Restatement of Financial Statements

9 Months Ended

Sep. 30, 2021

Revision Of Prior Period Financial Statements [Abstract]

Restatement of Financial Statements

Note 2 – Restatement of Financial Statements 

Redeemable Equity Instruments

As a result of recent guidance to Special Purpose Acquisition Companies by the SEC regarding redeemable equity instruments, the Company revisited its application of ASC 480-10-S99 on the Company’s financial statements. The Company had previously classified a portion of its Public Subunits (and the underlying shares of common stock) in permanent equity. Subsequent to the re-evaluation, the Company’s management concluded that all of its Public Subunits should be classified as temporary equity. The identified errors impacted the Company’s Current Report on Form 8-K on December 30, 2020 containing the IPO balance sheet as of December 23, 2020, Annual Report on Form 10-K on March 31, 2021 containing the Company’s financial statements for the fiscal year ended December 31, 2020, Quarterly Report on Form 10-Q on May 24, 2021 containing financial statements as of March 31, 2021, Quarterly Report on Form 10-Q on August 23, 2021 containing financial statements as of June 30, 2021, and Quarterly Report on Form 10-Q on November 15, 2021 containing financial statements as of September 30, 2021. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated the errors and has determined that the related impacts were qualitatively immaterial but quantitatively material to the aforementioned 8-K, 10-K and 10-Q filings, and concluded that the impacted financial statements should be restated to correct the errors.

Warrants & Fair Value of Representative Shares

On April 12, 2021, the Staff of the SEC issued a statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies.” In the statement, the SEC Staff, among other things, highlighted potential accounting implications of certain terms that are common in warrants issued in connection with the initial public offerings of special purpose acquisition companies such as the Company. As a result of the Staff statement and in light of evolving views as to certain provisions commonly included in warrants issued by special purpose acquisition companies, the Company re-evaluated the accounting for its Public Warrants and Private Warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded that the Private Warrants do not meet the criteria to be classified in stockholders’ equity, since the Private Warrants meet the definition of a derivative under ASC 815-40. Additionally, the Company re-evaluated the fair value of the Representative Shares and concluded that the fair value previously used for the Representative Shares was incorrect. The identified errors impacted the Company’s Form 8-K filing on December 30, 2020 containing the IPO balance sheet as of December 23, 2020 and the Company’s Form 10-K filing on March 31, 2021 containing the Company’s 2020 annual financial statements. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated the errors and has determined that the related impacts were qualitatively immaterial to the aforementioned 8-K and 10-K filings but, in consideration that the Company is restating the financial statements contained in the aforementioned filings to correct the classification of Public Subunits as temporary equity, the Company concluded that the impacted financial statements should also be restated to correct the identified errors related to classification of Private Warrants and the fair value of Representative Shares.

Impact of the Restatement

The impact of the restatement on the audited balance sheet as of December 23, 2020, audited financial statements as of and for the year ended December 31, 2020, and unaudited interim condensed financial statements as of and for the three months ended March 31, 2021 are presented below.

