Restatement of Previously Issued Financial Statements

5 Months Ended

Dec. 31, 2020

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

Note 2 — Restatement of Previously Issued Financial Statements

The Company concluded it should restate its previously issued financial statements by amending Amendment No. 1 to its Annual Report on Form 10-K/A, filed with the SEC on May 19, 2021, to classify all Class A common stock subject to possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC 480, paragraph 10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Class A common stock in permanent equity, or total stockholders’ equity. Although the Company did not specify a maximum redemption threshold, its charter currently provides that, the Company will not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. Also, in connection with the change in presentation for the Class A common stock subject to possible redemption, the Company also revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company. As a result, the Company restated its previously filed financial statements to present all redeemable Class A common stock as temporary equity, recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480 and to calculate earnings per share by allocating income and losses pro rata for each class of common stock.

The Company’s previously filed financial statements that contained the error were initially reported in the Company’s Form 8-K filed with the SEC on December 21, 2020 (the “Post-IPO Balance Sheet”), and the Company’s Annual Report on 10-K for the annual period ended December 31, 2020, which were previously restated in the Company’s Amendment No. 1 to its Form 10-K as filed with the SEC on May 19, 2021, as well as the Form 10-Qs for the quarterly periods ended March 31, 2021 and June 30, 2021 (the “Affected Periods”). These financial statements restate the Company’s previously issued audited financial statements covering the periods through December 31, 2020. The unaudited financial statements for the quarterly periods ended March 31, 2021 and June 30, 2021 will be restated in the Company’s Form 10-Q for the quarterly period ended September 30, 2021. The unaudited financial statements for the quarterly period ended September 30, 2021 already applied the updated classification of the Class A common stock subject to possible redemption. Please see Note 1, Note 3, Note 8 and Note 9, which have been updated to reflect the restatement of the financials contained in this Annual Report.

The change in the carrying value of the redeemable shares of Class A common stock in the Post-IPO Balance Sheet resulted in a decrease of approximately $5.5 million in additional paid-in capital and an increase of approximately $18.5 million to accumulated deficit, as well as a reclassification of 2,355,182 shares of Class A common stock from permanent equity to temporary equity as presented below.

	As Previously
As of December 15, 2020:	Reported		Adjustment		As Restated
Total assets	$	178,262,938	$	—	$	178,262,938
Total liabilities	$	21,335,781	$	—	$	21,335,781
Class A common stock subject to possible redemption		151,927,148		24,022,852		175,950,000
Preferred stock		—		—		—
Class A common stock		235		(235)		—
Class B common stock		431		—		431
Additional paid-in capital		5,510,215		(5,510,215)		—
Accumulated deficit		(510,872)		(18,512,402)		(19,023,274)
Total stockholders’ equity (deficit)	$	5,000,009	$	(24,022,852)	$	(19,022,843)
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit)	$	178,262,938	$	—	$	178,262,938

	As Previously
As of December 31, 2020:	Reported		Adjustment		As Restated
Total assets	$	177,701,799	$	—	$	177,701,799
Total liabilities	$	23,222,304	$	—	$	23,222,304
Class A common stock subject to possible redemption		149,479,490		26,470,510		175,950,000
Preferred stock		—		—		—
Class A common stock		260		(260)		—
Class B common stock		431		—		431
Additional paid-in capital		7,957,848		(7,957,848)		—
Accumulated deficit		(2,958,534)		(18,512,402)		(21,470,936)
Total stockholders’ equity (deficit)	$	5,000,005	$	(26,470,510)	$	(21,470,505)
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit)	$	177,701,799	$	—	$	177,701,799

The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of December 31, 2020:

The Company’s statement of stockholders’ equity has been restated to reflect the changes to the impacted stockholders’ equity accounts described above.

The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the period from July 31, 2020 (inception) through December 31, 2020:

	For the Period from July 31, 2020 (inception) through December 31, 2020
	As Restated		Adjustment		As Restated
Supplemental Disclosure of Noncash Financing Activities:
Initial value of Class A common stock subject to possible redemption	$	165,443,398	$	(165,443,398)	$	—
Change in value of Class A common stock subject to possible redemption	$	(15,963,908)	$	15,963,908	$	—

The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per share is presented below for the period from July 31, 2020 (inception) through December 31, 2020:

	Earnings Per Share for Class A Common Stock
	As Previously Reported		Adjustment		As Restated
For the Period from July 31, 2020 (inception) through December 31, 2020
Net loss	$	(2,958,534)	$	—	$	(2,958,534)
Weighted average shares outstanding		17,250,000		(15,170,213)		2,079,787
Basic and diluted earnings per share	$	0.00	$	(0.50)	$	(0.50)

	Earnings Per Share for Class B Common Stock
	As Previously Reported		Adjustment		As Restated
For the Period from July 31, 2020 (inception) through December 31, 2020
Net loss	$	(2,958,534)	$	—	$	(2,958,534)
Weighted average shares outstanding		3,817,819		0		3,817,819
Basic and diluted earnings per share	$	(0.77)	$	0.27	$	(0.50)

In connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to

liquidate after June 15, 2022. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.