UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from to
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 3, 2021, there were
EXPLANATORY NOTE
BOA Acquisition Corp. (the “Company” or “we,” “our” or “us”) is filing this Amendment No. 1 to the Quarterly Report on Form 10-Q/A (“Amendment No. 1”), which amends the Quarterly Report on Form 10-Q as of and for the period ended September 30, 2021, as originally filed with the Securities and Exchange Commission (“SEC”) on November 5, 2021.
On November 5, 2021, the Company filed its Form 10-Q for the quarterly period ended September 30, 2021 (the “Q3 Form 10-Q”), which included a Note 2, Revision of Previously Issued Financial Statements, (“Note 2”) that described a revision to the Company’s classification of its Class A common stock previously classified as permanent equity as part of the units sold in the Company’s initial public offering (“IPO”) on February 26, 2021. As described in Note 2, upon its IPO, the Company classified a portion of the Class A common stock as permanent equity to maintain net tangible assets greater than $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001, as set forth in the Company’s Amended and Restated Certificate of Incorporation. The Company’s management re-evaluated the conclusion and determined that the Class A common stock included certain provisions that require the classification of the Class A common stock as temporary equity regardless of the minimum net tangible assets required to complete the Company’s initial business combination. As a result, management corrected the error by restating the classification of all Class A common stock to temporary 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.
In connection with the change in presentation for the Class A common stock, the Company also restated its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation differs from the previously presented method of earnings per share, which was similar to the two-class method.
The Company initially determined the changes were not qualitatively material to the Company’s previously issued financial statements and did not restate its financial statements. Instead, the Company revised its previously issued financial statements, as of and for the periods ended March 31, 2021 and June 30, 2021, in Note 2 to its Form 10-Q for the quarterly period ended September 30, 2021. Although the qualitative factors that management assessed tended to support a conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements and it was subsequently determined that the qualitative and quantitative factors support a conclusion that the misstatements are material on a quantitative basis. As a result, management concluded that the misstatement was of such magnitude that it is probable that the judgment of a reasonable person relying upon the financial statements would have been influenced by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A common stock previously classified within permanent equity and the change to its presentation of earnings per share is material quantitatively and it should restate its previously issued financial statements.
Therefore, on January 10, 2022, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously issued (i) audited balance sheet as of February 26, 2021 on Form 8-K (the “Audited Balance Sheet”), included in Form 8-K dated March 4, 2021, as previously restated in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 21, 2021 (the “Q1 Form 10-Q”), (ii) unaudited interim financial statements included in the Q1 Form 10-Q, (iii) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 4, 2021, and (iv) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 5, 2021 (collectively, the “Affected Prior Periods”), should be restated and should no longer be relied upon.
As part of the Company’s assessment of its Class A Common Stock Subject to Possible Redemption, the Company identified an error in its accounting for its Private Placement Warrants. This error was identified after the Company had issued its Form 8-K on January 13, 2022, that described the then forthcoming restatements under Item 4.02 “Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review”. The error resulted from the incorrect accounting for the excess fair value over the proceeds received from the Private Placement Warrants. This was originally accounted for within stockholders’ equity, but the excess should have been recognized as a loss on the condensed statement of operations.
i
As such, the Company is restating its unaudited interim financial statements previously included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 in this Form 10-Q/A, Amendment No. 1 to (i) correctly account for the excess fair value over proceeds received from the Private Placement Warrants, and (ii) remove the “Revision of Previously Issued Financial Statements” included in Note 2 as the Company has restated the unaudited interim financial information for the other Affected Prior Periods by previously filing Amendments to the originally filed Q1 Form 10-Q and Q2 Form 10-Q. See the Amendment No. 1 to the Form 10-Q as of and for the period ended March 31, 2021, and Amendment No. 1 to the Form 10-Q as of and for the period ended June 30, 2021 for a description of the restatement and impact on those unaudited interim financial statements.
The Company determined that none of the above changes will have any impact on its cash position and cash held in the trust account established in connection with the IPO.
After re-evaluation, the Company’s management concluded that in light of the errors described above, a material weakness existed in the Company’s internal control over financial reporting in analyzing complex financial instruments during the Affected Prior Periods and that the Company’s disclosure controls and procedures were not effective. This material weakness is additive to the material weakness previously identified and disclosed regarding the Company’s accounting for Warrants, which was disclosed in the Company’s Q1 Form 10-Q, Q2 Form 10-Q and Q3 Form 10-Q. The Company’s remediation plan with respect to such material weaknesses is described in more detail in Item 4 of Part I to this Quarterly Report on Form 10-Q/A.
The following items in this Form 10-Q/A have been amended as a result of this restatement:
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 4. Controls and Procedures
ii
BOA ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
iii
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BOA ACQUISITION CORP.
CONDENSED BALANCE SHEETS
(Unaudited)
| September 30, |
| December 31, | |||
2021 | 2020 | |||||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash | $ | | $ | | ||
Prepaid expenses |
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Total current assets | | | ||||
NONCURRENT ASSETS | ||||||
Cash held in trust account | | — | ||||
Other assets | | — | ||||
Deferred offering costs associated with initial public offering |
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Total noncurrent assets | | | ||||
TOTAL ASSETS | $ | | $ | | ||
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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CURRENT LIABILITIES | ||||||
Accounts payable | $ | | $ | | ||
Accrued deferred offering costs | — | | ||||
Franchise tax payable | | — | ||||
Total current liabilities | | | ||||
LONG-TERM LIABILITIES | ||||||
Deferred underwriting commissions |
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Derivative warrant liabilities | | — | ||||
Total liabilities |
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Commitments and Contingencies (Note 9) |
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Class A common stock subject to possible redemption; | | — | ||||
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STOCKHOLDERS’ EQUITY (DEFICIT) |
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Preferred stock, $ |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total Stockholders’ Equity (Deficit) |
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TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | | $ | | ||
The accompanying notes are an integral part of these condensed financial statements.
1
BOA ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended | Nine Months Ended | |||||
| September 30, 2021 |
| September 30, 2021 | |||
OPERATING EXPENSES | ||||||
General and administrative expenses | $ | $ | ||||
Franchise tax expense | ||||||
Total operating expenses | | | ||||
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OTHER INCOME (EXPENSE) |
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Interest earned on marketable securities held in Trust Account | ||||||
Interest earned on operating cash | ||||||
Underwriting discounts and offering costs attributed to derivative warrant liability | — | ( | ||||
Change in fair value of derivative warrant liability | ||||||
Total other income | ||||||
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INCOME BEFORE INCOME TAX | ||||||
Income tax expense (benefit) | — | — | ||||
NET INCOME | $ | $ | ||||
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Basic and diluted weighted average shares outstanding, Class A common stock |
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Basic and diluted net income per share, Class A common stock | ||||||
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Basic and diluted weighted average shares outstanding, Class B common stock |
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Basic and diluted net income per share, Class B common stock | ||||||
The accompanying notes are an integral part of these condensed financial statements.
2
BOA ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
Class B | Additional | Retained Earnings | Total | |||||||||||
Common Stock | Paid-in | (Accumulated | Stockholders’ | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit) |
| Equity (Deficit) | |||||
Balance—December 31, 2020 | | $ | | $ | | $ | ( | $ | | |||||
Remeasurement of Class A common stock subject to possible redemption |
| — | — |
| ( |
| ( |
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Net loss | — | — | — | ( | ( | |||||||||
Balance—March 31, 2021 | | $ | | $ | — | $ | ( | $ | ( | |||||
Net income | — | — | — | | ||||||||||
Balance—June 30, 2021 | $ | $ | — | $ | ( | $ | ( | |||||||
Net income | — | — | — | |||||||||||
Balance—September 30, 2021 | $ | $ | — | $ | ( | $ | ( | |||||||
The accompanying notes are an integral part of these condensed financial statements.
3
BOA ACQUISITION CORP.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
| Nine Months Ended | ||
September 30, 2021 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ | | |
Adjustments to reconcile net income to net cash used in operating activities: |
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Interest earned on marketable securities held in Trust Account | ( | ||
Underwriting discounts and offering costs attributed to warrant liability | | ||
Change in fair value of warrant liability | ( | ||
Changes in operating assets and liabilities: |
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Prepaid expenses and other assets | ( | ||
Accounts payable and accrued expenses |
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Franchise tax payable | | ||
Net cash used in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES | |||
Investment of cash in Trust Account | ( | ||
Net cash used in investing activities | ( | ||
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CASH FLOW FROM FINANCING ACTIVITIES |
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Proceeds from sale of Units, net of underwriting discounts paid | | ||
Proceeds from sale of Private Placement Warrants | | ||
Net cash provided by financing activities |
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NET CHANGE IN CASH |
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CASH, BEGINNING OF PERIOD |
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CASH, END OF PERIOD | $ | | |
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SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES |
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Initial classification of derivative warrant liability | $ | | |
Initial classification value of common stock subject to possible redemption | $ | | |
Remeasurement of Class A common stock subject to possible redemption | $ | | |
Deferred underwriting fees charged to additional paid-in capital | $ | | |
The accompanying notes are an integral part of these condensed financial statements.
