|
(Exact name of registrant as specified in its charter)
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
(Address of Principal Executive Offices, including zip code)
|
(
|
(Registrant’s telephone number, including area code)
|
N/A
|
(Former name, former address and former fiscal year, if changed since last report)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
|
|
|
||
|
|
|
||
|
|
|
☐ Large accelerated filer
|
☐ Accelerated filer
|
|
☒
|
|
|
|
Page
|
||
PART 1 – FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
Item 2.
|
18
|
|
Item 3.
|
20 | |
Item 4.
|
20
|
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
21
|
|
Item 1A.
|
21
|
|
Item 2.
|
21
|
|
Item 3.
|
21
|
|
Item 4.
|
21 | |
Item 5.
|
21 | |
Item 6.
|
21 | |
22 |
September 30,
2021
|
December 31,
2020
|
|||||||
(Unaudited)
|
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash
|
$
|
|
$
|
|
||||
Prepaid expenses
|
|
|
||||||
Total Current Assets
|
|
|
||||||
Investments held in Trust Account
|
|
|
||||||
Total Assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
Current liabilities
|
||||||||
Accrued expenses
|
$
|
|
$
|
|
||||
Accrued offering costs
|
|
|
||||||
Promissory note- related party
|
||||||||
Total Current Liabilities
|
|
|
||||||
Warrant liabilities
|
|
|
||||||
Deferred underwriting fee payable
|
|
|
||||||
Total Liabilities
|
|
|
||||||
Commitments and contingencies
|
||||||||
Class A common stock subject to possible redemption,
|
|
|
||||||
Stockholders’ Deficit
|
||||||||
Preferred stock, $
|
|
|
||||||
Class A common stock, $
|
|
|
||||||
Class B common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total Stockholders’ Deficit
|
(
|
)
|
(
|
)
|
||||
Total Liabilities and Stockholders’ Deficit
|
$
|
|
$
|
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
For the
Period from July 30, 2020 (Inception) through September 30,
|
||||||||||
2021
|
2021
|
2020 | ||||||||||
General and administrative expenses
|
$
|
|
$
|
|
$ | |||||||
Loss from operations
|
(
|
)
|
(
|
)
|
( |
) | ||||||
Other loss:
|
||||||||||||
Interest earned on investments held in Trust Account
|
|
|
||||||||||
Change in fair value of warrant liabilities
|
(
|
)
|
(
|
)
|
||||||||
Total other loss, net
|
(
|
)
|
(
|
)
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | |||
Weighted average shares outstanding of Class A common stock
|
|
|
||||||||||
Basic and diluted loss per share, Class A common stock
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | |||||
Weighted average shares outstanding of Class B common stock
|
|
|
||||||||||
Basic and diluted net loss per share, Class B common stock
|
$
|
(
|
)
|
$
|
(
|
)
|
$ |
Class B
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Stockholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
||||||||||||||||
Balance – January 1, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||
Net income
|
—
|
|
|
|
|
|||||||||||||||
Balance – March 31, 2021 (unaudited)
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Net loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance – June 30, 2021 (unaudited)
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||
Net loss |
— |
( |
) | ( |
) | |||||||||||||||
Balance – September 30,
2021 (unaudited)
|
$ | $ | $ | ( |
) | $ | ( |
) |
|
Class B
Common Stock |
Additional
Paid-in
|
Retained
Earnings / (Accumulated |
Total
Stockholders’
|
||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit)
|
Equity
|
|||||||||||||||
Balance – July 30, 2020 (inception)
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Issuance of Class B common stock to Sponsor
|
|
|
|
|
|
|||||||||||||||
Net loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance – September 30, 2020
|
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||
|
Nine Months Ended
September 30,
|
For The Period From
July 30, 2020
(Inception) Through
September 30,
|
|||||||
2021
|
2020
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$ | ( |
|||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Change in fair value of warrant liabilities
|
|
|
||||||
Interest earned on investments held in Trust Account
|
(
|
)
|
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Net cash used in operating activities
|
(
|
)
|
|
|||||
|
||||||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from issuance of Class B common stock to Sponsor |
|
|||||||
Proceeds from promissory note - related party
|
|
|||||||
Payment of offering costs
|
(
|
)
|
(
|
|||||
Net cash provided by financing activities
|
|
|
||||||
|
||||||||
Net Change in Cash
|
(
|
)
|
|
|||||
Cash – Beginning of period
|
|
|
||||||
Cash – End of period
|
$
|
|
$
|
|
||||
|
||||||||
Non-Cash Investing and Financing Activities: |
||||||||
