Item 1.
|
Condensed
Financial Statements
|
FTAC
PARNASSUS ACQUISITION CORP.
CONDENSED
BALANCE SHEETS
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
1,534,948
|
|
|
$
|
-
|
|
Prepaid expenses
|
|
|
510,153
|
|
|
|
-
|
|
Total current assets
|
|
|
2,045,101
|
|
|
|
-
|
|
Deferred offering costs associated with proposed public offering
|
|
|
-
|
|
|
|
5,785
|
|
Stock subscription receivable
|
|
|
-
|
|
|
|
25,000
|
|
Investments held in Trust Account
|
|
|
250,001,028
|
|
|
|
-
|
|
Total Assets
|
|
$
|
252,046,129
|
|
|
$
|
30,785
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
22,660
|
|
|
$
|
503
|
|
Accrued expenses
|
|
|
74,834
|
|
|
|
6,785
|
|
Franchise tax payable
|
|
|
48,269
|
|
|
|
-
|
|
Total current liabilities
|
|
|
145,763
|
|
|
|
7,288
|
|
Derivative warrant liabilities
|
|
|
8,586,780
|
|
|
|
-
|
|
Deferred underwriting commissions
|
|
|
10,600,000
|
|
|
|
-
|
|
Total liabilities
|
|
|
19,332,543
|
|
|
|
7,288
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value; 22,771,358 and -0- shares subject to possible redemption at $10.00 per share as of March 31, 2021 and December 31, 2020, respectively
|
|
|
227,713,580
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of March 31, 2021 and December 31, 2020
|
|
|
-
|
|
|
|
-
|
|
Class A common stock, $0.0001 par value; 60,000,000 shares authorized; 2,918,642 and -0- shares issued and outstanding (excluding 22,771,358 shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively
|
|
|
292
|
|
|
|
-
|
|
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 8,563,333 and 8,663,333 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
|
|
|
856
|
|
|
|
866
|
|
Additional paid-in capital
|
|
|
5,295,576
|
|
|
|
24,134
|
|
Accumulated deficit
|
|
|
(296,718
|
)
|
|
|
(1,503
|
)
|
Total stockholders’ equity
|
|
|
5,000,006
|
|
|
|
23,497
|
|
Total Liabilities and Stockholders’ Equity
|
|
$
|
252,046,129
|
|
|
$
|
30,785
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
FTAC
PARNASSUS ACQUISITION CORP.
CONDENSED
STATEMENT OF OPERATIONS
For
The Three Months Ended March 31, 2021 (Unaudited)
General and administrative expenses
|
|
$
|
28,524
|
|
General and administrative expenses - related party
|
|
|
20,000
|
|
Franchise tax expenses
|
|
|
48,269
|
|
Loss from operations
|
|
|
(96,793
|
)
|
Change in fair value of derivative warrant liabilities
|
|
|
322,850
|
|
Offering costs associated with derivative warrant liabilities
|
|
|
(522,300
|
)
|
Income from investments held in Trust Account
|
|
|
1,028
|
|
Net loss
|
|
$
|
(295,215
|
)
|
|
|
|
|
|
Weighted average shares outstanding of Class A common stock
|
|
|
25,000,000
|
|
Basic and diluted net income per share, Class A
|
|
$
|
0.00
|
|
Weighted average shares outstanding of
Class A and Class B non-redeemable common stock
|
|
|
7,863,777
|
|
Basic and diluted net loss per share, Class B
|
|
$
|
(0.04
|
)
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
FTAC
PARNASSUS ACQUISITION CORP.
