Annual report pursuant to Section 13 and 15(d)

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

v3.21.2
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
12 Months Ended
Dec. 31, 2020
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS [Abstract]  
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

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

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

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

In accordance with ASC 825-10, Financial Instruments, as a result of the classification of the warrants as derivative liabilities, the Company expensed a portion of the offering costs originally recorded as a reduction in equity. The portion of offering costs that was expensed was determined based on the relative fair value of the Public Warrants and shares of Class A common stock included in the Units.

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

   
As
Previously
Reported
   
Adjustments
   
As
Restated
 
Balance sheet as of October 6, 2020 (audited)
                 
Warrant Liability, at fair value
 
$
   
$
27,061,145
   
$
27,061,145
 
Total liabilities
   
14,551,035
     
27,061,145
     
41,612,180
 
Class A Common Stock Subject to Possible Redemption
   
382,455,490
     
(27,061,140
)
   
355,394,350
 
Class A Common Stock
   
175
     
271
     
446
 
Additional Paid-in Capital
   
4,999,681
     
1,028,582
     
6,028,263
 
Accumulated Deficit
   
(1,000
)
   
(1,028,858
)
   
(1,029,858
)
Stockholders’ Equity
   
5,000,006
     
(5
)
   
5,000,001
 
                         
Balance sheet as of December 31, 2020 (audited)
                       
Warrant Liability, at fair vlaue
 
$
   
$
45,225,000
   
$
45,225,000
 
Total liabilities
   
15,875,583
     
45,225,000
     
61,100,583
 
Class A Common Stock Subject to Possible Redemption
   
430,570,380
     
(45,225,000
)
   
385,345,380
 
Class A Common Stock
   
194
     
453
     
647
 
Additional Paid-in Capital
   
5,134,797
     
16,159,456
     
21,294,253
 
Accumulated Deficit
   
(136,110
)
   
(16,159,909
)
   
(16,296,019
)
                         
Statement of Operations for the Period from July 30 2020 (inception) to December 31, 2020 (audited)
                       
Change in fair value of warrant liability
 
$
   
$
(15,007,134
)
 
$
(15,007,134
)
Transaction costs allocated to warrant liabilities
   
     
(1,152,775
)
   
(1,152,775
)
Net loss
   
(136,110
)
   
(16,159,909
)
   
(16,296,019
)
Weighted average shares outstanding, Class A Common stock subject to possible redemption
   
45,000,000
     
(470,588
)
   
44,529,412
 
Basic and diluted net income per share, Class A Common stock subject to possible redemption
   
0.00
     
     
0.00
 
Weighted average shares outstanding, Class B Common stock
   
11,250,000
     
(567,376
)
   
10,682,624
 
Basic and diluted net loss per share, Class B Common stock
   
(0.01
)
   
(1.52
)
   
(1.53
)
                         
Cash Flow Statement for the Period from July 30, 2020 (inception) to December 31, 2020 (audited)
                       
Net loss
 
$
(136,110
)
 
$
(16,159,909
)
 
$
(16,296,019
)
Change in fair value of warrant liability
   
     
15,007,134

   
15,007,134

Transaction costs allocated to warrant liabilities
   
     
1,152,775

   
1,152,775

Initial classification of Class A common stock subject to possible redemption
   
430,705,490
     
(30,217,870
)
   
400,487,620
 
Change in value of Class A common stock subject to possible redemption
   
(135,110
)
   
(15,007,130
)
   
(15,142,240
)