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of June 30, 2022. 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 the Sponsor
or an affiliate of the Sponsor a total of up to $5,000 per month for secretarial
and administrative services. We began incurring these fees on August 5, 2021 and
will continue to incur these fees monthly until the earlier of the completion of
the Business Combination and our liquidation.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,750,000
in the aggregate. The deferred fee 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.
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:
Warrant Liabilities
We account for the warrants issued in connection with our Initial Public
Offering in accordance with the guidance contained in ASC 815-40-15-7D 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.
Class A Common Stock Subject to Possible Redemption
We account for our common stock subject to possible conversion in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Common stock subject to mandatory
redemption is classified as a liability instrument and measured at fair value.
Conditionally redeemable common stock (including common stock that features
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, common stock is
classified as stockholders' equity. Our common stock features certain redemption
rights that are considered to be outside of our control and subject to
occurrence of uncertain future events. Accordingly, common stock subject to
possible redemption is presented at redemption value as temporary equity,
outside of the stockholders' deficit section of our condensed balance sheets.
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Net Income (Loss) Per Common Share
The Company complies with accounting and disclosure requirements of FASB ASC
Topic 260, "Earnings Per Share". The Company has two classes of shares, which
are referred to as Class A ordinary shares and Class B ordinary shares. Income
and losses are shared pro rata between the two classes of shares. Net income
(loss) per ordinary share is computed by dividing net income (loss) by the
weighted average number of ordinary shares outstanding for the period.
Remeasurement associated with the redeemable Class A ordinary shares is excluded
from income (loss) per ordinary share as the redemption value approximates fair
value.
Recent Accounting Standards
In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments
and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies
accounting for convertible instruments by removing major separation models
required under current GAAP. ASU 2020-06 removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope
exception, and it also simplifies the diluted earnings per share calculation in
certain areas. ASU 2020-06 is effective for fiscal years beginning after
December 15, 2023, including interim periods within those fiscal years, with
early adoption permitted. The Company is currently assessing the impact, if
any, that ASU 2020-06 would have on its financial position, results of
operations or cash flows.
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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