CONDENSED
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
For
The Three Months Ended March 31, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Paid-In
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance - December 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
8,663,333
|
|
|
$
|
866
|
|
|
$
|
24,134
|
|
|
$
|
(1,503
|
)
|
|
$
|
23,497
|
|
Sale of units in initial public offering, less derivative warrant liabilities
|
|
|
25,000,000
|
|
|
|
2,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
241,372,500
|
|
|
|
-
|
|
|
|
241,375,000
|
|
Sale of private placement units, less derivative warrant liabilities
|
|
|
690,000
|
|
|
|
69
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,615,301
|
|
|
|
-
|
|
|
|
6,615,370
|
|
Offering costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15,005,066
|
)
|
|
|
-
|
|
|
|
(15,005,066
|
)
|
Forfeiture of Class B common stock
|
|
|
-
|
|
|
|
-
|
|
|
|
(100,000
|
)
|
|
|
(10
|
)
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
Class A common stock subject to possible redemption
|
|
|
(22,771,358
|
)
|
|
|
(2,277
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(227,711,303
|
)
|
|
|
-
|
|
|
|
(227,713,580
|
)
|
Net income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(295,215
|
)
|
|
|
(295,215
|
)
|
Balance - March 31, 2021 (Unaudited)
|
|
|
2,918,642
|
|
|
$
|
292
|
|
|
|
8,563,333
|
|
|
$
|
856
|
|
|
$
|
5,295,576
|
|
|
$
|
(296,718
|
)
|
|
$
|
5,000,006
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
FTAC
PARNASSUS ACQUISITION CORP.
CONDENSED
STATEMENT OF CASH FLOWS
For
The Three Months Ended March 31, 2021 (Unaudited)
Cash Flows from Operating Activities:
|
|
|
|
Net loss
|
|
$
|
(295,215
|
)
|
Adjustment to reconcile net loss to cash used in operating activities:
|
|
|
|
|
Change in fair value of derivative warrant liabilities
|
|
|
(322,850
|
)
|
Financing costs - derivative warrant liabilities
|
|
|
522,300
|
|
Income from investments held in Trust Account
|
|
|
(1,028
|
)
|
General and administrative expenses paid by related party under promissory note
|
|
|
875
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Prepaid expenses
|
|
|
(510,153
|
)
|
Accounts payable
|
|
|
(503
|
)
|
Accrued expenses
|
|
|
3,834
|
|
Franchise tax payable
|
|
|
48,269
|
|
Net cash used in operating activities
|
|
|
(554,471
|
)
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
Cash deposited in Trust Account
|
|
|
(250,000,000
|
)
|
Net cash used in investing activities
|
|
|
(250,000,000
|
)
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Proceeds from stock subscription receivable
|
|
|
25,000
|
|
Repayment of note payable to related party
|
|
|
(66,928
|
)
|
Proceeds received from initial public offering, gross
|
|
|
250,000,000
|
|
Proceeds received from private placement
|
|
|
6,900,000
|
|
Offering costs paid
|
|
|
(4,768,653
|
)
|
Net cash provided by financing activities
|
|
|
252,089,419
|
|
|
|
|
|
|
Net change in cash
|
|
|
1,534,948
|
|
|
|
|
|
|
Cash - beginning of the period
|
|
|
-
|
|
Cash - end of the period
|
|
$
|
1,534,948
|
|
|
|
|
|
|
Supplemental disclosure of noncash activities:
|
|
|
|
|
Offering costs included in accounts payable
|
|
$
|
22,660
|
|
Offering costs included in accrued expenses
|
|
$
|
70,000
|
|
Offering costs paid by related party under promissory note
|
|
$
|
66,053
|
|
Reversal of accrued offering costs
|
|
$
|
5,785
|
|
Deferred underwriting commissions in connection with the initial public offering
|
|
$
|
10,600,000
|
|
Initial value of Class A common stock subject to possible redemption
|
|
$
|
227,445,530
|
|
Change in value of Class A common shares subject to possible redemption
|
|
$
|
268,050
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
1 — Description of Organization and Business Operations
FTAC
Parnassus Acquisition Corp. (the “Company”), formerly known as FTAC General Acquisition Corp., is a blank check company incorporated
in Delaware on December 18, 2020. 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 emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As
of March 31, 2021, the Company had not commenced any operations. All activity for the period from December 18, 2020 (inception) through
March 31, 2021 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) described
below, and, subsequent to the Initial Public Offering, 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 and cash equivalents from the proceeds derived from the Initial Public Offering.
