QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
SM (Stakeholder Aligned Initial Listing) securities, each consisting of one share of Class A Common Stock, $0.0001 par value |
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SM securities |
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SM securities , each whole warrant exercisable for one share of Class A Common Stock |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Assets: |
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Current assets: |
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Cash |
$ | |||
Prepaid expenses |
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Total current assets |
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Investments held in Trust Account |
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Total Assets |
$ |
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Liabilities and Stockholders’ Equity: |
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Current liabilities: |
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Accounts payable |
$ | |||
Accrued expenses |
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Franchise tax payable |
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Total current liabilities |
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Derivative warrant liabilities |
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Deferred underwriting commissions |
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Total liabilities |
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Commitments and Contingencies |
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Class A common stock, $ |
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Stockholders’ Equity: |
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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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Retained earnings |
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Total stockholders’ equity |
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Total Liabilities and Stockholders’ Equity |
$ |
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For The Three Months Ended June 30, 2021 |
For The Period From January 11, 2021 (inception) through June 30, 2021 |
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General and administrative expenses |
$ | $ | ||||||
Franchise tax expenses |
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Loss from operations |
( |
) | ( |
) | ||||
Other income (expense) |
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Change in fair value of derivative warrant liabilities |
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Financing costs—derivative warrant liabilities |
— | ( |
) | |||||
Income from investments held in Trust account |
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Net income |
$ |
$ |
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Basic and diluted weighted average outstanding of Class A redeemable common stock |
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Basic and diluted net income per share, Class A redeemable common stock |
$ | $ | ||||||
Basic and diluted weighted average shares outstanding, Class B non-redeemable common stock |
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Basic and diluted net income per share, non-redeemable Class B non-redeemable common stock |
$ | $ | ||||||
Common Stock |
Additional Paid-In Capital |
Retained Earnings (Accumulated Deficit) |
Total Stockholders’ Equity |
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Class A |
Class B |
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Shares |
Amount |
Shares |
Amount |
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Balance - January 11, 2021 (inception) |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
$ |
— |
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Issuance of Class B common stock to Initial Stockholders |
— | — | ||||||||||||||||||||||||||
Sale of SAILs in initial public offering, less fair value of public warrants |
— | — | ||||||||||||||||||||||||||
Offering costs |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Forfeiture of Class B common stock |
— | — | ( |
) | ( |
) | — | |||||||||||||||||||||
Class A common stock subject to possible redemption |
( |
) | ( |
) | — | — | ( |
) | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
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Balance - March 31, 2021 (unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Class A common stock subject to possible redemption |
( |
) | ( |
) | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||||||
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Balance - June 30, 2021 (unaudited) |
$ |
$ |
$ |
( |
) |
$ |
$ |
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Cash Flows from Operating Activities: |
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Net income |
$ | |||
Adjustments to reconcile net income to net cash used in operating activities: |
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Income from investments held in Trust account |
( |
) | ||
Financing cost—derivative warrant liabilities |
||||
Change in fair value of derivative warrant liabilities |
( |
) | ||
Changes in operating assets and liabilities: |
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Prepaid expenses |
( |
) | ||
Accounts payable |
||||
Accrued expenses |
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Franchise tax payable |
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|
|
|||
Net cash used in operating activities |
( |
) | ||
|
|
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Cash Flows from Investing Activities |
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Cash deposited in Trust Account |
( |
) | ||
|
|
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Net cash used in investing activities |
( |
) | ||
|
|
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Cash Flows from Financing Activities: |
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Proceeds from issuance of Class B common stock to Initial Stockholders |
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Proceeds from note payable to related party |
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Repayment of note payable to related party |
( |
) | ||
Proceeds received from initial public offering, gross |
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Proceeds received from private placement |
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Offering costs paid |
( |
) | ||
|
|
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Net cash provided by financing activities |
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|
|
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Net increase in cash |
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Cash—beginning of the period |
— | |||
|
|
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Cash—end of the period |
$ |
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|
|
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Supplemental disclosure of noncash financing activities: |
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Deferred underwriting commissions in connection with the initial public offering |
$ | |||
Initial value of Class A common stock subject to possible redemption |
$ | |||
Change in value of Class A common stock subject to possible redemption |
$ |
• | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For The Three Months Ended June 30, 2021 |
For The Period From January 11, 2021 (inception) through June 30, 2021 |
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Class A common stock |
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Numerator: Income allocable to Class A redeemable common stock |
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Income from investments held in Trust Account |
$ | $ | ||||||
Less: Company’s portion available to be withdrawn to pay taxes |
( |
) | ( |
) | ||||
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|
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Net income attributable |
$ |
$ |
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|
|
|