Offering costs included in accrued offering costs |
$ |
|
$ |
As Previously
Reported
|
Adjustment
|
As Restated
|
||||||||||
Balance Sheet as of December 31, 2020 (audited)
|
||||||||||||
Class A common stock subject to possible redemption
|
$
|
|
$
|
|
$
|
|
||||||
Class A common stock
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Additional paid-in capital
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Accumulated Deficit
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Total Stockholders’ Equity (Deficit)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Gross proceeds
|
$
|
|
||
Less:
|
||||
Proceeds allocated to Public Warrants
|
$
|
(
|
)
|
|
Class A common shares issuance costs
|
$
|
(
|
)
|
|
Plus:
|
||||
Accretion of carrying value to redemption value
|
$
|
|
||
Class A common shares subject to possible redemption
|
$
|
|
Three Months Ended
September 30, 2021
|
Nine Months Ended
September 30, 2021
|
For the Period from July 30,
2020 (Inception) Through
September 30, 2020
|
||||||||||||||||||||||
Class A
|
Class B
|
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||||||||
Basic and diluted net loss per common stock
|
||||||||||||||||||||||||
Numerator:
|
||||||||||||||||||||||||
Allocation of net loss, as adjusted
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||||
Denominator:
|
||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding
|
|
|
|
|
|
|
||||||||||||||||||
Basic and diluted net loss per common stock
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
● |
in whole and not in part;
|
● |
at a price of $
|
● |
upon not less than
|
● |
if, and only if, the reported last sale price of the
Company’s Class A common stock equals or exceeds $
|
● |
in whole and not in part;
|
● |
at a price of $
|
● |
upon a minimum of
|
● |
if, and only if, the last reported sale price of the
Company’s Class A common stock equals or exceeds $
|
● |
if, and only if, there is an effective registration
statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating thereto is available throughout the
|
Level 1: |
Quoted prices in active markets for identical assets or liabilities. An active market for
an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted
prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
Level 3: |
Unobservable inputs based on our assessment of the assumptions that market participants
would use in pricing the asset or liability.
|
|
Held-To-Maturity | Amortized
Cost
|
Gross
Holding
Gain
|
Fair Value
|
|||||||||||
December 31, 2020
|
U.S. Treasury Securities (Matured on
|
$
|
|
$
|
|
$
|
|
Description
|
Level
|
September 30, 2021
|
December 31, 2020
|
|||||||||
Assets:
|
||||||||||||
Money Market Fund
|
1
|
$
|
|
N/A
|
||||||||
Liabilities:
|
||||||||||||
Warrant Liability – Public
Warrants
|
1
|
$
|
|
$
|
|
|||||||
Warrant Liability – Private
Placement Warrants
|
3
|
$
|
|
$
|
|
September 30,
2021
|
December 31,
2020
|
|||||||
Stock price
|
$
|
|
$
|
|
||||
Term (in years)
|
|
|
||||||
Volatility
|
|
%
|
|
%
|
||||
Risk-free rate
|
|
%
|
|
%
|
||||
Dividend yield
|
|
%
|
|
%
|
|
Private Placement
|
|||
Fair value as of January 1, 2021
|
$
|
|
||
Change in fair value
|
|
|||
Fair value as of September 30, 2021
|
$
|
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings.
|
Item 1A. |
Risk Factors.
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3. |
Defaults Upon Senior Securities.
|
Item 4. |
Mine Safety Disclosures.
|
Item 5. |
Other Information.
|
Item 6. |
Exhibits
|
No.
|
Description of Exhibit
|
|
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101.INS*
|
XBRL Instance Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
SPORTS ENTERTAINMENT ACQUISITION CORP.
|
||
Date: November 12, 2021
|
By:
|
/s/ John Collins
|
Name:
|
John Collins
|
|
Title:
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
||
Date: November 12, 2021
|
By:
|
/s/ Eric Grubman
|
Name:
|
Eric Grubman
|
|
Title:
|
Chief Financial Officer
|
|
(Principal Accounting and Financial Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sports Entertainment Acquisition Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the
registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
|
b)
|
(Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John Collins
|
|
John Collins
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sports Entertainment Acquisition Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the
registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
(Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 12, 2021
|
|
/s/ Eric Grubman
|
|
Eric Grubman
|
|
Chief Financial Officer
|
|
(Principal Accounting and Financial Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period
covered by the Report.