The
Company’s sponsors are FTAC Parnassus Sponsor, LLC, and FTAC Parnassus Advisors, LLC, each a Delaware limited liability company
(collectively, the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective
on March 11, 2021. On March 16, 2021, the Company consummated its Initial Public Offering of 25,000,000 units (the “Units”
and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), including the issuance
of 3,000,000 additional Units as a result of the underwriter’s partial exercise of its over-allotment option (the “Over-Allotment
Units”), at $10.00 per Unit, generating gross proceeds of $250.0 million, and incurring offering costs of approximately $15.5 million,
of which $10.6 million was for deferred underwriting commissions (see Note 5).
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 690,000
units (each, a “Private Placement Unit” and collectively, the “Private Placement Units”), at a price of $10.00
per Private Placement Unit, generating gross proceeds of $6.9 million (see Note 4). The Private Placement Units were purchased by Millennium
Management LLC (“Millennium”) (345,000 Units) and one of the Company’s Sponsors, FTAC Parnassus Sponsor, LLC (345,000
Units).
Upon
the closing of the Initial Public Offering and the Private Placement, $250.0 million ($10.00 per Unit) of the net proceeds of the Initial
Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”) and
invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting certain conditions
under Rule 2a-7 of the Investment Company Act and that invest only in direct U.S. government obligations, until the earlier of: (i) the
consummation of a Business Combination; (ii) the redemption of any Public Shares in connection with a stockholder vote to amend the Company’s
Amended and Restated Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100%
of its Public Shares if it does not complete an initial Business Combination within 24 months from the consummation of the Initial Public
Offering, or March 16, 2023 (the “Combination Period”); or (iii) the distribution of the Trust Account, as described below,
except that interest earned on the Trust Account can be released to pay the Company’s tax obligations, if the Company is unable
to complete an initial Business Combination within the Combination Period or upon any earlier liquidation of the Company.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to successfully effect a Business Combination.
Nasdaq rules provide that the Company must complete a Business Combination 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 deferred underwriting commissions and taxes
payable on interest earned on the Trust Account) at the time of signing a definitive agreement in connection with a Business Combination.
The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Company will provide its holders of the Public Shares (“Public Stockholders”) with the opportunity to redeem all or a portion
of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve
the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of
a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled
to redeem their Public Shares for a pro rata portion of the amount then on deposit in the Trust Account (at $10.00 per Public Share,
plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).
The per-share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions
the Company will pay to the representative (as discussed in Note 5). There will be no redemption rights upon the completion of a Business
Combination with respect to the Company’s warrants. The Class A common stock subject to redemption were recorded at redemption
value and classified as temporary equity, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.”
The
Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of a
Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of
the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for
business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, conduct the redemptions
pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”), and file tender offer documents
with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or
the Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in conjunction
with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval
in connection with a Business Combination, the Sponsor and the Company’s officers and directors (the “Insiders”) agreed
to vote their Founder Shares (as defined in Note 4), the shares of Class A common stock included in the Private Placement Units (the
“Placement Shares”) and any Public Shares held by them in favor of approving a Business Combination. Additionally, each public
stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
The
Company will also provide the Public Stockholders with the opportunity to redeem all or a portion of their Public Shares in connection
with any stockholder vote to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation that would
affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if it does not complete an initial
Business Combination within the Combination Period. There will be no redemption rights with respect to the Company’s warrants in
connection with a stockholder vote to approve such an amendment to the Company’s Amended and Restated Certificate of Incorporation.
Notwithstanding the foregoing, the Company may not redeem shares in an amount that would cause its net tangible assets to be less than
$5,000,001. The Insiders have agreed to vote any Founder Shares, any Placement Shares and any Public Shares held by them in favor of
any such amendment.