	As Previously Reported			Adjustments			As Restated
Audited Balance Sheet at December 23, 2020
Warrant Liabilities	$	-		$	574,676		$	574,676
Total Liabilities		-			574,676			574,676
Shares Subject to Possible Redemption		135,094,307			4,285,693			139,380,000
Common Stock		479			(42	)		437
Additional paid-in capital		5,007,859			(4,860,327	)		147,532
Total Stockholders’ Equity		5,000,008			(4,860,369	)		139,639
Audited Balance Sheet at December 31, 2020
Warrant Liabilities	$	-		$	580,860		$	580,860
Total Liabilities		303,738			580,860			884,598
Shares Subject to Possible Redemption		134,983,359			4,399,888			139,383,247
Common Stock		480			(43	)		437
Additional paid-in capital		5,118,821			(4,974,521	)		144,300
Accumulated Deficit		(119,298	)		(6,184	)		(125,482	)
Total Stockholders’ Equity		5,000,003			(4,980,748	)		19,255
Audited Statement of Operations for the year ended December 31, 2020
Change in Fair Value of Warrants	$	-		$	(6,184	)	$	(6,184	)
Weighted average shares outstanding, basic and diluted		4,198,081			(4,198,081	)		-
Basic and diluted weighted average shares outstanding, common stock subject to redemption		-			339,344			339,344
Basic and diluted weighted average shares outstanding, common stock not subject to redemption		-			3,429,593			3,429,593
Basic and diluted net income (loss) per share		(0.03	)		0.03			-
Basic and diluted net income (loss) per share, common stock subject to redemption		-			52.43			52.43
Basic and diluted net income (loss) per share, common stock not subject to redemption		-			(5.22	)		(5.22	)
Audited Statement of Changes in Stockholders’ Equity for the year ended December, 2020
Issuance of Representative Shares on November 25, 2020 - Additional Paid-in-Capital	$	-		$	792,428		$	792,428
Issuance of Representative Shares on November 25, 2020 - Stockholders' Equity (Deficit)		15			792,428			792,443
Initial Value of Private Warrants		-			(574,676	)		(574,676	)
Reclassification of offering costs related to Public Shares		-			3,655,046			3,655,046
Other Offering Expenses		(532,623	)		(792,428	)		(1,325,051	)
Net Loss		(155,543	)		(6,184	)		(121,727	)
Maximum number of redeemable shares - Shares		(13,364,689	)		(435,311	)		(13,800,000	)
Maximum number of redeemable shares - Par Value		(1,336	)		(44	)		(1,380	)
Maximum number of redeemable shares - Paid-in-Capital		(134,982,023	)		11,510,162			(123,471,861	)
Maximum number of redeemable shares - Stockholders' Equity (Deficit)		(134,983,359	)		11,510,118			(123,473,241	)
Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against additional paid-in-capital (“APIC”)		-			(19,561,805	)		(19,561,805	)
Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC (interest earned on trust account)		-			(3,247	)		(3,247	)
Audited Statement of Cash Flows for the year ended December 31, 2020
Net Loss	$	(115,543	)	$	(6,184	)	$	(121,727	)
Change in fair value of warrant liabilities		-			6,184			6,184
Initial value of warrant liabilities		-			574,676			574,676
Initial value of common stock subject to possible redemption		135,094,307			(11,621,066	)		123,473,241
Reclassification of offering costs related to Public Shares		-			(3,655,046	)		(3,655,046	)
Change in value of common stock subject to possible redemption		(110,948	)		110,948			-
Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC		-			19,561,805			19,561,805
Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC (interest earned on trust account)		-			3,247			3,247
Unaudited Balance Sheet as of March 31, 2021
Common Stock subject to possible redemption	$	134,522,628		$	4,884,666		$	139,407,294
Common stocks, $0.0001 par value		485			(48	)		437
Additional paid-in capital		(5,345	)		125,598			120,253
Total stockholders’ equity (deficit)		5,000,011			(4,884,666	)		115,345
Unaudited Statement of Operations for the three months ended March 31, 2021
Weighted average shares outstanding, basic and diluted		18,169,000			(18,169,000	)		0
Basic and diluted weighted average shares outstanding, common stock subject to redemption		-			13,800,000			13,800,000
Basic and diluted weighted average shares outstanding, common stock not subject to redemption		-			4,369,000			4,369,000
Basic and diluted net income (loss) per share	$	0.01		$	(0.01	)	$	-
Basic and diluted net income (loss) per share, common stock subject to redemption		-			0.01			0.01
Basic and diluted net income (loss) per share, common stock not subject to redemption		-			0.01			0.01
Unaudited Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2021
Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC	$	-		$	(24,047	)	$	(24,047	)
Unaudited Statement of Cash Flows for the three months ended March 31, 2021
Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC (interest earned on trust account)	$	-		$	24,047		$	24,047