|
/s/ John Collins
|
|
John Collins
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period
covered by the Report.
|
/s/ Eric Grubman
|
|
Eric Grubman
|
|
Chief Financial Officer
|
|
(Principal Accounting and Financial Officer)
|
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS [Abstract] | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS |
NOTE 1. DESCRIPTION
OF ORGANIZATION AND BUSINESS OPERATIONS
Sports Entertainment
Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on July 30, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging
growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of September 30,
2021, the Company had not commenced any operations. All activity for the period from July 30, 2020 (inception) through September 30, 2021 related to the Company’s formation, the initial public offering (“Initial Public Offering”), which is
described below, identifying a target company for a Business Combination and activities pursuant to the proposed Business Combination Agreement (as defined in Note 7) (see Note 7). The Company will not generate any operating revenues until
after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration
statement for the Company’s Initial Public Offering was declared effective on October 1, 2020. On October 6, 2020, the Company consummated the Initial Public Offering of 40,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $400,000,000
which is described in Note 4.
Simultaneously with
the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 10,000,000 warrants (the “Private
Placement Warrants”) at a price of $1.00 per Private Placement Warrant in private placements to Sports Entertainment Acquisition
Holdings LLC (the “Sponsor”) and an affiliate of PJT Partners LP, generating gross proceeds of $10,000,000, which is described in
Note 5.
On October 15, 2020,
the Company issued an additional 5,000,000 Units issued for total gross proceeds of $50,000,000, in connection with the underwriters’ partial exercise of their over-allotment option. Simultaneously with the partial closing of their over-allotment option,
the Company also consummated the sale of an additional 1,000,000 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $1,000,000.
Following the closing
of the Initial Public Offering on October 6, 2020, and the partial exercise of the over-allotment option on October 15, 2020, an amount of $450,000,000
($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement
Warrants was placed in a trust account (the “Trust Account”) located in the United States. The funds in the Trust Account are invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment
Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.
Substantially all of
the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants are intended to be applied generally toward consummating a Business Combination, and the Company’s management has broad discretion to identify
targets for such a potential Business Combination and over the specific application of the funds held in the Trust Account if and when such funds are properly released from the Trust Account. There is no assurance that the Company will be able
to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or
more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account
(excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it
not to be required to register as an investment company under the Investment Company Act.
The Company will
provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder
meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The
Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable).
There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will only
proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 following any related redemptions
and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does
not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer
rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock
exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to
the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial
Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed
transaction.
Notwithstanding the
foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation provides that a Public Stockholder, together with any
affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from
redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.
The Sponsor has
agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to
modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100%
of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity,
unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
If the Company has
not completed a Business Combination by October 6, 2022, or such later date as a result of a stockholder vote to amend the Amended and Restated Certificate of Incorporation (the “Combination Period”), the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
business days thereafter, redeem
the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay taxes (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will
completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the
Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.The Sponsor has
agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public
Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their
deferred underwriting commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held
in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial
Public Offering price per Unit ($10.00).
In order to protect
the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the
Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per
Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a
waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent
registered public accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the
Trust Account.
Liquidity and Capital Resources
As of September 30, 2021, the Company had $49,561
in its operating bank account and working capital deficit of approximately $5.3 million. In order to finance transaction costs in
connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined below) (see Note 6). As
of September 30, 2021 and December 31, 2020, there were no amounts outstanding under any Working Capital Loans.
The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or
third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet
the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors
to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued.
On August 19, 2021 the Company issued a $1,000,000 Promissory Note with the Sponsor (see Note 6).
|
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS |
NOTE 2. REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
In connection with the preparation of the Company’s financial statements as of September 30, 2021, the Company concluded
it should revise its financial statements to classify all Public Shares 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 previously determined the Class A common stock subject to possible redemption to be equal to the redemption value of $10.00 per Class A common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Previously, the Company did not consider redeemable shares 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. Accordingly, effective with this filing, the Company presents all redeemable Class A common stock as temporary equity and
recognizes accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480.
As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This
resulted in an adjustment to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A common stock. The
Company will present this revision in a prospective manner in all future filings. Under this approach, the previously issued Initial Public Offering Balance Sheet and Form 10-Q’s will not be amended, but historical amounts presented in the current
and future filings will be recast to be consistent with the current presentation, and an explanatory footnote will be provided.
In connection with the change in presentation for the Class A common stock subject to redemption, the Company also revised
its income (loss) per common share calculation to allocate net income (loss) evenly to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stock
share pro rata in the income (loss) of the Company.