The
Company will have until the expiration of the Combination Period to consummate its initial Business Combination. If the Company is unable
to consummate a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purposes
of winding up; (ii) as promptly as reasonably possible but not 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 any interest earned on
the Trust Account not previously released to the Company to pay its tax obligations and up to $100,000 of interest 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. There will be no redemption rights or liquidating
distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination
within the Combination Period.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Insiders and Millennium agreed to waive their redemption rights with respect to any Founder Shares and Placement Shares, as applicable,
(i) in connection with the consummation of a Business Combination, (ii) in connection with a stockholder vote to amend the Company’s
Amended and Restated Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100%
of its Public Shares if it does not complete its initial Business Combination within the Combination Period, and (iii) if the Company
fails to consummate a Business Combination within the Combination Period. The Insiders have also agreed to waive their redemption rights
with respect to any Public Shares held by them in connection with the consummation of a Business Combination and in connection with a
stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation to modify the substance or timing of
the Company’s obligation to redeem 100% of its Public Shares if it does not complete its initial Business Combination within the
Combination Period. However, the Insiders will be entitled to redemption rights with respect to Public Shares if the Company fails to
consummate a Business Combination or liquidates within the Combination Period. The representative agreed to waive its rights to deferred
underwriting commissions held in the Trust Account in the event the Company does not consummate a Business Combination within the Combination
Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the
redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining
available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the Initial
Public Offering. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although
the Company will seek to have all vendors, service providers (other than the Company’s independent registered public accounting
firm), prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind
in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The Sponsor agreed
that it will be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced to below $10.00 per
share by the claims of target businesses or vendors or other entities that are owed money by the Company for service rendered, contracted
for or products sold to the Company. However, it may not be able to satisfy those obligations should they arise.
Notwithstanding
the foregoing redemption rights, if the Company seeks stockholder approval of its Business Combination and it does not conduct redemptions
in connection with its Business Combination pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation
provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is
acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its
shares with respect to an aggregate of 20.0% or more of the shares sold in the Initial Public Offering. However, there is no restriction
on the Company’s stockholders’ ability to vote all of their shares for or against a Business Combination.
Liquidity
and Capital Resources
As
of March 31, 2021, the Company had approximately $1.5 million in its operating bank account, and working capital of approximately $1.9
million (not taking into account approximately $48,000 in tax obligations that may be paid using investment income earned in Trust Account).
The
Company’s liquidity needs through March 31, 2021 and prior were satisfied through a payment of $25,000 from the Sponsor to purchase
the Founder Shares, the loan of approximately $67,000 from the Sponsor under the Note (as defined in Note 4), and the proceeds from the
consummation of the Private Placement not held in the Trust Account. The Company repaid the Note in full on March 16, 2021. In addition,
in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined in
Note 4). As of March 31, 2021, there were no amounts outstanding under any Working Capital Loans.
Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or
an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation
of a Business Combination or one year from this filing. Over this time period, the Company will be using the funds held outside of the
Trust Account for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing
due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire,
and structuring, negotiating and consummating the Business Combination.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
2 — Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally
accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of
the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited
condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement
of the balances and results for the periods presented. Operating results for the three months ended March 31, 2021 are not necessarily
indicative of the results that may be expected through December 31, 2021.
Restatement
In April 2021, the Company identified a misstatement
in its accounting treatment for warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and
the Private Placement Warrants (collectively, the “Warrants”) as presented in its audited balance sheet as of March 16, 2021
included in its Current Report on Form 8-K, filed March 22, 2021. The Warrants were reflected as a component of equity as opposed to liabilities
on the balance sheet. Pursuant to ASC Topic 250, Accounting Changes and Error Corrections, and Staff Accounting Bulletin 99, “Materiality”
(“SAB 99”) issued by the SEC, the Company determined the impact of the error was immaterial. The following balance sheet items
were impacted from the error correction as of March 16, 2021: an increase of approximately $8.9 million derivative warrant liabilities;
a decrease of approximately $8.9 million in the amount of Class A common shares subject to possible redemption; an increase of approximately
$522,000 in additional paid-in capital; and an increase of approximately $522,000 in accumulated deficit.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with
the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected
not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another
public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment.