4
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Organization and Operations
BOA Acquisition Corp. (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 an early stage and emerging growth company as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, 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 through September 30, 2021 relates to the Company’s formation, its Initial Public Offering (the “IPO”) and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash from the proceeds derived from the IPO (see below for more information on the IPO), and recognizes changes in the fair value of warrant liabilities as other income (expense).
Corporate Organization and Initial Public Offering
The Company was incorporated in Delaware on October 26, 2020. The Company’s sponsor is Bet on America LLC, a Delaware limited liability company (the “Sponsor”).
On February 26, 2021, the Company consummated its IPO of
Public Warrants
Each Unit consists of
No fractional shares will be issued upon separation of the Units and only whole Public Warrants will trade. Each Public Warrant will become exercisable on the later of
5
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
the closing of the Initial Public Offering and will expire
Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants in whole and not in part at a price of $
Private Placement Warrants
Simultaneously with the closing of the IPO, the Company consummated a private sale (the “Private Placement”) of
Transaction Costs
Transaction costs amounted to $
The Trust Account
Following the closing of the IPO, $
Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, the proceeds from the IPO and the Private Placement will not be released from the Trust Account until the earlier of: (i) the completion of the Company’s Initial Business Combination; (ii) the redemption of any shares of the Public Shares that have been properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem
6
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds of the IPO are intended to be generally applied toward consummating an initial Business Combination. The initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least
The Company, after signing a definitive agreement for an initial Business Combination, will either (i) seek stockholder approval of the initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the initial Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes, or (ii) provide stockholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes. The decision as to whether the Company will seek stockholder approval of the initial Business Combination or will allow stockholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under New York Stock Exchange rules. If the Company seeks stockholder approval, it will complete its initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $
If the Company holds a stockholder vote or there is a tender offer for shares in connection with an initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes.
Pursuant to the Company’s amended and restated certificate of incorporation, if the Company is unable to complete the initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten 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 the Company to pay the Company’s taxes (less $
7
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
The Sponsor and the Company’s directors, director nominees and officers have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (as defined below) (see Note 6, Related Party Transactions, for more information) held by them if the Company fails to complete an initial Business Combination within the Combination Period. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquires shares of Class A common stock in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the initial Business Combination within the Combination Period.
Separate trading of Class A common shares and Public Warrants
On March 31, 2021, the Company announced that, commencing March 31, 2021, the holders of the Company’s Units may elect to separately trade the Class A common stock and Public Warrants comprising the Units. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Those units not separated will continue to trade on the New York Stock Exchange under the symbol “BOAS.U,” and each of the shares of Class A common stock and Public Warrants that are separated will trade on the New York Stock Exchange under the symbols “BOAS” and “BOAS WS,” respectively.
8
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
In connection with the preparation of the Company’s financial statements as of September 30, 2021, the Company’s management re-evaluated the Company’s application of ASC 480-10-S99 to its accounting classification of its Class A common stock subject to possible redemption issued as part of the units sold in the Company’s IPO on February 26, 2021. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Class A common stock in permanent equity, or total stockholders’ equity, due to the Company’s requirement to maintain at least $
The Company initially determined these changes were not qualitatively material to the Company’s previously issued financial statements. Instead, the Company revised its previously issued financial statements in Note 2 to its Form 10-Q for the quarterly period ended September 30, 2021. Although the qualitative factors that management assessed tended to support a conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements and it was subsequently determined that the qualitative and quantitative factors support a conclusion that the misstatements are material on a quantitative basis. As a result, the Company determined that the misstatement was of such magnitude that it is probable that the judgment of a reasonable person relying on the financial statements would have been influenced by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A common stock previously classified within permanent equity and the change to its presentation of earnings per share is material quantitatively and it should restate its previously issued financial statements.
As a result, the Company is restating its unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 in this Form 10-Q/A, Amendment No. 1 (the “Amended Q3 Form 10-Q”) to remove the “Revision of Previously Issued Financial Statements” included in Note 2 as the Company is refiling the unaudited interim financial statements for those periods affected. See the Amendment No. 1 to the Form 10-Q as of and for the period ended March 31, 2021, and Amendment No. 1 to the Form 10-Q as of and for the period ended June 30, 2021 for a description of the restatement and impact on those unaudited interim financial statements.
The Company included Note 10, Class A Common Stock Subject to Possible Redemption, in its restated Notes to Condensed Financial Statements that describes the number of Class A shares that are subject to possible redemption, and also provides a reconciliation of the gross IPO proceeds to the Class A common stock subject to possible redemption as of the date of the condensed balance sheet.
As part of the Company’s assessment of its Class A Common Stock Subject to Possible Redemption, the Company identified an additional error in its accounting for its Private Placement Warrants. When the fair value of the warrants at the date of issuance is in excess of the proceeds received, the difference is recorded as a loss as of the date of issuance. As a result, the Company recognized a $
Further, this Amendment No. 1 on Form 10-Q/A for the quarterly period ended September 30, 2021 includes minor formatting, wording and grammar changes to the condensed financial statements and Notes to Condensed Financial Statements.
9
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
Impact
As described above, the Company is restating its unaudited interim financial statements included in the Amended Q3 Form 10-Q to remove the “Revision of Previously Issued Financial Statements” included in Note 2 as the Company restated the unaudited interim financial statements for the affected prior periods for the changes described above. See the Amendment No. 1 to the Form 10-Q as of and for the period ended March 31, 2021, and Amendment No. 1 to the Form 10-Q as of and for the period ended June 30, 2021 for a description of the restatement and impact on those unaudited interim financial statements.
Regarding the loss that resulted from the difference between the Private Placement Warrants’ fair value and proceeds received, the Company evaluated this correction in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” and has determined that the related impact was material to the Affected Periods that contained the error. Therefore, the Company, in consultation with its Audit Committee, concluded that the Affected Period should be restated to correct the accounting of the Company’s Private Placement Warrants upon issuance. As such, the Company is reporting these restatements to the Affected Period in this quarterly report.
The following table summarizes the effect of this restatement on the Company’s financial statements for the Affected Period:
Correction of the | |||||||||
Error in accounting | |||||||||
For the Private | |||||||||
Statement of Operations for the nine months ended September 30, 2021 (unaudited) |
| As previously reported |
| Placement Warrants |
| As Restated | |||
Change in fair value of derivative warrant liabilities | $ | | $ | ( | $ | | |||
Net income | $ | | $ | ( | $ | | |||
Basic and diluted Class A net income (loss) per share | | ( | | ||||||
Basic and diluted Class B net income (loss) per share | | ( | | ||||||
Correction of the | |||||||||
Error in accounting | |||||||||
For the Private | |||||||||
Statement of Changes in Stockholders’ Equity (Deficit) for the nine months ended September 30, 2021 (unaudited) |
| As previously reported |
| Placement Warrants |
| As Restated | |||
Remeasurement of Class A common stock subject to possible redemption | $ | ( | $ | | $ | ( | |||
Net loss for the three months ended March 31, 2021 | $ | ( | $ | ( | $ | ( | |||
Correction of the | |||||||||
Error in accounting | |||||||||
For the Private | |||||||||
Statement of Cash Flows for the nine months ended September 30, 2021 (unaudited) |
| As previously reported |
| Placement Warrants |
| As Restated | |||
Net income | $ | | $ | ( | $ | | |||
Change in fair value of derivative warrant liabilities | $ | ( | $ | | $ | ( | |||
10
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim 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 should be read in conjunction with the Company’s final prospectus as filed with the SEC on February 17, 2021. Accordingly, certain disclosures required by GAAP and normally included in Annual Reports on Form 10-K have been condensed or omitted from this report; however, except as disclosed herein, there has been no material change in the information disclosed in the notes to condensed financial statements included in the Company’s 2020 financial statements.
It is the opinion of management that all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. The Company has no items of other comprehensive income or loss; therefore, its net income or loss is identical to its comprehensive income or loss. Operating results for the periods presented are not necessarily indicative of expected results for the full year or for any future interim periods.
Use of Estimates
In the course of preparing the condensed financial statements, management makes various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, income and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events. Although management believes these estimates are reasonable, actual results could differ from these estimates.
Estimates made in preparing these condensed financial statements include, among other things, (1) the measurement of derivative warrant liabilities and (2) accrued expenses. Changes in these estimates and assumptions could have a significant impact on results in future periods.
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.
Cash Held in Trust Account
At September 30, 2021, the Company had $
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Certain financial assets and liabilities, such as the derivative warrant liability, are measured at fair value on a recurring basis. Nonfinancial assets and liabilities, if any, are recognized at fair value on a nonrecurring basis.
The Company categorizes the inputs to the fair value of its financial assets and liabilities using a three-tier fair value hierarchy, established by the Financial Accounting Standards Board (“FASB”), that prioritizes the significant inputs used in measuring fair value. These levels are:
11
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
Level 1—inputs are based on unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Examples of Level 1 inputs include financial instruments such as exchange-traded derivatives, listed securities and U.S. government treasury securities.