There has been no change in the Company’s total assets, liabilities or operating results.
The impact of the revision on the Company’s financial statements is reflected in the following table.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of
the “SEC”. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.
Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial
statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements
should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 as filed with the SEC on June 22, 2021. The interim results for the three and nine months ended September 30, 2021 are not
necessarily indicative of the results to be expected for the period ending December 31, 2021.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in
Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of
securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the
requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has
different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the
Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used.
Use of Estimates
The preparation of condensed financial statements in
conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its
estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant
liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an
original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of September 30, 2021 and December 31, 2020.
Marketable Securities Held in Trust Account
At September 30, 2021, the assets held in the Trust Account were held in U.S. Treasury Bills and money market funds which
primarily invest in U.S. Treasury Bills. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period.
Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed statements of operations. The estimated
fair values of investments held in Trust Account are determined using available market information.
Warrant Liabilities
The Company accounts for the Warrants in accordance with
the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies 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. The Private Placement Warrants
and the Public Warrants for periods where no observable traded price was available are valued using a Monte Carlo simulation. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price
was used as the fair value as of each relevant date.
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument
and is 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 the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered to be
outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary deficit, outside of the stockholders’ equity
section of the Company’s balance sheet.
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by
charges against additional paid in capital and accumulated deficit.
At September
30, 2021, the Class A common shares reflected in the condensed balance sheets are reconciled in the following table:
Offering Costs
Offering
costs consisted of legal, accounting and other expenses incurred through the Initial Public Offering that w directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the
Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant liabilities were expensed as incurred in the statements of operations. Offering costs associated with the
Class A common stock issued were charged to temporary equity.
Income Taxes
The Company follows the asset and
liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. As of September 30, 2021 and December 31, 2020, the Company had deferred tax assets of $1,388,000 and $29,000, respectively, with a full valuation allowance recorded against them.
The Company’s currently taxable income
primarily consists of interest income on the Trust Account. The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. During the three and nine months ended September 30, 2021, the
Company recorded no income tax expense. The Company’s effective tax rate for the three and nine months ended September 30, 2021
and September 30, 2020 was zero, which differs from the expected income tax rate mainly due to the start-up costs (discussed
above) which are not currently deductible and permanent differences mainly due to the change in the fair value of the warrant liabilities.
ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained
upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of
September 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax
examinations by major taxing authorities since inception.
Net Income (Loss) per Common Share
Net income (loss) per common share is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding during the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 33,500,000 shares of Class A common
stock in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the
(i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase Class A ordinary shares in the aggregate. As of
September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net
loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.
The following table reflects the
calculation of basic and diluted net income per common share (in dollars, except share amounts):
Concentration of Credit Risk
Financial instruments that potentially subject the Company
to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities
which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximate the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature, except for the Warrant
Liability (see Note 9).
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standards Update (“ASU”) 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) (“ASU 2020-06”) to simplify accounting
for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance
pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU
2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective
basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
Management does not believe that any other recently issued,
but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.
|
INITIAL PUBLIC OFFERING |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
INITIAL PUBLIC OFFERING [Abstract] | |
INITIAL PUBLIC OFFERING |
NOTE 4. INITIAL
PUBLIC OFFERING
Pursuant to the
Initial Public Offering and the partial exercise by the underwriters of their over-allotment option, the Company sold 45,000,000
Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and
of one
redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock
at a price of $11.50 per share, subject to adjustment (see Note 8). |
PRIVATE PLACEMENT |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
PRIVATE PLACEMENT [Abstract] | |
PRIVATE PLACEMENT |
NOTE 5. PRIVATE
PLACEMENT
Simultaneously, on
October 6, 2020, with the closing of the Initial Public Offering and the underwriters’ partial exercise of their over-allotment option, the Sponsor and an affiliate of PJT Partners LP purchased an aggregate of 10,000,000 Private Placement Warrants at a price of $1.00
per Private Placement Warrant, for an aggregate purchase price of $10,000,000. Simultaneously with the closing of the partial
exercise by the underwriters of their over-allotment option, the Sponsor and an affiliate of PJT Partners LP purchased an aggregate of 1,000,000
additional Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $1,000,000. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note
9). The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period,
the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire
worthless.