It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at
the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one
or more future confirming events. One of the more significant accounting estimates included in these financial statements is the determination
of the fair value of the derivative warrant liabilities. Such estimates may be subject to change as more current information becomes
available. Accordingly, the actual results could differ significantly from those estimates.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Corporation limit of $250,000. As of March 31, 2021 and December 31, 2020,
the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such
accounts.
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 had no cash equivalents as of March 31, 2021 and December 31, 2020.
Investments
Held in the Trust Account
The
Company’s portfolio of investments held in the Trust Account is comprised of U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that
invest in U.S. government securities, or a combination thereof. The Company’s investments held in the Trust Account are classified
as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains
and losses resulting from the change in fair value of these securities is included in net gain on investments held in Trust Account in
the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available
market information.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets.
Fair
Value Measurements
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
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Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
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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
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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.
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In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Derivative
Warrant Liabilities
The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”).
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed
at the end of each reporting period.
The
6,250,000 warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the 172,500 Private
Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant
instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject
to re-measurement at each balance sheet date until exercised. The initial fair value of the Public Warrants issued in connection with
the Public Offering and the fair value of the Private Placement Warrants have been estimated using a binomial lattice model in a risk-neutral
framework. Derivative warrant liabilities are classified 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.
Offering
Costs Associated with the Initial Public Offering
Offering
costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly
related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public
Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant
liabilities are expensed as incurred and presented as non-operating expenses in the statement of operations. Offering costs associated
with the Class A common stock issued were charged to stockholders’ equity upon the completion of the Initial Public Offering.
Class A
Common Stock Subject to Possible Redemption
The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A common
stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally
redeemable Class A common stock (including shares of Class A common stock that feature 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) are classified
as temporary equity. At all other times, Class A common stock are classified as stockholders’ equity. 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 occurrence
of uncertain future events. Accordingly, as of March 31, 2021, 22,771,358 shares of Class A common stock subject to possible redemption
at the redemption amount were presented at redemption value as temporary equity, outside of the stockholders’ equity section of
the Company’s condensed balance sheets.
Net
Income (Loss) Per Share of Common Stock
Net
income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common
stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and
Private Placement to purchase an aggregate of 6,422,500 shares of the Company’s common stock in the calculation of diluted loss
per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants
would be anti-dilutive.
The Company’s unaudited condensed
statement of operations includes a presentation of income (loss) per share for common stock subject to redemption in a manner
similar to the two-class method of income per share. Net income per share, basic and diluted for Class A redeemable common stock for
the three months ended March 31, 2021 is calculated by dividing the income investments held in the Trust Account of approximately
$1,000, net of applicable franchise taxes of approximately $1,000 for the three months ended March 31, 2021, by the weighted average
number of shares of Class A redeemable common stock outstanding for the period. Net loss per share, basic and diluted for Class A
and Class B non-redeemable common stock for the three months ended March 31, 2021 is calculated by dividing net loss, less amounts
attributed to Class A redeemable common stock, by the weighted average number of shares of Class A and Class B non-redeemable common
stock outstanding for the period. The weighted average non-redeemable common stock at March 31, 2021 includes the effect of 690,000 Private Placement Units, which were
issued in conjunction with the Initial Public Offering.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes” (“ASC
740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and
a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax
return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.
There were no unrecognized tax benefits as of March 31, 2021 or December 31, 2020. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of March
31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material
deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Recent
Accounting Pronouncements
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 Company adopted ASU 2020-06 on January 1, 2021.
Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
The
Company’s management does not believe that any other recently issued, but not yet effective, accounting standards updates, if currently
adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Note
3 — Initial Public Offering
On
March 16, 2021, the Company consummated its Initial Public Offering of 25,000,000 Units, including the issuance of 3,000,000 Over-Allotment
Units as a result of the underwriter’s partial exercise of its over-allotment option, at $10.00 per Unit, generating gross proceeds
of $250.0 million, and incurring offering costs of approximately $15.5 million, of which $10.6 million was for deferred underwriting
commissions.