Level 2— inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Examples of Level 2 inputs include nonexchange-traded derivatives such as over-the-counter forwards, swaps and options.
Level 3—inputs that are generally unobservable from objective sources and typically reflect management’s estimates and assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.
Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash held in Trust Account. The Company’s Trust Account is maintained with a high-quality financial institution, with the compositions and maturities of the Trust Account’s investments are regularly monitored by management.
Derivative Warrant Liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
12
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
The Company further evaluated the Public Warrants and Private Placement Warrants (collectively, the “Warrants”, which are discussed in Note 4, Note 5, and Note 6) in accordance with ASC 815-40 and concluded that a provision in the Warrant Agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as a component of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants were measured at fair value at inception (on the date of the IPO) and recorded as derivative warrant liabilities on the condensed balance sheets. The Warrants are subject to remeasurement at each reporting date until exercised or expiration in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized on the statements of operations in the period of change. Subsequent to becoming publicly traded on March 31, 2021, the fair value of the Public Warrants was determined based on their quoted trading price. Prior to being publicly traded, the fair value of the Public Warrants was estimated using a Monte Carlo simulation approach, while the fair value of the Private Placement Warrants was estimated using a Black-Scholes option pricing model (see Note 4, Fair Value Measurements, for more information).
Allocation of Issuance Costs
The Company accounts for the allocation of its issuance costs to its Warrants using the guidance in ASC 470-20, applied by analogy. Under this guidance, if debt or stock is issued with detachable warrants, the proceeds need to be allocated to the two instruments using either the fair value method, the relative fair value method, or the residual value method. The guidance also requires companies to use a consistent approach in allocating issuance costs between the instruments. Accordingly, the Company allocated its issuance costs of $
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 ASC 480. Shares of Class A common stock subject to mandatory redemption (if any) 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 features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021,
Recently Issued Accounting Standards
In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The new standard is effective for the Company on January 1, 2024, although early adoption is permitted. The ASU allows the use of the modified retrospective method or the fully retrospective method. The Company is still in the process of
13
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
evaluating the impact of this new standard; however, the Company does not believe the initial impact of adopting the standard will result in any changes to the Company’s statements of financial position, operations or cash flows.
NOTE 4 — FAIR VALUE MEASUREMENTS
Financial Assets and Liabilities Measured on a Recurring Basis
Certain assets and liabilities are reported at fair value on a recurring basis. These assets and liabilities include the investments held in Trust Account, and derivative warrant liabilities.
Fair Value Measured as of September 30, 2021 | |||||||||
| Level 1 |
| Level 2 |
| Level 3 | ||||
Assets: | |||||||||
Investments held in Trust Account (1) |
|
|
|
|
| ||||
$ | | $ | — | $ | — | ||||
Liabilities: | |||||||||
Derivative warrant liabilities - Public Warrants (2) | $ | | $ | — | $ | — | |||
Derivative warrant liabilities - Private Placement Warrants (3) | $ | — | $ | — | $ | | |||
| (1) | The fair value of the investments held in Trust Account was based on the quoted market price. |
| (2) | The fair value of the derivative warrant liabilities – Public Warrants was based on the quoted market price for BOAS WS as of the reporting date. |
| (3) | The fair value of the derivative warrant liabilities – Private Placement Warrants was based on a Black-Scholes model. |
Investments held in Trust Account. At September 30, 2021, the investments held in Trust Account were entirely comprised of U.S. Treasury Bills. During the three and nine months ended September 30, 2021, the Company did not withdraw any interest income from the Trust Account.
Derivative Warrant Liabilities. The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within derivative warrant liabilities on the condensed balance sheets. The derivative warrant liabilities were measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed statements of operations.
Initial Measurement
The estimated fair value of the Public Warrants and the Private Placement Warrants on February 26, 2021 was estimated using a Monte Carlo simulation and a Black-Scholes option pricing model, respectively. At their initial measurement, the Warrants were classified as Level 3 inputs due to the use of unobservable inputs.
14
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
The following table presents information and assumptions used to determine the estimated fair values of the Warrants using the pricing models:
| Initial Measurement | |||
Strike price | $ | | ||
Term (in years) | | |||
Risk-free rate | | % | ||
Volatility | | % | ||
Dividend yield | | % | ||
Fair value of Public Warrants | $ | | ||
Fair value of Private Placement Warrants | $ | | ||
Subsequent Measurement
The Warrants are measured at fair value on a recurring basis. The subsequent measurement of the Public Warrants as of September 30, 2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker BOAS WS. The fair value of the Private Warrants continues to be estimated using a Black-Scholes option pricing model and is classified as Level 3 due to the use of unobservable inputs.
The following table presents information and assumptions used in the Black-Scholes option pricing model to determine the estimated fair value of the Private Placement Warrants as of September 30, 2021:
As of |
| |||
| September 30, 2021 |
| ||
Strike price | $ | | ||
Term (in years) | | |||
Risk-free rate | | % | ||
Volatility | | % | ||
Dividend yield | | % | ||
Fair value of Private Placement Warrants | $ | | ||
The following contains additional information regarding the inputs used in the pricing models:
| ● | Term – the expected life of the warrants was assumed to be equivalent to their remaining contractual term. |
| ● | Risk-free rate – the risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal to the remaining expected life of the Warrants. |
| ● | Volatility – the Company estimated the volatility of its common stock warrants based on implied volatility and actual historical volatility of a group of comparable publicly traded companies observed over a historical period equal to the expected remaining life of the Warrants. |
| ● | Dividend yield – the dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the Private Placement Warrants. |
Due to the use of quoted prices in an active market (Level 1) to measure the fair values of the Public Warrants subsequent to March 31, 2021, the Company had transfers out of Level 3 totaling $
15
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
The change in fair value of the derivative warrant liabilities, net of expense related to the initial fair value of the Private Warrants in excess of proceeds received, through September 30, 2021 is as follows:
Private Placement | Total Derivative | ||||||||
| Public Warrants |
| Warrants |
| Warrant Liability | ||||
Derivative warrant liabilities at December 31, 2020 | $ | | $ | | $ | | |||
Issuance of Public and Private Warrants |
| |
| |
| | |||
Change in fair value of warrant liabilities | | | | ||||||
Derivative warrant liabilities at March 31, 2021 | $ | | $ | | $ | | |||
Issuance of Public and Private Warrants | — | — | — | ||||||
Change in fair value of warrant liabilities | ( | ( | ( | ||||||
Derivative warrant liabilities at June 30, 2021 | $ | | $ | | $ | | |||
Issuance of Public and Private Warrants | — | — | — | ||||||
Change in fair value of warrant liabilities | ( | ( | ( | ||||||
Derivative warrant liabilities at September 30, 2021 | $ | | $ | | $ | | |||
Fair Value of Other Financial Instruments
The carrying value of cash and accounts payable are considered to be representative of their respective fair values due to the nature of and short-term maturities of those instruments.
NOTE 5 — STOCKHOLDERS’ EQUITY (DEFICT)
Preferred Stock — The Company is authorized to issue
Class A Common Stock — The Company is authorized to issue
If the Company enters into an initial Business Combination, it may (depending on the terms of such an initial Business Combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on the initial Business Combination to the extent the Company seeks stockholder approval in connection with the initial Business Combination.
In addition,
16
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
Class B Common Stock — The Company is authorized to issue
Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of the stockholders, except as required by law.
The Sponsor, the Company’s officers and directors entered into a letter agreement with the Company, pursuant to which they agreed (i) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of the initial Business Combination, (ii) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve an amendment to the Company’s certificate of incorporation and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to their Public Shares if the Company fails to complete the initial Business Combination within such time period.
Warrant Liabilities — Public Warrants may only be exercised for a whole number of shares. The Public Warrants will become exercisable on the later of (a)
The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the IPO, 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 salable until
The Company may redeem the Public Warrants (except with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | at any time during the exercise period; |
| ● | upon a minimum of |
17
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
| ● | if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $ |
| ● | If, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. |
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
NOTE 6 — RELATED PARTY TRANSACTIONS
Founder Shares
On December 31, 2020, the Sponsor purchased
The Founder Shares are identical to the Class A common stock included in the Units being sold in the IPO except that the Founder Shares automatically convert into shares of Class A common stock at the time of the Company’s initial Business Combination, on a one-for-one basis, subject to adjustments pursuant to certain anti-dilution rights, and the Founder Shares are subject to certain transfer restrictions.
The Company’s initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $
Private Placement
As described in Note 1, Description of Organization and Business Operations, the Company sold Private Placement Warrants simultaneously with the closing of the IPO. Each whole Private Placement Warrant is exercisable for
18
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
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.
The Private Placement Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. The Private Placement Warrants are not transferrable, assignable or salable until
The excess fair value over the proceeds received for the Private Placement Warrants is recorded as a loss in the accompanying condensed statement of operations for the nine months ended September 30, 2021 within “Change in fair value of derivative warrant liability.”