|
RELATED PARTY TRANSACTIONS |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS |
NOTE 6. RELATED PARTY
TRANSACTIONS
Founder Shares
In August 2020, the
Sponsor purchased 10,062,500 of the Company’s Class B common stock (the “Founder Shares”) for an aggregate purchase price of $25,000. On August 27, 2020, the Company effected a stock dividend with respect to its Class B common stock of 1,437,500 Founder Shares, resulting in 11,500,000
Class B shares issued and outstanding. On September 11, 2020, the Company effected a reverse stock split of 1,437,500 Founder
Shares, resulting in the initial stockholders holding 10,062,500 Founder Shares. In September 2020, the Sponsor transferred an
aggregate of 25,000 Founder Shares to each of the Company’s Directors. On October 1, 2020, the Company effected a stock dividend of
1,437,500 shares with respect to the Founder Shares, resulting in an aggregate of 11,500,000 Founder Shares issued and outstanding. All share and per-share amounts have been retroactively restated to reflect the stock transactions. The Founder Shares
included an aggregate of up to 1,500,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment was not
exercised in full or in part, so that the number of Founder Shares would equal, on an as-converted basis, approximately 20% of the
Company’s issued and outstanding common stock after the Initial Public Offering. As a result of the underwriters’ election to partially exercise their over-allotment option on October 15, 2020, a total of 1,250,000 Founder Shares are no longer subject to forfeiture and 250,000 Founder Shares were forfeited, resulting in an aggregate of 11,250,000 Founder Shares
issued and outstanding.
The Sponsor has
agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the
last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock
capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150
days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Public Stockholders having the right to exchange their
shares of common stock for cash, securities or other property.
Administrative
Services Agreement
The Company entered
into an agreement, commencing on October 1, 2020, to pay the Sponsor up to $10,000 per month for office space, secretarial and
administrative support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For period the three and nine months ended September 30, 2021, the Company incurred and paid
approximately $30,000 and $90,735, respectively, in fees for these services. For the period from July 30, 2020 (inception) through September 30, 2020, the Company
did not incur any fees for these services.
Promissory Note —
Related Party
On August 19, 2021, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount of $2,000,000. The Promissory Note is non-interest bearing and payable on the consummation of the merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses. The amount outstanding under the Promissory Note as of September 30,
2021 is $1,000,000.
Related Party Loans
In order to finance
transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $2,000,000 of the notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the
Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of September 30, 2021 and December 31, 2020,
there no amounts outstanding under the Working Capital Loans, respectively.
|
COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
NOTE 7. COMMITMENTS
AND CONTINGENCIES
Risks and
Uncertainties
Management continues
to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target
company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
Pursuant to a
registration rights agreement entered into on October 6, 2020, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon
the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring the Company to register such securities
for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights
agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company
will bear the expenses incurred in connection with the filing of any such registration statements.
Business Combination Agreement
On April 23, 2021, the Company, entered into a Business Combination
Agreement (the “Business Combination Agreement”) with SGHC Limited, a non-cellular company limited by shares incorporated under the laws of the Island of Guernsey (“SGHC Limited”),
Super Group (SGHC) Limited, a non-cellular company limited by shares incorporated under the laws of the Island of Guernsey (“NewCo”), Super Group (SGHC) Merger Sub, Inc., a Delaware
corporation and a wholly-owned subsidiary of NewCo (“Merger Sub” and, together with NewCo, SGHC Limited and SGHC Limited’s direct and indirect subsidiaries, the “Target Companies”), and the Sponsor.
Pursuant to the Business Combination Agreement, subject to the terms
and conditions therein, prior to the closing of the Business Combination (the “Closing”), SGHC Limited will undergo a pre-closing reorganization (the “Reorganization”) wherein all existing shares of SGHC Limited will be exchanged for newly issued common stock of NewCo (“NewCo Common Shares”). Following the Reorganization, the shareholders of SGHC Limited (the “Pre-Closing Holders”) will hold that number of NewCo Common
Shares equal to the quotient obtained by dividing (i) 4,750,000,000, plus the amount by which the cash and cash
equivalent balance of the Target Companies exceeds $300,000,000 (but in no event in excess of $4,850,000,000), less the amount by which the cash and cash equivalent balance of the Target Companies is less than $300,000,000, by (ii) $10.00
(the “Aggregate Stock Consideration Shares”).
In addition, the Pre-Closing Holders will be entitled to a right to
receive additional contingent consideration based on the number of shares held after taking into account those shares sold pursuant to Repurchase Agreements in the form of three potential earn-out payments.
