Registration of securities issued in business combination transactions

Restatement of Previously Issued Financial Statements

v3.21.2
Restatement of Previously Issued Financial Statements
10 Months Ended
Dec. 31, 2020
Restatementof 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 warrants 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.

Upon review of the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (SPACs)” promulgated by the SEC on April 12, 2021, 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. An instrument would be considered indexed to an entity’s own stock if its settlement amount were equal the difference between the fair value of a fixed number of the entity’s equity shares and a fixed monetary amount or an instrument that includes variables that would be inputs to the fair value of a fixed-for-fixed forward or option on equity shares. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s warrants are not indexed to the Company’s common shares 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.

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

The Company’s accounting for the warrants as components of equity instead of as derivative liabilities did have an effect on the Company’s previously reported operating expenses and cash flows. Since the warrants were issued on June 30, 2020, it would have an effect on the profit and loss because of the allocation of the IPO expenses to the warrants on the balance sheet as of March 31, 2020 (unaudited) as well as the respective statements of operations for the period from March 6, 2020 (inception) through March 31, 2020 (unaudited), three months ended June 30, 2020 (unaudited) and period from March 6, 2020 (inception) through June 30, 2020 (unaudited).

 

As Previously
Reported

 

Adjustment

 

As Restated

Balance Sheet as of June 30, 2020 (audited)

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

 

 

 

28,883,589

 

 

$

28,883,589

 

Total Liabilities

 

 

13,150,000

 

 

 

28,883,589

 

 

 

42,033,589

 

Class A common stock, subject to redemption

 

 

333,288,890

 

 

 

(28,883,589

)

 

 

304,405,301

 

Class A Common Stock

 

 

167

 

 

 

289

 

 

 

456

 

Additional paid-in capital

 

 

5,001,029

 

 

 

1,617, 752

 

 

 

6,618,781

 

Accumulated deficit

 

 

(2,062

)

 

 

(1,618,041

)

 

 

(1,620,103

)

Total Stockholders’ Equity (deficit)

 

 

5,000,010

 

 

 

 

 

 

5,000,010

 

Balance Sheet as of September 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Warrant Liability

 

$

 

 

$

28,046,317

 

 

$

28,046,317

 

Total Liabilities

 

 

13,242,334

 

 

 

28,046,317

 

 

 

41,288,651

 

Class A Common Stock, subject to possible redemption

 

 

333,100,530

 

 

 

(28,046,317

)

 

 

305,054,213

 

Class A common stock

 

 

169

 

 

 

289

 

 

 

458

 

Additional paid-in capital

 

 

5,189,387

 

 

 

780,480

 

 

 

5,969,867

 

Accumulated deficit

 

 

(190,427

)

 

 

(780,769

)

 

 

(971,196

)

Total Stockholders’ Equity (deficit)

 

 

5,000,004

 

 

 

 

 

 

5,000,004

 

Balance Sheet as of December 31, 2020 (audited)

 

 

 

 

 

 

 

 

 

 

 

 

Warrant Liability

 

$

 

 

$

66,126,490

 

 

$

66,126,490

 

Total Liabilities

 

 

13,401,040

 

 

 

66,126,490

 

 

 

79,527,530

 

Class A common stock

 

 

332,882,720

 

 

 

(66,126,490

)

 

 

266,756,230

 

Shareholder’s equity Class A Common Stock

 

 

171

 

 

 

661

 

 

 

832

 

Additional paid-in capital

 

 

5,407,195

 

 

 

38,860,281

 

 

 

44,267,476

 

Accumulated deficit

 

 

(408,237

)

 

 

(38,860,942

)

 

 

(39,269,179

)

Total Stockholders’ Equity (deficit)

 

 

5,000,004

 

 

 

 

 

 

5,000,004

 

 

As Previously
Reported

 

Adjustments

 

As Restated

Statement of Operations for the period from March 6, 2020 to June 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Formation and operating costs

 

$

2,062

 

 

$

551,352

 

 

$

553,414

 

Change in the fair value of the warrants

 

 

 

 

 

 

1,066,689

 

 

 

1,066,689

 

(Loss) Gain before provision for income taxes

 

 

(2,062

)

 

 

(1,618,041

)

 

 

(1,620,103

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

Net (loss) gain

 

 

(2,062

)

 

 

(1,618,041

)

 

 

(1,620,103

)

Basic and diluted net income per common share, Class A,

 

 

 

 

 

 

 

 

 

Basic and diluted net (loss) income per common share, Class B

 

 

(0.00

)

 

 

(0.19

)

 

 

(0.19

)

