NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company previously accounted for its outstanding Public Warrants, Private Placement Warrants and Private Placement Units (CAVU Private Placement Warrant) (as defined in Note 5) (collectively, with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of stock, all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement.

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

As a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.

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

The table below summarizes the effects of the restatement on the financial statements for all periods being restated:

	As Previously Reported			Adjustments			As Restated
Balance Sheet as of December 11, 2020
Warrant Liability	$	—		$	23,231,250		$	23,231,250
Class A Common Stock Subject to Possible Redemption		299,278,830			(23,231,250	)		276,047,580
Class A Common Stock		132			233			365
Additional Paid-in Capital		5,002,154			804,343			5,806,497
Accumulated Deficit		(3,000	)		(804,576	)		(807,576	)
Number of Class A common stock subject to possible redemption		29,927,883			(2,323,125	)		27,604,758

Balance Sheet as of December 31, 2020
Warrant Liability	$	—		$	31,607,000		$	31,607,000
Class A Common Stock Subject to Possible Redemption		299,192,200			(31,607,000	)		267,585,200
Common Stock		133			316			449
Additional Paid-in Capital		5,088,783			9,180,010			14,268,793
Accumulated Deficit		(89,630	)		(9,180,326	)		(9,269,956	)
Number of Class A common stock subject to possible redemption		29,919,220			(2,323,125	)		26,758,520

Statement of Operations for period from October 5, 2020 (inception) to December 31, 2020
Loss from operations	$	(97,659	)	$	—		$	(97,659	)
Interest earned on marketable securities held in Trust Account		8,029			—			8,029
Change in fair value of warrant liability		—			(8,375,750	)		(8,375,750	)
Transaction costs associated with warrant liability		—			(804,576	)		(804,576	)
Net loss	$	(89,630	)	$	(9,180,326	)	$	(9,269,956	)
Weighted average shares outstanding of Class A redeemable common stock		28,750,000			—			28,750,000
Basic and diluted net income per share, Class A redeemable common stock		0.00			—			0.00
Weighted average shares outstanding of Class A and Class B non-redeemable common stock		7,129,630			—			7,129,630
Basic and diluted net loss per share, Class A and Class B non-redeemable common stock		(0.01	)		(1.29	)		(1.30	)

Statement of Cash Flows for period from October 5, 2020 (inception) to December 31, 2020
Net loss	$	(89,630	)	$	(9,180,326	)	$	(9,269,956	)
Change in fair value of warrant liability		—			8,375,750			8,375,750
Transaction costs associated with Initial Public Offering		—			804,576			804,576
Initial classification of Class A common stock subject to redemption		299,278,830			(23,231,250	)		276,047,580
Change in value of Class A common stock subject to redemption		(86,630	)		(8,375,750	)		(8,462,380	)