Related Party Loan
The Company’s Sponsor agreed to loan the Company an aggregate of up to $
In order to finance transaction costs in connection with a Business Combination, the Sponsor, 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”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $
NOTE 7 — INCOME TAXES
The Company’s provision for income taxes for the three and nine months ended September 30, 2021 is based on the estimated annual effective tax rate, in addition to discrete items. As of September 30, 2021 and December 31, 2020, the Company has provided a valuation allowance against its net deferred tax assets that it believes, based on the weight of available evidence, are not more likely than not to be realized. Therefore, no material current tax liability or expense has been recorded in the condensed financial statements.
NOTE 8 — NET INCOME PER COMMON SHARE (As Restated)
The Company has two classes of shares, Class A common stock and Class B common stock. Net income per common share is computed by dividing net income, on a pro rata basis, by the weighted average number of common shares outstanding for the period. Remeasurement associated with the redeemable shares of Class A common stock is excluded from net income per common share as the redemption value approximates fair value.
The Company has not considered the effect of the warrants sold in the IPO and Private Placement to purchase
19
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
Reconciliation of Net Income per Common Share
The following table reflects the calculation of basic and diluted net income per common share:
Three Months | Nine Months | |||||||||||
| Ended |
| Ended | |||||||||
September 30, 2021 | September 30, 2021 | |||||||||||
Class A | Class B | Class A | Class B | |||||||||
Basic and diluted net income per share | ||||||||||||
Numerator | ||||||||||||
Allocation of net income | $ | | $ | | $ | | $ | | ||||
Denominator | ||||||||||||
Weighted-average shares outstanding | | | | | ||||||||
Basic and diluted net income per share | | | | | ||||||||
NOTE 9 — COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration rights agreement, dated February 23, 2021, 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 Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of 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 Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form 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 the 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. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were paid a cash underwriting discount of
20
BOA ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(As Restated)
NOTE 10 — CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated)
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 the occurrence of future events. As of September 30, 2021, there were
As of September 30, 2021, Class A common stock subject to possible redemption reflected on the condensed balance sheet is reconciled on the following table:
Gross Proceeds |
| $ | |
Less: |
|
| |
Offering costs and underwriting fees allocated to Class A common stock subject to possible redemption |
| ( | |
Proceeds allocated to Public Warrants at issuance | ( | ||
Plus: |
|
| |
Remeasurement of Class A common stock subject to possible redemption |
| | |
Class A common stock subject to possible redemption | $ | |
NOTE 11 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions through the date these financial statements were issued. The Company determined there were no events, other than those described in Note 2, that required disclosure or recognition in these condensed financial statements.
21
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to BOA Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “Sponsor” refer to Bet on America LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
In this Amendment No. 1 (“Amendment No. 1”) to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2021, we are restating our unaudited interim financial statements as of September 30, 2021. See Note 2 for additional information.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated as a Delaware corporation and 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. We intend to effectuate our initial business combination using cash from the proceeds of our IPO and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into in the future), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. All activity from our inception through the date of our IPO, February 26, 2021, was in preparation for our IPO. Since our IPO, our activity has been limited to the evaluation of Business Combination candidates. We do not expect to generate any operating revenues until the closing and completion of our Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering. We incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
22
For the three months ended September 30, 2021, we had a net income of $3,459,318, which was primarily due to a gain from the change in fair value of the derivative warrant liabilities of $3,948,341. This was partially offset by $442,514 in general and administrative expenses and $50,000 of franchise tax expense.
For the nine months ended September 30, 2021, we had a net income of $4,548,997, which was primarily driven by a gain from the change in fair value of the derivative warrant liabilities of $5,795,166. This was partially offset by $438,197 of issuance costs attributed to the warrant liability, $664,936 in general and administrative expenses and $150,000 of franchise tax expense.
As described in Note 3, Summary of Significant Accounting Policies, in “Part 1. Financial Information – Item 1. Financial Statements,” we classify the warrants issued in connection with our IPO and Private Placement as liabilities at their fair value, and adjust the derivative warrant liabilities to fair value at each reporting period. These liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations.
Liquidity and Capital Resources
Prior to the completion of the IPO, our liquidity needs were satisfied through receipt of $25,000 from the sale of Founder Shares to Bet on America LLC, or the “Sponsor”.
On February 26, 2021, we consummated the IPO of 23,000,000 Units at a price of $10.00 per Unit generating net proceeds of $217,111,865. Transaction costs were $12,888,135, including $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $238,135 of other offering costs in connection with the IPO. Simultaneously with the closing of the IPO, we consummated the sale of 6,575,000 Private Placement Warrants to our Sponsor at a price of $1.00 per warrant, generating gross proceeds of $6,575,000. Following the IPO and the sale of the Private Placement Warrants, a total of $230,000,000 was placed in a Trust Account.
For the nine months ended September 30, 2021, cash used in operating activities was $942,195. Net income of $4,548,997 was adjusted for the interest earned on marketable securities held in Trust Account of $6,946, the issuance costs attributed to the warrant liabilities of $438,197, and the non-cash change in fair value of the derivative warrant liabilities of $5,795,166. Additionally, changes in operating assets and liabilities provided $127,277 of cash used in operating activities.
As of September 30, 2021, we had cash and marketable securities in the Trust Account of $230,006,946. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions) to complete our initial Business Combination. We may withdraw interest from the trust account to pay franchise and income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of September 30, 2021, we had cash of $819,720 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies and/or finance transaction costs in connection with an initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period.
23
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Critical Accounting Policies
Our management makes a number of significant estimates, assumptions and judgments in the preparation of our financial statements. See Note 3, Summary of Significant Account Policies, in Part I. Financial Information – Item 1. Financial Statements for a discussion of the estimates and judgments necessary in our accounting for derivative warrant liabilities, common stock subject to possible redemption, and net income (loss) per common share. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in the notes to our condensed financial statements contained in this Amendment No.1 on Form 10-Q/A. The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the condensed financial statements. Management uses historical experience and all available information to make these estimates and judgments. Different amounts could be reported using different assumptions and estimates.
Recent Accounting Pronouncements
Please refer to Note 3, Summary of Significant Accounting Policies, in “Part 1. Financial Information – Item 1. Financial Statements” for a discussion of recent accounting pronouncements and their anticipated effect on our business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of September 30, 2021, we were not subject to any market or interest rate risk. Following the consummation of our IPO, the net proceeds of our IPO, including amounts in the Trust Account, have been invested in certain U.S. government securities with a maturity of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2021. Based upon their evaluation, and in light of the material weakness identified related to accounting for complex financial instruments, as described below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of September 30, 2021.
24
The Company’s management concluded that our control around the interpretation and accounting for certain complex features of the Class A common stock subject to redemption and warrants issued by the Company was not effectively designed or maintained. This material weakness resulted in the restatement of the Company’s interim financial statements for the quarter ended September 30, 2021. Additionally, this material weakness could result in a misstatement of complex accounting transactions, and related accounts and disclosures that would result in a material misstatement of the financial statements that would not be prevented or detected on a timely basis.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Remediation Plan
After identifying the material weakness, we have commenced our remediation efforts by taking the following steps:
| ● | We have expanded and improved our review process for complex securities and related accounting standards. |
| ● | We have increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. |
| ● | We have also retained the services of a valuation expert to assist in valuation analysis of the Warrants on a quarterly basis. |
| ● | We are establishing additional monitoring and oversight controls designed to ensure the accuracy and completeness of our financial statements and related disclosures. |
While we took considerable action to remediate the material weakness, such remediation has not been fully evidenced. We have expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we have expanded and will continue to improve these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In light of the material weakness discussed above, we plan to continue to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand complex accounting standards that apply to our financial statements.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our final prospectus filed with the SEC on February 25, 2021 and our Amendment No.1 on Form 10-Q/A for the quarter ended June 30, 2021. As of the date of this Report, there have been no material changes to the risk factors disclosed in our final prospectus filed with the SEC on February 25, 2021, except for those described in our Amendment No.1 on Form 10-Q/A for the quarter ended June 30, 2021.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
No. |
| Description of Exhibit |
| ||
31.1* |
| |
31.2* |
| |
32.1** |
| |
32.2** |
| |
101.INS* |
| Inline XBRL Instance Document |
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* |
| Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished.
27
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BOA ACQUISITION CORP. | |
|
|
|
Date: January 20, 2022 |
| /s/ Brian Friedman |
| Name: | Brian Friedman |
| Title: | Chief Executive Officer |
|
| (Principal Executive Officer) |
|
|
|
Date: January 20, 2022 |
| /s/ Benjamin A. Friedman |
| Name: | Benjamin A. Friedman |
| Title: | Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) |
28
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULE
13a-14(a) AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brian Friedman, certify that:
1. I have reviewed this Amendment No. 1 to the Quarterly Report on Form 10-Q/A of BOA 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 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [Omitted];
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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 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 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.
Dated: January 20, 2022 | /s/ Brian Friedman |
Brian Friedman | |
Chief Executive Officer | |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO EXCHANGE ACT RULE
13a-14(a) AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Benjamin A. Friedman, certify that:
1. I have reviewed this Amendment No. 1 to the Quarterly Report on Form 10-Q/A of BOA 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 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [Omitted];
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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 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 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.
