NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company previously accounted for its outstanding Public Warrants (as defined in Note 4) and Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of stock, all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement (the “Warrant Agreement”). Additionally, the Company revised the Statement of Changes in Stockholders’ Equity to present temporary equity separate from permanent equity, which allows for better alignment to the presentation of the Company’s Balance Sheets.

In further consideration of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s common stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the tender offer provision fails the “classified in stockholders’ equity” criteria as contemplated by ASC Section 815-40-25.

As a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period as well as re-evaluate the treatment of the warrants (including on August 18, 2020, September 30, 2020 and December 31, 2020) and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.

The Company’s accounting for the Warrants as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported investments held in trust, operating expenses, cash flows or cash.


	As
	Previously		As
	Reported		Adjustments		Restated

Balance sheet as of August 18, 2020
Warrant liability	$	—	$	13,602,000	$	13,602,000
Total Liabilities		7,176,121		13,602,000		20,778,121
Class A Common Stock Subject to Possible Redemption		190,045,060		(13,602,000)		176,443,060
Class A Common Stock		165		136		301
Additional Paid-in Capital		5,000,263		837,220		5,837,483
Accumulated Deficit		(1,000)		(837,356)		(838,356)
		5,000,003		-		5,000,003
Number of Class A common stock subject to redemption		19,004,506		(1,360,200)		17,644,306

Balance sheet as of September 30, 2020 (unaudited)
Warrant liability	$	—	$	13,135,500	$	13,135,500
Total Liabilities		8,126,283		13,135,500		21,261,783
Class A Common Stock Subject to Possible Redemption		218,312,810		(13,135,500)		205,177,310
Class A Common Stock		182		131		313
Additional Paid-in Capital		5,082,496		370,725		5,453,221
Accumulated Deficit		(83,243)		(370,856)		(454,099)
		5,000,010		-		5,000,010
Number of Class A common stock subject to redemption		21,831,281		(1,313,550)		20,517,731

Balance sheet as of December 31, 2020
Warrant liability	$	—	$	13,365,500	$	13,365,500
Total Liabilities		9,219,008		13,365,500		22,584,508
Class A Common Stock Subject to Possible Redemption		216,934,140		(13,365,500)		203,568,640
Class A Common Stock		196		133		329
Additional Paid-in Capital		6,461,152		600,722		7,061,874
Accumulated Deficit		(1,461,914)		(600,855)		(2,062,769)
		5,000,009		-		5,000,009
Number of Class A common stock subject to redemption		21,693,414		(1,336,550)		20,356,864

Three months ended September 30, 2020 (unaudited)
Change in fair value of warrant liability		—		466,499		466,499
Transaction costs		—		(837,355)		(837,355)
Net loss	$	(82,243)	$	(370,856)	$	(453,099)
Basic and diluted weighted average shares outstanding, common stock subject to possible redemption		—		18,952,768		18,952,768
Basic and diluted net earnings per share, common stock subject to possible redemption		—		—		—
Weighted average non-redeemable common shares outstanding, basic and diluted		5,952,197		(2,577,316)		3,374,881
Basic and diluted net loss per non-redeemable common share	$	(0.02)		—		—

Nine months ended September 30, 2020 (unaudited)
Change in fair value of warrant liability		—		466,499		466,499
Transaction costs		—		(837,355)		(837,355)
Net loss	$	(82,243)	$	(370,856)	$	(453,099)
Basic and diluted weighted average shares outstanding, common stock subject to possible redemption		15,112,852		3,839,915		18,952,768
Basic and diluted net earnings per share, common stock subject to possible redemption		—		—		—
Weighted average non-redeemable common shares outstanding, basic and diluted		3,895,358		(470,933)		3,424,425
Basic and diluted net loss per non-redeemable common share		(0.02)		0.02		—
Year ended December 31, 2020
Change in fair value of warrant liability		—		236,500		236,500
Transaction costs		—		(837,355)		(837,355)
Net loss	$	(1,460,914)	$	(600,855)	$	(2,061,769)
Basic and diluted weighted average shares outstanding, common stock subject to possible redemption		16,131,141		4,192,832		20,323,974
Basic and diluted net earnings per share, common stock subject to possible redemption		—		—		—
Weighted average non-redeemable common shares outstanding, basic and diluted		4,542,198		(2,223,472)		2,318,726
Basic and diluted net loss per non-redeemable common share	$	(0.32)		—		(0.89)

Cash Flow Statement for the Nine months ended September 30, 2020
Net loss	$	(82,243)	$	(370,856)	$	(453,099)
Allocation of initial public offering costs		—		837,356		837,356
Initial classification of warrant liability		—		13,602,000		13,602,000
Initial classification of common stock subject to possible redemption		218,395,060		(13,602,000)		204,793,060
Change in value of common stock subject to possible redemption		(82,250)		466,500		384,250
Cash Flow Statement for the Year ended December 31, 2020 (audited)
Net loss	$	(1,460,914)	$	(600,856)	$	(2,061,770)
Allocation of initial public offering costs		—		837,356		837,356
Initial classification of warrant liability		—		13,602,000		13,602,000
Initial classification of common stock subject to possible redemption		218,395,060		(13,602,000)		204,793,060
Change in value of common stock subject to possible redemption		(1,460,920)		236,500		(1,224,420)