The Business Combination Agreement contains customary representations, warranties and
covenants by the parties thereto and the Closing is subject to certain conditions as further described in the Business Combination Agreement.
Underwriting Agreement
The underwriters are
entitled to a deferred fee of $0.35 per Unit, or $15,750,000 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.
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STOCKHOLDERS' EQUITY |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY |
NOTE 8. STOCKHOLDERS’
EQUITY
Preferred Stock — The
Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from
time to time by the Company’s board of directors. As of September 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock — The Company is
authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote
for each share. At September 30, 2021 and December 31, 2020, there were 45,000,000 Class A common shares issued
and outstanding, including 45,000,000 Class A common shares subject to possible redemption which are presented as temporary
equity.
Class B Common Stock — The Company is
authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote
for each share. As of September 30, 2021 and December 31, 2020, there were 11,250,000 shares of Class B common stock issued
and outstanding.
Only holders of the
Class B common stock will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted
to a vote of our shareholders except as otherwise required by law.
The shares of Class B
common stock will automatically convert into Class A common stock at the time of a Business Combination, or earlier at the option of the holder, on a one-for-one
basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a
Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the then-outstanding shares of Class B common stock agree to waive
such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of Initial Public Offering plus all shares of Class
A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (net of the number of shares of Class A common stock redeemed in connection with a Business Combination), excluding any shares or
equity-linked securities issued or issuable to any seller in a Business Combination.
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WARRANT LIABILITIES |
9 Months Ended | |||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||
WARRANT LIABILITIES [Abstract] | ||||||||||||||||||||||||||||
WARRANT LIABILITIES |
NOTE 9. WARRANT LIABILITIES
As of September 30,
2021 there were 22,500,000 Public Warrants and 11,000,000 Private Placement Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional warrants will
be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not
be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the
shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the Company satisfying its obligations with respect to
registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless
the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.
The Company has
agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, the
Company will use its commercially reasonable efforts to file, and within 60 business days following a Business Combination to have
declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the
warrants expire or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under
Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the
Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an
exemption is not available.
Redemptions of warrants when the price of Class A common stock equals or exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the Public Warrants:
If and when the
warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants when the price per share of Class common stock equals or exceeds $10.00 — Commencing ninety days after the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
If the Company calls
the Public Warrants for redemption, as described above, holders of Public Warrants may exercise their Warrants on a cashless basis (but not a cash basis), as described in the warrant agreement. The exercise price and number of common stock
issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, in no event will
the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants
will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants
may expire worthless.
The Private Placement
Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will
not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited
exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private
Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
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FAIR VALUE MEASUREMENTS |
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FAIR VALUE MEASUREMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS |
NOTE 10. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and
liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market
participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use
of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs
used in order to value the assets and liabilities:
At September 30, 2021, assets held in the Trust Account
were comprised of $450,122,927 in a Money Market Fund primarily in U.S. Treasury securities. At December 31, 2020, assets held in the
Trust Account were comprised of $93,912 in cash and $449,973,787 in U.S. Treasury securities. Through September 30, 2021, the Company did not
withdraw any interest income from the Trust Account.
The following table presents information about the Company’s assets that are
measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020. The gross holding gains and fair value of held-to-maturity securities at September 30, 2021 and December 31, 2020 are as follows:
The following table presents information about the Company’s assets and
liabilities that are measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
The Warrants were accounted for as liabilities in
accordance with ASC 815-40. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented in the condensed statements of operations.
The Private Placement Warrants were valued using a Monte
Carlo simulation model, which is considered to be a Level 3 fair value measurement. The Monte Carlo simulation model’s primary unobservable input utilized in determining the fair value of the Warrants is the expected volatility of the common
stock. The subsequent measurements of the Public Warrants after the detachment of the Public Warrants from the Units are classified as Level 1 due to the use of an observable market quote in an active market. For periods subsequent to the
detachment of the Public Warrants from the Units, the close price of the Public Warrant price will be used as the fair value as of each relevant date.
The following table presents the quantitative information
regarding Level 3 fair value measurements of the warrant liabilities:
The following table
presents the changes in the fair value of Level 3 warrant liabilities:
Transfers to/from Levels 1, 2 and 3 are
recognized at the end of the reporting period. There were no transfers in or out of Level 3 from other levels in the fair value
hierarchy during the three and nine months ended September 30, 2021.
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SUBSEQUENT EVENTS |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS |
NOTE 11. SUBSEQUENT
EVENTS
The Company evaluated
subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have
required adjustment or disclosure in the condensed financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
Basis of Presentation
The accompanying unaudited condensed financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of
the “SEC”. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.
Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial
statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements
should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 as filed with the SEC on June 22, 2021. The interim results for the three and nine months ended September 30, 2021 are not
necessarily indicative of the results to be expected for the period ending December 31, 2021.
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Use of Estimates |
Use of Estimates
The preparation of condensed financial statements in
conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its
estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant
liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
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Cash and Cash Equivalents |
Cash and Cash Equivalents
The Company considers all short-term investments with an
original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of September 30, 2021 and December 31, 2020.
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Marketable Securities Held in Trust Account |
Marketable Securities Held in Trust Account
At September 30, 2021, the assets held in the Trust Account were held in U.S. Treasury Bills and money market funds which
primarily invest in U.S. Treasury Bills. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period.
Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed statements of operations. The estimated
fair values of investments held in Trust Account are determined using available market information.
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Warrant Liabilities |
Warrant Liabilities
The Company accounts for the Warrants in accordance with
the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies 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. The Private Placement Warrants
and the Public Warrants for periods where no observable traded price was available are valued using a Monte Carlo simulation. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price
was used as the fair value as of each relevant date.
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Class A Common Stock Subject to Possible Redemption |
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument
and is 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 the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered to be
outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary deficit, outside of the stockholders’ equity
section of the Company’s balance sheet.
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by
charges against additional paid in capital and accumulated deficit.
At September
30, 2021, the Class A common shares reflected in the condensed balance sheets are reconciled in the following table:
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Offering Costs |
Offering Costs
Offering
costs consisted of legal, accounting and other expenses incurred through the Initial Public Offering that w directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the
Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant liabilities were expensed as incurred in the statements of operations. Offering costs associated with the
Class A common stock issued were charged to temporary equity.
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Income Taxes |
Income Taxes
The Company follows the asset and
liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. As of September 30, 2021 and December 31, 2020, the Company had deferred tax assets of $1,388,000 and $29,000, respectively, with a full valuation allowance recorded against them.
The Company’s currently taxable income
primarily consists of interest income on the Trust Account. The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. During the three and nine months ended September 30, 2021, the
Company recorded no income tax expense. The Company’s effective tax rate for the three and nine months ended September 30, 2021
and September 30, 2020 was zero, which differs from the expected income tax rate mainly due to the start-up costs (discussed
above) which are not currently deductible and permanent differences mainly due to the change in the fair value of the warrant liabilities.
ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained
upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of
September 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax
examinations by major taxing authorities since inception.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) per Common Share |
Net Income (Loss) per Common Share
Net income (loss) per common share is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding during the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 33,500,000 shares of Class A common
stock in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the
(i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase Class A ordinary shares in the aggregate. As of
September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net
loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.
The following table reflects the
calculation of basic and diluted net income per common share (in dollars, except share amounts):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Credit Risk |
Concentration of Credit Risk
Financial instruments that potentially subject the Company
to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account.
|
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Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities
which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximate the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature, except for the Warrant
Liability (see Note 9).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Standards |
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standards Update (“ASU”) 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) (“ASU 2020-06”) to simplify accounting
for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance
pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU
2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective
basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
Management does not believe that any other recently issued,
but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.