Dated: January 20, 2022 | /s/ Benjamin A. Friedman |
Benjamin A. Friedman | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with Amendment No. 1 to the Quarterly Report of BOA Acquisition Corp. (the “Company”) on Form 10-Q/A for the quarterly period ended September 30, 2021, as filed with the Securities and Exchange Commission (the “Report”), I, Brian D. Friedman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
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.
Date: January 20, 2022 | ||
By: | /s/ Brian D. Friedman | |
Brian D. Friedman | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with Amendment No. 1 to the Quarterly Report of BOA Acquisition Corp. (the “Company”) on Form 10-Q/A for the quarterly period ended September 30, 2021, as filed with the Securities and Exchange Commission (the “Report”), I, Benjamin A. Friedman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
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.
Date: January 20, 2022 | ||
By: | /s/ Benjamin A. Friedman | |
Benjamin A. Friedman | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Preferred stock, par value (per share) | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Class A Common Stock | ||
| Common shares, par value (per share) | $ 0.0001 | $ 0.0001 |
| Common shares, shares authorized | 380,000,000 | 380,000,000 |
| Common shares, shares issued | 0 | 0 |
| Common shares, shares outstanding | 0 | 0 |
| Temporary equity, shares outstanding | 23,000,000 | 0 |
| Temporary equity, redemption value (per share) | $ 10.00 | $ 10.00 |
| Class B Common Stock | ||
| Common shares, par value (per share) | $ 0.0001 | $ 0.0001 |
| Common shares, shares authorized | 20,000,000 | 20,000,000 |
| Common shares, shares issued | 5,750,000 | 5,750,000 |
| Common shares, shares outstanding | 5,750,000 | 5,750,000 |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |
| DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Organization and Operations BOA Acquisition Corp. (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 an early stage and emerging growth company as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, 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 through September 30, 2021 relates to the Company’s formation, its Initial Public Offering (the “IPO”) and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash from the proceeds derived from the IPO (see below for more information on the IPO), and recognizes changes in the fair value of warrant liabilities as other income (expense). Corporate Organization and Initial Public Offering The Company was incorporated in Delaware on October 26, 2020. The Company’s sponsor is Bet on America LLC, a Delaware limited liability company (the “Sponsor”). On February 26, 2021, the Company consummated its IPO of 23,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit, raising $230,000,000 of gross proceeds. Of the 23,000,000 shares issued, 20,000,000 Units were included in the Company’s initial offering, and 3,000,000 Units resulted from the underwriter fully exercising its over-allotment option. The net proceeds of the IPO were $217,111,865, after deducting expenses and underwriting discounts and commissions of approximately $12,888,135, which includes $8,050,000 in deferred underwriting commissions (see Note 9, Commitments and Contingencies, for more information). Public Warrants Each Unit consists of one share of Class A common stock and of one redeemable warrant (each, a “Public Warrant” and, collectively, the “Public Warrants”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share. In addition, if (x) the Company issues additional shares of Class A common stock for capital raising purposes in connection with the closing of our Initial Business Combination at an issue or effective issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or their affiliates, without taking into account any shares of Class B common stock held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the amount that is the total equity proceeds (and interest thereon), available for the funding of the Initial Business Combination on the date of the consummation (net of redemptions) and (z) the volume-weighted average trading price of our Class A common stock during the 20-trading-day period starting on the trading day prior to the date on which the Company consummates its Initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the Public Warrants will be adjusted, to the nearest cent, to 115% of the higher of the Newly Issued Price and the Market Value, and the $18.00 per share redemption trigger price described below will be adjusted, to the nearest cent, to be equal to 180% of the higher of the Newly Issued Price and the Market Value. No fractional shares will be issued upon separation of the Units and only whole Public Warrants will trade. Each Public Warrant will become exercisable on the later of 30 days after the completion of the Company’s Initial Business Combination or 12 months from the closing of the Initial Public Offering and will expire five years after the completion of the Company’s Initial Business Combination or earlier upon redemption or liquidation. Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants in whole and not in part at a price of $0.01 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the trading day prior to the date on which the Company sends the notice of redemption to the Public Warrant holders. Private Placement Warrants Simultaneously with the closing of the IPO, the Company consummated a private sale (the “Private Placement”) of 6,575,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) to the Sponsor at a price of $1.00 per Private Placement Warrant, generating gross proceeds of approximately $6,575,000 (see Note 6, Related Party Transactions, for more information). The Private Placement Warrants are identical to the Warrants included in the Units sold in the IPO, except as otherwise disclosed in the Note 5, Stockholders’ Equity—Warrants. No underwriting discounts or commissions were paid with respect to such sale. Transaction Costs Transaction costs amounted to $12,888,135, consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting commissions, and $238,135 of other offering costs. The Trust Account Following the closing of the IPO, $230,000,000 of the net proceeds of the sale of the Units and the Private Placement Warrants were placed in a trust account (the “Trust Account”). The funds in the Trust Account will be invested only in U.S. government treasury bills with a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940 and that invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, the proceeds from the IPO and the Private Placement will not be released from the Trust Account until the earlier of: (i) the completion of the Company’s Initial Business Combination; (ii) the redemption of any shares of the Public Shares that have been properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of Public Shares if the Company does not complete its Initial Business Combination within 24 months from the closing of the IPO (or 30 months from the closing of the IPO if the Company has executed a letter of intent, agreement in principle or definitive agreement for the initial Business Combination within 24 months from the closing of the IPO but has not completed the initial Business Combination within such 24 month period) (the “Combination Period”) or (B) with respect to any other provision relating to stockholders’ right for pre-initial Business Combination activity; and (iii) the redemption of 100% of the Public Shares if the Company is unable to complete an initial Business Combination within the Combination Period, subject to the requirements of law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders. Initial Business Combination The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds of the IPO are intended to be generally applied toward consummating an initial Business Combination. The initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the amount of any deferred underwriting discount held in the trust account) at the time of the agreement to enter into the initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect an initial Business Combination. The Company, after signing a definitive agreement for an initial Business Combination, will either (i) seek stockholder approval of the initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the initial Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes, or (ii) provide stockholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes. The decision as to whether the Company will seek stockholder approval of the initial Business Combination or will allow stockholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under New York Stock Exchange rules. If the Company seeks stockholder approval, it will complete its initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of the initial Business Combination. In such case, the Company would not proceed with the redemption of its Public Shares and the related initial Business Combination, and instead may search for an alternate initial Business Combination. If the Company holds a stockholder vote or there is a tender offer for shares in connection with an initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes. Pursuant to the Company’s amended and restated certificate of incorporation, if the Company is unable to complete the initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten 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 the Company to pay the Company’s taxes (less $100,000 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), subject to applicable law, 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. The Sponsor and the Company’s directors, director nominees and officers have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (as defined below) (see Note 6, Related Party Transactions, for more information) held by them if the Company fails to complete an initial Business Combination within the Combination Period. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquires shares of Class A common stock in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the initial Business Combination within the Combination Period. Separate trading of Class A common shares and Public Warrants On March 31, 2021, the Company announced that, commencing March 31, 2021, the holders of the Company’s Units may elect to separately trade the Class A common stock and Public Warrants comprising the Units. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Those units not separated will continue to trade on the New York Stock Exchange under the symbol “BOAS.U,” and each of the shares of Class A common stock and Public Warrants that are separated will trade on the New York Stock Exchange under the symbols “BOAS” and “BOAS WS,” respectively. |