Each
Unit consists of one share of Class A common stock and one-fourth of one warrant (“Public Warrant”). Each whole Public Warrant
entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 (see Note 5).
Note
4 — Related Party Transactions
Founder
Shares
On December 28, 2020, the Company issued an aggregate
of 1,000 shares of common stock to the Sponsor for an aggregate purchase price of $25,000 which was subsequently paid by the Sponsor on
January 22, 2021. On January 15, 2021, the Company effected a 5,905-for-1 stock split, and on January 27, 2021, the Company effected a
stock dividend of 1.46711821 shares of Class B common stock for each share of Class B common stock outstanding prior to the dividend,
resulting in 8,663,333 shares of Class B common stock being held by the Sponsor (the “Founder Shares”). The 8,663,333 Founder
Shares include an aggregate of up to 1,100,000 shares of Class B common stock which were subject to forfeiture by the Sponsor to the extent
that the underwriter’s overallotment option was not exercised in full or in part, so that the Founder Shares would represent 25%
of the Company’s aggregate Founder Shares, Placement Shares and issued and outstanding Public Shares after the Initial Public Offering.
Additionally, upon consummation of the Business Combination, the Sponsor will transfer 1,380,000 Founder Shares to Millennium for the
same price originally paid for such shares. On March 16, 2021, the underwriter partially exercised the over-allotment option to purchase
3,000,000 additional Units and forfeited the remainder of its option; thus, an aggregate of 100,000 Founder Shares were forfeited and
cancelled by the Company.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Insiders and Millennium agreed not to transfer, assign or sell any of their Founder Shares (except to permitted transferees) until (i)
with respect to 25% of such shares, upon consummation of the Company’s initial Business Combination, (ii) with respect to 25% of
such shares, when the closing price of the Class A common stock exceeds $12.00 for any 20 trading days within a 30-trading day period
following the consummation of a Business Combination, (iii) with respect to 25% of such shares, when the closing price of the Class A
common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation of a Business Combination,
and (iv) with respect to 25% of such shares, when the closing price of the Class A common stock exceeds $17.00 for any 20 trading days
within a 30-trading day period following the consummation of a Business Combination or earlier, in any case, if, following a Business
Combination, the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results
in all of the public stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Private
Placement Units
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of 690,000 Private Placement Units, at
a price of $10.00 per Private Placement Unit, generating gross proceeds of $6.9 million. The Private Placement Units were purchased by
Millennium (345,000 Units) and one of the Company’s Sponsors, FTAC Parnassus Sponsor, LLC (345,000 Units).
Each
Private Placement Unit consists of one share of Class A common stock and one-fourth of one warrant (the “Private Placement Warrant”).
Each whole Private Placement Warrant is exercisable for one share of Class A common stock at a price of $11.50 per share. The proceeds
from the Private Placement Units were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company
does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units 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. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private
Placement Warrants.
Promissory
Note
On
January 15, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public
Offering pursuant to an unsecured promissory note (the “Note”). This Note was non-interest bearing and payable upon the closing
date of the Initial Public Offering. The Company borrowed approximately $67,000 under the Note and repaid the Note in full on March 16,
2021.
Working
Capital Loans
If
needed to finance transaction costs in connection with searching for a target business or consummating an intended initial Business Combination,
the Sponsor, officers, directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (the “Working
Capital Loans”). In the event that the initial Business Combination does not close, the Company may use a portion of the working
capital held outside the Trust Account to repay such loaned amounts, but no proceeds from the Trust Account would be used for such repayment.
Such loans would be evidenced by promissory notes. The notes would be paid upon consummation of the initial Business Combination, without
interest, or, at the lenders’ discretion, up to $1,500,000 of the Working Capital Loans may be converted upon consummation of the
Business Combination into additional private placement units at a conversion price of $10.00 per share. Such private placement units
will be issued on substantially identical terms to the Private Placement Units to be issued at the closing of the Initial Public Offering.
