Revision of Financial Statements

3 Months Ended

Mar. 31, 2021

Revision of Financial Statements

Revision of Financial Statements

Note 2 — Revision of Financial Statements

On April 12, 2021, the Staff 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, between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agreement”). As a result of the SEC Statement, the Company reevaluated the accounting treatment of (i) the 9,200,000 Public Warrants that were included in the Units issued by the Company in its IPO and (ii) the 5,213,333 Private Placement Warrants (see Note 4, Note 5 and Note 8). The Company previously accounted for the Warrants as components of equity.

In further consideration of the guidance in Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging; Contracts in Entity’s Own Equity, the Company concluded that a provision in the Warrant Agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants should be recorded as derivative liabilities on the Balance Sheet and measured at fair value at inception (on the date of the IPO) and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the statement of operations in the period of change.  In the Company’s 8-K dated February 18, 2021 the Company reported the value of the warrants in equity.

The Company’s management and the audit committee of the Company’s Board of Directors concluded that it is appropriate to revise the accounting of the Company’s Warrants.

The following tables summarize the effect had the financial statements been restated on each financial statement line item as of the date indicated:

w
	As Previously Reported		Adjustment		As restated
Balance Sheet at February 11, 2021
Warrant liability	$	—	$	18,028,933	$	18,028,933
Total Liabilities		11,007,558		18,028,933		29,036,491
Class A common stock subject to possible redemption,		263,240,750		(18,028,930)		245,211,820
Class A common stock		128		180		308
Additional paid-in capital		5,013,670		652,382		5,666,052
Accumulated deficit		(14,481)		(652,565)		(667,046)
Total Stockholders’ Equity	$	5,000,007	$	(3)	$	5,000,004