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RESTATEMENT OF A PREVIOUSLY ISSUED FINANCIAL STATEMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RESTATEMENT OF A PREVIOUSLY ISSUED FINANCIAL STATEMENTS | NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS In connection with the preparation of the Company’s financial statements as of September 30, 2021, the Company’s management re-evaluated the Company’s application of ASC 480-10-S99 to its accounting classification of its Class A common stock subject to possible redemption issued as part of the units sold in the Company’s IPO on February 26, 2021. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Class A common stock in permanent equity, or total stockholders’ equity, due to the Company’s requirement to maintain at least $5,000,001 of tangible net assets. Pursuant to this re-evaluation, the Company’s management determined that all Class A common stock subject to redemption include provisions that require classification of the Public Shares as temporary equity. This resulted in (1) 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, and (2) a change to the Company’s earnings per share calculation to allocate net income (loss) to Class A and Class B common stock on a pro rata basis based on weighted average shares outstanding. The Company initially determined these changes were not qualitatively material to the Company’s previously issued financial statements. Instead, the Company revised its previously issued financial statements in Note 2 to its Form 10-Q for the quarterly period ended September 30, 2021. Although the qualitative factors that management assessed tended to support a conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements and it was subsequently determined that the qualitative and quantitative factors support a conclusion that the misstatements are material on a quantitative basis. As a result, the Company determined that the misstatement was of such magnitude that it is probable that the judgment of a reasonable person relying on the financial statements would have been influenced by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A common stock previously classified within permanent equity and the change to its presentation of earnings per share is material quantitatively and it should restate its previously issued financial statements. As a result, the Company is restating its unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 in this Form 10-Q/A, Amendment No. 1 (the “Amended Q3 Form 10-Q”) to remove the “Revision of Previously Issued Financial Statements” included in Note 2 as the Company is refiling the unaudited interim financial statements for those periods affected. See the Amendment No. 1 to the Form 10-Q as of and for the period ended March 31, 2021, and Amendment No. 1 to the Form 10-Q as of and for the period ended June 30, 2021 for a description of the restatement and impact on those unaudited interim financial statements. The Company included Note 10, Class A Common Stock Subject to Possible Redemption, in its restated Notes to Condensed Financial Statements that describes the number of Class A shares that are subject to possible redemption, and also provides a reconciliation of the gross IPO proceeds to the Class A common stock subject to possible redemption as of the date of the condensed balance sheet. As part of the Company’s assessment of its Class A Common Stock Subject to Possible Redemption, the Company identified an additional error in its accounting for its Private Placement Warrants. When the fair value of the warrants at the date of issuance is in excess of the proceeds received, the difference is recorded as a loss as of the date of issuance. As a result, the Company recognized a $328,750 loss during the three months ended March 31, 2021 related to the difference between the fair value of the Private Placement Warrants and the proceeds from the Private Placement Warrants. This loss is included in the accompanying condensed statement of operations for the nine months ended September 30, 2021 within “Change in fair value of derivative warrant liability.”. This also caused a change in the Company’s net income per share calculation. Further, this Amendment No. 1 on Form 10-Q/A for the quarterly period ended September 30, 2021 includes minor formatting, wording and grammar changes to the condensed financial statements and Notes to Condensed Financial Statements. Impact As described above, the Company is restating its unaudited interim financial statements included in the Amended Q3 Form 10-Q to remove the “Revision of Previously Issued Financial Statements” included in Note 2 as the Company restated the unaudited interim financial statements for the affected prior periods for the changes described above. See the Amendment No. 1 to the Form 10-Q as of and for the period ended March 31, 2021, and Amendment No. 1 to the Form 10-Q as of and for the period ended June 30, 2021 for a description of the restatement and impact on those unaudited interim financial statements. Regarding the loss that resulted from the difference between the Private Placement Warrants’ fair value and proceeds received, the Company evaluated this correction in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” and has determined that the related impact was material to the Affected Periods that contained the error. Therefore, the Company, in consultation with its Audit Committee, concluded that the Affected Period should be restated to correct the accounting of the Company’s Private Placement Warrants upon issuance. As such, the Company is reporting these restatements to the Affected Period in this quarterly report. The following table summarizes the effect of this restatement on the Company’s financial statements for the Affected Period:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
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Sep. 30, 2021 | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim 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 should be read in conjunction with the Company’s final prospectus as filed with the SEC on February 17, 2021. Accordingly, certain disclosures required by GAAP and normally included in Annual Reports on Form 10-K have been condensed or omitted from this report; however, except as disclosed herein, there has been no material change in the information disclosed in the notes to condensed financial statements included in the Company’s 2020 financial statements. It is the opinion of management that all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. The Company has no items of other comprehensive income or loss; therefore, its net income or loss is identical to its comprehensive income or loss. Operating results for the periods presented are not necessarily indicative of expected results for the full year or for any future interim periods. Use of Estimates In the course of preparing the condensed financial statements, management makes various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, income and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events. Although management believes these estimates are reasonable, actual results could differ from these estimates. Estimates made in preparing these condensed financial statements include, among other things, (1) the measurement of derivative warrant liabilities and (2) accrued expenses. Changes in these estimates and assumptions could have a significant impact on results in future periods. 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. Cash Held in Trust Account At September 30, 2021, the Company had $230,006,946 in cash held in the Trust Account that were held in U.S. Treasury Bills. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Certain financial assets and liabilities, such as the derivative warrant liability, are measured at fair value on a recurring basis. Nonfinancial assets and liabilities, if any, are recognized at fair value on a nonrecurring basis. The Company categorizes the inputs to the fair value of its financial assets and liabilities using a three-tier fair value hierarchy, established by the Financial Accounting Standards Board (“FASB”), that prioritizes the significant inputs used in measuring fair value. These levels are: Level 1—inputs are based on unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Examples of Level 1 inputs include financial instruments such as exchange-traded derivatives, listed securities and U.S. government treasury securities. Level 2— inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Examples of Level 2 inputs include nonexchange-traded derivatives such as over-the-counter forwards, swaps and options. Level 3—inputs that are generally unobservable from objective sources and typically reflect management’s estimates and assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash held in Trust Account. The Company’s Trust Account is maintained with a high-quality financial institution, with the compositions and maturities of the Trust Account’s investments are regularly monitored by management. Derivative Warrant Liabilities The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. The Company further evaluated the Public Warrants and Private Placement Warrants (collectively, the “Warrants”, which are discussed in Note 4, Note 5, and Note 6) in accordance with ASC 815-40 and concluded that a provision in the Warrant Agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as a component of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants were measured at fair value at inception (on the date of the IPO) and recorded as derivative warrant liabilities on the condensed balance sheets. The Warrants are subject to remeasurement at each reporting date until exercised or expiration in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized on the statements of operations in the period of change. Subsequent to becoming publicly traded on March 31, 2021, the fair value of the Public Warrants was determined based on their quoted trading price. Prior to being publicly traded, the fair value of the Public Warrants was estimated using a Monte Carlo simulation approach, while the fair value of the Private Placement Warrants was estimated using a Black-Scholes option pricing model (see Note 4, Fair Value Measurements, for more information). Allocation of Issuance Costs The Company accounts for the allocation of its issuance costs to its Warrants using the guidance in ASC 470-20, applied by analogy. Under this guidance, if debt or stock is issued with detachable warrants, the proceeds need to be allocated to the two instruments using either the fair value method, the relative fair value method, or the residual value method. The guidance also requires companies to use a consistent approach in allocating issuance costs between the instruments. Accordingly, the Company allocated its issuance costs of $12,888,135—consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting commissions, and $238,135 of other offering costs—to the issuance of its Class A shares and Public Warrants in the amount of $12,449,938 and $438,197, respectively. Issuance costs attributed to the Public Warrants were expensed during the three months ended March 31, 2021, to the condensed statements of operations. Issuance costs associated with the issuance of Class A common stock were charged against the carrying value of the Class A common stock subject to possible redemption upon the completion of the IPO. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. 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 ASC 480. Shares of Class A common stock subject to mandatory redemption (if any) 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 features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021, 23,000,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets. Immediately upon the closing of the Initial Public Offering, the Company recognized the remeasurement from initial book value to redemption amount, which approximates fair value. The change in the carrying value of Class A common stock subject to possible redemption resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit and Class A common stock. Recently Issued Accounting Standards In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The new standard is effective for the Company on January 1, 2024, although early adoption is permitted. The ASU allows the use of the modified retrospective method or the fully retrospective method. The Company is still in the process of evaluating the impact of this new standard; however, the Company does not believe the initial impact of adopting the standard will result in any changes to the Company’s statements of financial position, operations or cash flows. |
FAIR VALUE MEASUREMENTS |
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| FAIR VALUE MEASUREMENTS | NOTE 4 — FAIR VALUE MEASUREMENTS Financial Assets and Liabilities Measured on a Recurring Basis Certain assets and liabilities are reported at fair value on a recurring basis. These assets and liabilities include the investments held in Trust Account, and derivative warrant liabilities. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and where they are classified within the fair value hierarchy at September 30, 2021. The Company did not have any assets or liabilities that were measured at fair value on a recurring basis at December 31, 2020.