|
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of Revision Financial Statements |
The impact of the revision on the Company’s financial statements is reflected in the following table.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Class A Common Stock Subject to Possible Redemption |
At September
30, 2021, the Class A common shares reflected in the condensed balance sheets are reconciled in the following table:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Income Per Common Share |
The following table reflects the
calculation of basic and diluted net income per common share (in dollars, except share amounts):
|
FAIR VALUE MEASUREMENTS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Holding Gains and Fair Value of Held-to-Maturity Securities |
The following table presents information about the Company’s assets that are
measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020. The gross holding gains and fair value of held-to-maturity securities at September 30, 2021 and December 31, 2020 are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following table presents information about the Company’s assets and
liabilities that are measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level 3 Fair Value Measurements of Warrant Liabilities |
The following table presents the quantitative information
regarding Level 3 fair value measurements of the warrant liabilities:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Fair Value of Level 3 Warrant Liabilities |
The following table
presents the changes in the fair value of Level 3 warrant liabilities:
|
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS, Liquidity and Capital Resources (Details) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Liquidity and Capital Resources [Abstract] | ||
Operating bank account | $ 49,561 | $ 1,087,876 |
Promissory note - related party | 1,000,000 | 0 |
Sponsor [Member] | ||
Liquidity and Capital Resources [Abstract] | ||
Operating bank account | 49,561 | |
Working capital | (5,300,000) | |
Sponsor [Member] | Working Capital Loans [Member] | ||
Liquidity and Capital Resources [Abstract] | ||
Related party outstanding amount | 0 | $ 0 |
Sponsor [Member] | Promissory Note [Member] | ||
Liquidity and Capital Resources [Abstract] | ||
Promissory note - related party | $ 1,000,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Cash and Cash Equivalents [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Income Taxes [Abstract] | |||
Deferred tax assets | $ 1,388,000 | $ 1,388,000 | $ 29,000 |
Income tax expense | $ 0 | $ 0 | |
Effective tax rate | 0.00% | 0.00% | |
Unrecognized tax benefits | $ 0 | $ 0 | 0 |
Accrued interest and penalties | $ 0 | $ 0 | $ 0 |
PRIVATE PLACEMENT (Details) - Private Placement Warrant [Member] - USD ($) |
Oct. 15, 2020 |
Oct. 06, 2020 |
Sep. 30, 2021 |
---|---|---|---|
Private Placement Warrants [Abstract] | |||
Warrants issued (in shares) | 10,000,000 | ||
Share price (in dollars per share) | $ 1.00 | ||
Gross proceeds from issuance of warrants | $ 10,000,000 | ||
Class A Common Stock [Member] | |||
Private Placement Warrants [Abstract] | |||
Number of securities called by each warrant (in shares) | 1 | ||
Warrants exercise price (in dollars per share) | $ 11.50 | ||
Over-Allotment Option [Member] | |||
Private Placement Warrants [Abstract] | |||
Warrants issued (in shares) | 1,000,000 | ||
Share price (in dollars per share) | $ 1.00 | ||
Gross proceeds from issuance of warrants | $ 1,000,000 |
FAIR VALUE MEASUREMENTS, Assets Held in Trust Account (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Assets [Abstract] | ||
Cash withdraw interest income from trust account | $ 0 | |
Cash [Member] | ||
Assets [Abstract] | ||
Assets held in trust account | $ 93,912 | |
Money Market Funds [Member] | ||
Assets [Abstract] | ||
Assets held in trust account | $ 450,122,927 | |
US Treasury Securities [Member] | ||
Assets [Abstract] | ||
Assets held in trust account | 449,973,787 | |
US Treasury Securities [Member] | Recurring [Member] | Level 1 [Member] | ||
Held-To-Maturity [Abstract] | ||
Amortized Cost | 449,973,787 | |
Gross Holding Gain | 3,713 | |
Fair Value | $ 449,977,500 | |
Maturity date | Feb. 04, 2021 |
FAIR VALUE MEASUREMENTS, Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring [Member] - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Level 1 [Member] | ||
Assets [Abstract] | ||
Money Market Fund | $ 450,122,927 | |
Level 1 [Member] | Public Warrants [Member] | ||
Liabilities [Abstract] | ||
Warrant Liability | 53,325,000 | $ 30,375,000 |
Level 3 [Member] | Private Placement Warrants [Member] | ||
Liabilities [Abstract] | ||
Warrant Liability | $ 26,070,000 | $ 14,850,000 |
FAIR VALUE MEASUREMENTS, Level 3 Fair Value Measurements of Warrant Liabilities (Details) |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value Measurements [Abstract] | ||
Term (in years) | 5 years | |
Warrant [Member] | ||
Fair Value Measurements [Abstract] | ||
Term (in years) | 5 years 4 months 13 days | 6 years 29 days |
Warrant [Member] | Stock Price [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 10.02 | 10.12 |
Warrant [Member] | Volatility [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.323 | 0.330 |
Warrant [Member] | Risk-Free Rate [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.01043 | 0.0052 |
Warrant [Member] | Dividend Yield [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.000 | 0.000 |
FAIR VALUE MEASUREMENTS, Changes in Fair Value of Level 3 Warrant Liabilities (Details) - USD ($) |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
|
Fair Value, Transfers [Abstract] | ||
Transfers out of Level 3 | $ 0 | $ 0 |
Transfers into Level 3 | 0 | 0 |
Private Placement Warrant [Member] | ||
Unobservable Input Reconciliation [Roll Forward] | ||
Fair value, beginning balance | 14,850,000 | |
Change in fair value | 11,220,000 | |
Fair value, ending balance | $ 26,070,000 | $ 26,070,000 |
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