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Denominator: Weighted average Class A redeemable common stock |
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Basic and diluted weighted average shares outstanding, Class A redeemable common stock |
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|
|
|
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Basic and diluted net income per share, Class A redeemable common stock |
$ |
$ |
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|
|
|
|
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Class B common stock |
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Numerator: Net income minus net income allocable to Class A redeemable common stock |
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Net income |
$ | $ | ||||||
Net income allocable to Class A redeemable common stock |
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|
|
|
|
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Net income attributable |
$ |
$ |
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|
|
|
|
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Denominator: weighted average Class B non-redeemable common stock |
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Basic and diluted weighted average shares outstanding, Class B non-redeemable common stock |
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|
|
|
|
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Basic and diluted net income per share, Class B non-redeemable common stock |
$ |
$ |
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|
|
|
|
• | at any time while the warrants are exercisable, |
• | upon a minimum of |
• | if, and only if, the last sales price of shares of the Class A common stock equals or exceeds $ “30-day trading period”) ending before the Company sends the notice of redemption, and |
• | 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 commencing prior to the 30-day trading period and continuing each day thereafter until the date of redemption. |
• | if the sum (such sum, the “Total Return”) of (i) the volume weighted average price (“VWAP”) of shares of the Company’s Class A common stock for such final fiscal quarter of such measurement period and (ii) the amount per share of any dividends or distributions paid or payable to holders of Class A common stock on the record date for which is on or prior to the last day of the measurement period, does not exceed the Price Threshold (as defined below), the number of Conversion Shares for such measurement period will be |
• | if the Total Return exceeds the Price Threshold but does not exceed an amount equal to |
• | if the Total Return exceeds an amount equal to |
• | The term “measurement period” means (i) the period of four fiscal quarters ending with, and including, the last fiscal quarter of the fiscal year in which the Company consummates its Initial Business Combination and (ii) each of the nine successive four-fiscal-quarter periods (in each case, as proportionally adjusted to give effect to any stock splits, stock capitalizations, stock combinations, stock dividends, reorganizations, recapitalizations or any such similar transactions). |
• | The “Price Threshold” will initially equal $ |
• | For purposes of the above calculation, “PIPE Securities” means securities (other than the Public Warrants and the Private Placement Warrants) issued by the Company and/or any entities that (after giving effect to completion of the Initial Business Combination) are subsidiaries of the Company that are directly or indirectly convertible into or exercisable for shares of Class A common stock, or for a cash settlement value in lieu thereof. |
• | The foregoing calculations will be based on the Company’s fiscal year and fiscal quarters, which may change as a result of an Initial Business Combination. Each conversion of Alignment Shares will apply to the holders of Alignment Shares on a pro rata |
Fair Value Measured as of June 30, 2021 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Assets |
||||||||||||||||
Investments held in Trust Account |
$ | $ | — | $ | — | $ | ||||||||||
Liabilities: |
||||||||||||||||
Derivative public warrant liabilities |
— | — |
||||||||||||||
Derivative private placement warrant liabilities |
— | — | ||||||||||||||
As of June 30, 2021 |
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Exercise price |
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Stock Price |
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Option term (in years) |
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Volatility |
% | |||
Risk-free interest rate |
% |
Derivative warrant liabilities at January 11, 2021 |
$ | |||
Issuance of Derivative Warrants (level 3) |
||||
Change in fair value of derivative warrant liabilities - Level 3 |
( |
) | ||
Derivative warrant liabilities at March 31, 2021 - Level 3 |
||||
Transfer of Public Warrants to Level 1 |
( |
) | ||
Change in fair value of derivative warrant liabilities - Level 3 |
( |
) | ||
Derivative warrant liabilities at June 30, 2021 - Level 3 |
$ |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A common stock are a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, each of which may make it difficult for us to complete our Initial Business Combination. |
• | registration as an investment company with the SEC; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
• | may significantly dilute the equity interest of investors (which dilutive effect would increase as the price of our Class A common stock increases on a year-over-year basis, in respect of shares issued upon conversion of the Alignment Shares); |
• | may subordinate the rights of holders of shares of Class A common stock if shares of preferred stock are issued with rights senior to those afforded shares of our Class A common stock; |
• | could cause a change in control if a substantial number of shares of Class A common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our SAIL SM securities, shares of Class A common stock and/or warrants. |
• default and foreclosure on our assets if our operating revenues after an Initial Business Combination are insufficient to repay our debt obligations; |
• acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
• our inability to pay dividends on our shares of Class A common stock; |
• using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our shares of Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• solely dependent upon the performance of a single business, property or asset; or |
• dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | the history and prospects of companies whose principal business is the acquisition of other companies; |
• | prior offerings of those companies; |
• | our prospects for acquiring an operating business at attractive values; |
• | a review of debt-to-equity |
• | our capital structure; |
• | an assessment of our management and their experience in identifying operating companies; |
• | general conditions of the securities markets at the time of the Initial Public Offering; and |
• | other factors as were deemed relevant. |
• | we have a board that includes a majority of “independent directors,” as defined under the rules of Nasdaq; |
• | we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
• | we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
• | costs and difficulties inherent in managing cross-border business operations; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future business combinations may be effected; |
• | exchange listing and/or delisting requirements; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | local or regional economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | underdeveloped or unpredictable legal or regulatory systems; |
• | corruption; |
• | protection of intellectual property; |
• | social unrest, crime, strikes, riots and civil disturbances; |
• | regime changes and political upheaval; |
• | terrorist attacks, natural disasters and wars; and |
• | deterioration of political relations with the United States. |
REVOLUTION HEALTHCARE ACQUISITION CORP. | ||
By: | /s/ Jay Markowitz, M.D. | |
Name: | Jay Markowitz, M.D. | |
Title: | Chief Executive Officer |