Investments held in Trust Account. At September 30, 2021, the investments held in Trust Account were entirely comprised of U.S. Treasury Bills. During the three and nine months ended September 30, 2021, the Company did not withdraw any interest income from the Trust Account. Derivative Warrant Liabilities. The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within derivative warrant liabilities on the condensed balance sheets. The derivative warrant liabilities were measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed statements of operations. Initial Measurement The estimated fair value of the Public Warrants and the Private Placement Warrants on February 26, 2021 was estimated using a Monte Carlo simulation and a Black-Scholes option pricing model, respectively. At their initial measurement, the Warrants were classified as Level 3 inputs due to the use of unobservable inputs. The following table presents information and assumptions used to determine the estimated fair values of the Warrants using the pricing models:
Subsequent Measurement The Warrants are measured at fair value on a recurring basis. The subsequent measurement of the Public Warrants as of September 30, 2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker BOAS WS. The fair value of the Private Warrants continues to be estimated using a Black-Scholes option pricing model and is classified as Level 3 due to the use of unobservable inputs. The following table presents information and assumptions used in the Black-Scholes option pricing model to determine the estimated fair value of the Private Placement Warrants as of September 30, 2021:
The following contains additional information regarding the inputs used in the pricing models:
Due to the use of quoted prices in an active market (Level 1) to measure the fair values of the Public Warrants subsequent to March 31, 2021, the Company had transfers out of Level 3 totaling $8,126,666 during the period ended March 31, 2021. The change in fair value of the derivative warrant liabilities, net of expense related to the initial fair value of the Private Warrants in excess of proceeds received, through September 30, 2021 is as follows:
Fair Value of Other Financial Instruments The carrying value of cash and accounts payable are considered to be representative of their respective fair values due to the nature of and short-term maturities of those instruments. |
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STOCKHOLDERS' EQUITY (DEFICIT) |
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| STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 5 — STOCKHOLDERS’ EQUITY (DEFICT) 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 designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At 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 380,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. As of September 30, 2021, there were no shares of Class A common stock issued and (excluding 23,000,000 shares of common stock subject to possible redemption). If the Company enters into an initial Business Combination, it may (depending on the terms of such an initial Business Combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on the initial Business Combination to the extent the Company seeks stockholder approval in connection with the initial Business Combination. In addition, 23,000,000 shares of Class A common stock are redeemable upon the consummation of the Company’s initial Business Combination, subject to the requirements of law. In addition, if the Company is unable to complete the initial Business Combination within the Combination Period, the Company will cease all operations except for the purpose of winding up and redeem the shares of Class A common stock at a per-share price equal to the aggregate amount then on deposit in the Trust Account, divided by the number of then outstanding Public Shares (see Note 1, Description of Organization and Business Operations, for more information). The Company classified the shares of Class A common stock subject to redemption rights as temporary equity as the event of the consummation of the Company’s initial Business Combination is not solely within the control of the Company. 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. At December 31, 2020, 5,750,000 shares of Class B common stock were and outstanding. These amounts have been retroactively adjusted to reflect the February 24, 2021 stock dividend of 0.14 shares, described in Note 6, Related Party Transactions. Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of the stockholders, except as required by law. The Sponsor, the Company’s officers and directors entered into a letter agreement with the Company, pursuant to which they agreed (i) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of the initial Business Combination, (ii) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve an amendment to the Company’s certificate of incorporation and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to their Public Shares if the Company fails to complete the initial Business Combination within such time period. Warrant Liabilities — Public Warrants may only be exercised for a whole number of shares. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the IPO; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if a registration statement covering the shares of Class A common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the IPO, 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 salable 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 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. The Company may redeem the Public Warrants (except with respect to the Private Placement Warrants):
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. |
RELATED PARTY TRANSACTIONS |
9 Months Ended |
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Sep. 30, 2021 | |
| RELATED PARTY TRANSACTIONS | |
| RELATED PARTY TRANSACTIONS | NOTE 6 — RELATED PARTY TRANSACTIONS Founder Shares On December 31, 2020, the Sponsor purchased 5,031,250 shares of Class B common stock (the “Founder Shares”) for an aggregate price of $25,000, or approximately $0.005 per share. The Sponsor agreed to forfeit up to 656,250 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters. On February 24, 2021, the Company effected a stock dividend of 0.14 shares of Class B common stock, resulting in the Sponsor holding an aggregate of 5,750,000 Founder Shares (up to 750,000 Founder Shares of which were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised), representing an adjusted purchase price of approximately $0.004 per share. The financial statements have been retroactively restated to reflect the stock dividend. The underwriters exercised the over-allotment option in full; thus, the Founder Shares are no longer subject to forfeiture. The Founder Shares are identical to the Class A common stock included in the Units being sold in the IPO except that the Founder Shares automatically convert into shares of Class A common stock at the time of the Company’s initial Business Combination, on a one-for-one basis, subject to adjustments pursuant to certain anti-dilution rights, and the Founder Shares are subject to certain transfer restrictions. The Company’s initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 180 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Private Placement As described in Note 1, Description of Organization and Business Operations, the Company sold Private Placement Warrants simultaneously with the closing of the IPO. Each whole Private Placement Warrant is exercisable for one whole share of the Company’s Class A common stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account. If the initial Business Combination is not completed 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. The Private Placement Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. The Private Placement Warrants are not transferrable, assignable or salable until 30 days after the completion of the initial Business Combination. The excess fair value over the proceeds received for the Private Placement Warrants is recorded as a loss in the accompanying condensed statement of operations for the nine months ended September 30, 2021 within “Change in fair value of derivative warrant liability.” Related Party Loan The Company’s Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the IPO pursuant to a promissory note (the “Note”). This Note was non-interest bearing and payable on the earlier of May 31, 2021 or the completion of the IPO. The Company did not borrow any amount under the Note prior to the IPO. In order to finance transaction costs in connection with a Business Combination, the Sponsor, 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”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant. These warrants would be identical to the Private Placement Warrants. To date, the Company has had no Working Capital Loans outstanding. |
INCOME TAXES |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| INCOME TAXES | |
| INCOME TAXES | NOTE 7 — INCOME TAXES The Company’s provision for income taxes for the three and nine months ended September 30, 2021 is based on the estimated annual effective tax rate, in addition to discrete items. As of September 30, 2021 and December 31, 2020, the Company has provided a valuation allowance against its net deferred tax assets that it believes, based on the weight of available evidence, are not more likely than not to be realized. Therefore, no material current tax liability or expense has been recorded in the condensed financial statements. |
NET INCOME PER COMMON SHARE (As Restated) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NET INCOME PER COMMON SHARE (As Restated) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NET INCOME PER COMMON SHARE (As Restated) | NOTE 8 — NET INCOME PER COMMON SHARE (As Restated) The Company has two classes of shares, Class A common stock and Class B common stock. Net income per common share is computed by dividing net income, on a pro rata basis, by the weighted average number of common shares outstanding for the period. Remeasurement associated with the redeemable shares of Class A common stock is excluded from net income per common share as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the IPO and Private Placement to purchase 14,241,666 shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2021, the Company did not have any other dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in earnings of the Company. As a result, diluted net income per common share is the same as basic net income per common share for the periods presented. Reconciliation of Net Income per Common Share The following table reflects the calculation of basic and diluted net income per common share:
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| COMMITMENTS AND CONTINGENCIES. | |
| COMMITMENTS AND CONTINGENCIES | NOTE 9 — COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement, dated February 23, 2021, 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 Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of 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 Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form 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 the 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. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were paid a cash underwriting discount of 2.0% of the gross proceeds of the IPO, or $4,600,000, with an additional fee (the “Deferred Discount”) of 3.5% of the gross offering proceeds payable upon the Company’s completion of an initial Business Combination. This Deferred Discount of $8,050,000 was recorded as deferred underwriting commissions in the balance sheet as of September 30, 2021. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination. |
CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated) |
9 Months Ended | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||
| CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated) | |||||||||||||||||||||||||||||||||
| CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated) | NOTE 10 — CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated) 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 the occurrence of future events. As of September 30, 2021, there were 23,000,000 shares of Class A common stock outstanding, all of which were subject to possible redemption. As of September 30, 2021, Class A common stock subject to possible redemption reflected on the condensed balance sheet is reconciled on the following table:
|
SUBSEQUENT EVENTS |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| SUBSEQUENT EVENTS | |
| SUBSEQUENT EVENTS | NOTE 11 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions through the date these financial statements were issued. The Company determined there were no events, other than those described in Note 2, that required disclosure or recognition in these condensed financial statements.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
| Basis of Presentation | Basis of Presentation The accompanying unaudited interim 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 should be read in conjunction with the Company’s final prospectus as filed with the SEC on February 17, 2021. Accordingly, certain disclosures required by GAAP and normally included in Annual Reports on Form 10-K have been condensed or omitted from this report; however, except as disclosed herein, there has been no material change in the information disclosed in the notes to condensed financial statements included in the Company’s 2020 financial statements. It is the opinion of management that all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. The Company has no items of other comprehensive income or loss; therefore, its net income or loss is identical to its comprehensive income or loss. Operating results for the periods presented are not necessarily indicative of expected results for the full year or for any future interim periods. |