Statement of Operations for the three months ended September 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Formation and operating costs

 

 

284,765

 

 

 

 

 

 

284,765

 

Change in fair value of warrants

 

$

 

 

$

837,272

 

 

$

837,272

 

(Loss) Gain before provision for income taxes

 

 

(176,031

)

 

 

837,272

 

 

 

661,241

 

Provision for income taxes

 

 

(12,334

)

 

 

 

 

 

(12,334

)

Net (loss) gain

 

 

(188,365

)

 

 

837,272

 

 

 

(648,907

)

Basic and diluted net income per common share, Class A

 

 

0.00

 

 

 

0.02

 

 

 

0.02

 

Basic and diluted net (loss) income per common share, Class B

 

 

(0.03

)

 

 

(0.04

)

 

 

(0.07

)

Statement of Operations for the Period From March 6, 2020 (inception) to September 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Formation and operating costs

 

$

286,827

 

 

$

551,352

 

 

$

838,179

 

Loss from operations

 

 

(286,827

)

 

 

(551,352

)

 

 

(838,179

)

Change in fair value of derivative warrant liability

 

 

 

 

 

(229,417

)

 

 

(229,417

)

(Loss) Gain before provision for income taxes

 

 

(178,093

)

 

 

(780,769

)

 

 

(958,862

)

Provision for income taxes

 

 

(12,334

)

 

 

 

 

 

(12,334

)

Net (loss) gain

 

 

(190,427

)

 

 

(780,769

)

 

 

(971,196

)

Basic and diluted net income per common share, Class A

 

 

0.00

 

 

 

0.00

 

 

 

0.00

 

Basic and diluted net (loss) income per common share, Class B

 

 

(0.03

)

 

 

0.06

 

 

 

(0.03

)

Statement of Operations for the Period From March 6, 2020 (inception) to December 31, 2020 (audited)

 

 

 

 

 

 

 

 

 

 

 

 

Formation and operating costs

 

$

616,065

 

 

$

551,352

 

 

$

1,167,417

 

Loss from operations

 

 

(616,065

)

 

 

(551,352

)

 

 

(1,167,417

)

Change in fair value of warrants

 

 

 

 

 

(38,309,590

)

 

 

(38,309,590

)

Loss before provision for income taxes

 

 

(396,728

)

 

 

(38,860,942

)

 

 

(39,257,670

)

Provision for income taxes

 

 

11,509

 

 

 

 

 

 

11,509

 

Net (loss) gain

 

 

(408,237

)

 

 

(38,860,942

)

 

 

(39,269,179

)

Basic and diluted net income per common share, Class A

 

 

0.00

 

 

 

 

 

 

 

Basic and diluted net (loss) income per common share, Class B

 

 

(0.05

)

 

 

(4.44

)

 

 

(4.49

)

Statement of Cash Flows

 

As Previously Reported

 

Adjustments

 

As Restated

Period from March 6, 2020 (inception) to June 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(2,062

)

 

$

(1,618,041

)

 

$

(1,620,103

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Expenses allocated to operations from offering costs related to derivative warrant liability

 

 

 

 

 

1,618,041

 

 

 

1,618,041

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

 

333,288,890

 

 

 

(28,883,589

)

 

 

304,405,301

 

Adjustment of common stock par value

 

 

 

 

 

 

289

 

 

 

289

 

Period from March 6, 2020 (inception) to September 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss)/gain

 

$

(190,427

)

 

$

(780,769

)

 

$

(971,196

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of warrants

 

$

 

 

 

229,417

 

 

 

229,417

 

Expenses allocated to operations from offering costs related to derivative warrant liability

 

 

 

 

 

551,352

 

 

 

551,352

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

 

333,288,890

 

 

 

(28,046,317

)

 

 

305,242,573

 

Change in value of common stock subject to possible redemption

 

 

(188,360

)

 

 

(460,552

)

 

 

(648,912

)

Adjustment of common stock par value

 

 

 

 

 

 

289

 

 

 

289

 

Period from March 6, 2020 (inception) to December 31, 2020 (audited)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(408,237

)

 

$

(38,860,942

)

 

$

(39,269,179

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of warrants

 

$

 

 

 

38,309,590

 

 

 

38,309,590

 

Expenses allocated to operations from offering costs related to derivative warrant liability

 

 

 

 

 

1,618,041

 

 

 

1,618,041

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Initial classification of common stock subject to possible redemption

 

 

333,288,890

 

 

 

(66,126,490

)

 

 

267,162,400

 

Change in value of common stock subject to possible redemption

 

 

(406,170

)

 

 

38,704,153

 

 

 

38,397,983