| Use of Estimates | Use of Estimates In the course of preparing the condensed financial statements, management makes various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, income and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events. Although management believes these estimates are reasonable, actual results could differ from these estimates. Estimates made in preparing these condensed financial statements include, among other things, (1) the measurement of derivative warrant liabilities and (2) accrued expenses. Changes in these estimates and assumptions could have a significant impact on results in future periods. |
| 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. |
| Cash Held in Trust Account | Cash Held in Trust Account At September 30, 2021, the Company had $230,006,946 in cash held in the Trust Account that were held in U.S. Treasury Bills. |
| Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Certain financial assets and liabilities, such as the derivative warrant liability, are measured at fair value on a recurring basis. Nonfinancial assets and liabilities, if any, are recognized at fair value on a nonrecurring basis. The Company categorizes the inputs to the fair value of its financial assets and liabilities using a three-tier fair value hierarchy, established by the Financial Accounting Standards Board (“FASB”), that prioritizes the significant inputs used in measuring fair value. These levels are: Level 1—inputs are based on unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Examples of Level 1 inputs include financial instruments such as exchange-traded derivatives, listed securities and U.S. government treasury securities. Level 2— inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Examples of Level 2 inputs include nonexchange-traded derivatives such as over-the-counter forwards, swaps and options. Level 3—inputs that are generally unobservable from objective sources and typically reflect management’s estimates and assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. |
| Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash held in Trust Account. The Company’s Trust Account is maintained with a high-quality financial institution, with the compositions and maturities of the Trust Account’s investments are regularly monitored by management. |
| Derivative Warrant Liabilities | Derivative Warrant Liabilities The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. The Company further evaluated the Public Warrants and Private Placement Warrants (collectively, the “Warrants”, which are discussed in Note 4, Note 5, and Note 6) in accordance with ASC 815-40 and concluded that a provision in the Warrant Agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as a component of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants were measured at fair value at inception (on the date of the IPO) and recorded as derivative warrant liabilities on the condensed balance sheets. The Warrants are subject to remeasurement at each reporting date until exercised or expiration in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized on the statements of operations in the period of change. Subsequent to becoming publicly traded on March 31, 2021, the fair value of the Public Warrants was determined based on their quoted trading price. Prior to being publicly traded, the fair value of the Public Warrants was estimated using a Monte Carlo simulation approach, while the fair value of the Private Placement Warrants was estimated using a Black-Scholes option pricing model (see Note 4, Fair Value Measurements, for more information). |
| Allocation of Issuance Costs | Allocation of Issuance Costs The Company accounts for the allocation of its issuance costs to its Warrants using the guidance in ASC 470-20, applied by analogy. Under this guidance, if debt or stock is issued with detachable warrants, the proceeds need to be allocated to the two instruments using either the fair value method, the relative fair value method, or the residual value method. The guidance also requires companies to use a consistent approach in allocating issuance costs between the instruments. Accordingly, the Company allocated its issuance costs of $12,888,135—consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting commissions, and $238,135 of other offering costs—to the issuance of its Class A shares and Public Warrants in the amount of $12,449,938 and $438,197, respectively. Issuance costs attributed to the Public Warrants were expensed during the three months ended March 31, 2021, to the condensed statements of operations. Issuance costs associated with the issuance of Class A common stock were charged against the carrying value of the Class A common stock subject to possible redemption upon the completion of the IPO. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. |
| 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 ASC 480. Shares of Class A common stock subject to mandatory redemption (if any) 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 features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021, 23,000,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets. Immediately upon the closing of the Initial Public Offering, the Company recognized the remeasurement from initial book value to redemption amount, which approximates fair value. The change in the carrying value of Class A common stock subject to possible redemption resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit and Class A common stock. |
| Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The new standard is effective for the Company on January 1, 2024, although early adoption is permitted. The ASU allows the use of the modified retrospective method or the fully retrospective method. The Company is still in the process of evaluating the impact of this new standard; however, the Company does not believe the initial impact of adopting the standard will result in any changes to the Company’s statements of financial position, operations or cash flows. |
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) |
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| RESTATEMENT OF A PREVIOUSLY ISSUED FINANCIAL STATEMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of impact of the restatement on financial statements | The following table summarizes the effect of this restatement on the Company’s financial statements for the Affected Period:
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FAIR VALUE MEASUREMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| FAIR VALUE MEASUREMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of company's assets and liabilities that are measured at fair value on a recurring basis | The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and where they are classified within the fair value hierarchy at September 30, 2021.
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| Schedule of quantitative information regarding Level 3 fair value measurements inputs |
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| Schedule of change in the fair value of the warrant liabilities |
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NET INCOME PER COMMON SHARE (As Restated) (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NET INCOME PER COMMON SHARE (As Restated) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of basic and diluted net income loss per common share | The following table reflects the calculation of basic and diluted net income per common share:
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CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||
| CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated) | |||||||||||||||||||||||||||||||||
| Summary of Class A common stock subject to possible redemption |
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RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
Sep. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2021 |
|
| Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
| Minimum net tangible assets | $ 5,000,001 | $ 5,000,001 | |
| loss due to change in fair value of warrant liabilities | $ (3,948,341) | $ (5,795,166) | |
| Private Placement Warrants | |||
| Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
| loss due to change in fair value of warrant liabilities | $ 328,750 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) |
9 Months Ended | |||
|---|---|---|---|---|
Feb. 26, 2021 |
Sep. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
|
| Cash equivalents | $ 0 | $ 0 | ||
| Cash held in trust account | 230,006,946 | |||
| Transaction costs | $ 12,888,135 | 12,888,135 | ||
| Underwriting fees | 4,600,000 | 4,600,000 | ||
| Deferred underwriting commissions | 8,050,000 | 8,050,000 | ||
| Underwriting fees | $ 8,050,000 | 8,050,000 | ||
| Other offering costs | $ 238,135 | |||
| Class A Common Stock | ||||
| Issuance value | $ 12,449,938 | |||
| Anti-dilutive securities attributable to warrants (in shares) | 14,241,666 | |||
| Class A common stock subject to possible redemption, outstanding (in shares) | 23,000,000 | 0 | ||
| Class A Common Stock Subject to Redemption | ||||
| Class A common stock subject to possible redemption, outstanding (in shares) | 23,000,000 | |||
| Public Warrants | ||||
| Issuance value | $ 438,197 |
FAIR VALUE MEASUREMENTS (Details) |
Sep. 30, 2021
USD ($)
|
|---|---|
| Assets: | |
| Investments held in Trust Account | $ 230,006,946 |
| Liabilities, Fair Value Disclosure [Abstract] | |
| Derivative warrant liabilities | 8,599,833 |
| Level 1 | U.S. Treasury Securities | |
| Assets: | |
| Investments held in Trust Account | 230,006,946 |
| Level 1 | U.S. Treasury Securities | Public Warrants | |
| Liabilities, Fair Value Disclosure [Abstract] | |
| Derivative warrant liabilities | 4,523,333 |
| Level 3 | U.S. Treasury Securities | Private Placement Warrants | |
| Liabilities, Fair Value Disclosure [Abstract] | |
| Derivative warrant liabilities | $ 4,076,500 |
STOCKHOLDERS' EQUITY (DEFICIT) - Preferred Stock Shares (Details) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| STOCKHOLDERS' EQUITY (DEFICIT) | ||
| Preferred shares, shares authorized | 1,000,000 | 1,000,000 |
| Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 |
| Preferred shares, shares issued | 0 | 0 |
| Preferred shares, shares outstanding | 0 | 0 |
RELATED PARTY TRANSACTIONS - Additional Information (Details) |
Sep. 30, 2021
USD ($)
$ / shares
|
|---|---|
| Working capital loans warrant | |
| Related Party Transaction [Line Items] | |
| Outstanding balance of related party note | $ 0 |
| Promissory Note with Related Party | |
| Related Party Transaction [Line Items] | |
| Maximum borrowing capacity of related party promissory note | 300,000 |
| Related Party Loans | |
| Related Party Transaction [Line Items] | |
| Loan conversion agreement warrant | $ 1,500,000 |
| Related Party Loans | Working capital loans warrant | |
| Related Party Transaction [Line Items] | |
| Price of warrant | $ / shares | $ 1.00 |
NET INCOME PER COMMON SHARE (Details) - USD ($) |
3 Months Ended | 9 Months Ended |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
|
| Class A Common Stock | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
| Shares excluded since their inclusion would be anti-dilutive | 14,241,666 | |
| Allocation of net income | $ 2,767,454 | $ 3,460,587 |
| Weighted Average Number of Shares Outstanding, Basic | 23,000,000 | 18,282,051 |
| Weighted Average Number of Shares Outstanding, Diluted | 23,000,000 | 18,282,051 |
| Basic net income per share | $ 0.12 | $ 0.19 |
| Diluted net income per share | $ 0.12 | $ 0.19 |
| Class B Common Stock | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
| Allocation of net income | $ 691,864 | $ 1,088,410 |
| Weighted Average Number of Shares Outstanding, Basic | 5,750,000 | 5,750,000 |
| Weighted Average Number of Shares Outstanding, Diluted | 5,750,000 | 5,750,000 |
| Basic net income per share | $ 0.12 | $ 0.19 |
| Diluted net income per share | $ 0.12 | $ 0.19 |
COMMITMENTS AND CONTINGENCIES (Details) |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| COMMITMENTS AND CONTINGENCIES. | |
| Percentage of underwriting discount | 2.00% |
| Underwriting additional fee | $ 4,600,000 |
| Percentage of gross offering proceeds payable | 3.50% |
| Deferred underwriting commissions | $ 8,050,000 |
CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION (As Restated) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
Mar. 31, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
| Remeasurement of Class A common stock subject to possible redemption | $ 20,269,937 | $ (20,269,937) | |
| Class A common stock subject to possible redemption | $ 230,000,000 | ||
| Class A Common Stock | |||
| Temporary equity, shares outstanding | 23,000,000 | 0 | |
| Class A Common Stock Subject to Redemption | |||
| Temporary equity, shares outstanding | 23,000,000 | ||
| Gross Proceeds | $ 230,000,000 | ||
| Offering costs and underwriting fees allocated to Class A common stock subject to possible redemption | (12,439,938) | ||
| Remeasurement of Class A common stock subject to possible redemption | 20,269,937 | ||
| Class A common stock subject to possible redemption | 230,000,000 | ||
| Class A Common Stock Subject to Redemption | Public Warrants | |||
| Proceeds allocated to Public Warrants at issuance | $ (7,819,999) |