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. As of March 31, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Working Capital
Loans.
Administrative
Support Agreement
Commencing on the date
that the Company’s securities were first listed on NASDAQ through the earlier of the Company’s consummation of a Business
Combination and its liquidation, the Company agreed to pay the Sponsor or an affiliate of the Sponsor $20,000 per month for office space,
administrative and shared personnel support services. For the three months ended March 31, 2021, the Company incurred expenses of $20,000
under this agreement. As of March 31, 2021 and December 31, 2020, the Company had no accruals for services in connection with such agreement
on the accompanying condensed balance sheets. On June 8, 2021, the administrative services agreement was amended and restated to increase
the monthly charge from $20,000 to $27,500.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
5 — Commitments and Contingencies
Registration
Rights
The
holders of the Founder Shares, Private Placement Units (including securities contained therein) and the units that may be issued upon
conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants
or the warrants issued as part of the units upon conversion of the Working Capital Loans) were entitled to registration rights pursuant
to a registration rights agreement signed upon the effective date of the Initial Public Offering 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
are entitled to make up to three demands, excluding short form demands, that the Company register such securities for sale under the
Securities Act. In addition, the holders will have “piggy-back” registration rights to include such securities in other registration
statements filed by the Company and rights to require the Company to register for resale such securities pursuant to Rule 415 under the
Securities Act. However, the registration rights agreement provides that the Company would not permit any registration statement filed
under the Securities Act to become effective until termination of the applicable lock-up period. The registration rights agreement does
not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriter a 45-day option to purchase up to 3,300,000 additional Units to cover overallotments at the Initial Public
Offering price, less the underwriting discounts and commissions. On March 16, 2021, the underwriter partially exercised the over-allotment
option to purchase 3,000,000 Public Shares and forfeited the remainder of its option.
The
underwriter was entitled to a cash underwriting discount of 2.0% of the gross proceeds of the Initial Public Offering, or $4.4 million.
In addition, the underwriter was entitled to a deferred fee of (i) 4.0% of the gross proceeds of the initial 22,000,000 Units sold in
the Initial Public Offering, and (ii) 6.0% of the gross proceeds from the 3,000,000 Over-Allotment Units, for an aggregate of $10.6 million.
The deferred fee will become payable to the representative from the amounts held in the Trust Account solely in the event that the Company
completes a Business Combination, subject to the terms of the underwriting agreement.
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that
the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target
company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Note
6 — Stockholders’ Equity
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 designations, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of March
31, 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 60,000,000 shares of Class A common stock with a par value of $0.0001
per share. Holders of Class A common stock are entitled to one vote for each share. As of March 31, 2021 and December 31, 2020, there
were 2,918,642 and 0 shares of Class A common stock outstanding, respectively, excluding 22,771,358 and 0 shares of Class A common stock
subject to possible redemption, respectively, that were classified as temporary equity in the accompanying condensed balance sheets.
Class
B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001
per share. Holders of the Company’s Class B common stock are entitled to one vote for each common share. As of March 31, 2021 and
December 31, 2020, there were 8,563,333 and 8,663,333 shares of Class B common stock issued and outstanding, respectively (see Note 4).
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Holders
of Class B common stock will vote on the election of directors prior to the consummation of a Business Combination. Holders of Class
A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders
except as required by law.
The
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on
a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are
issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination,
the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders
of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed
issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal,
in the aggregate, on an as-converted basis, 25% of the sum of the total number of all shares of common stock issued and outstanding upon
completion of the Initial Public Offering, including Placement Shares, plus all shares of Class A common stock and equity-linked securities
issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be
issued, to any seller in a Business Combination).
Note 7
— Warrants
As
of March 31, 2021 and December 31, 2020, the Company had 6,250,000 and 0 Public Warrants and 172,500 and 0 Private Placement Warrants
outstanding, respectively.
Public
Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.
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 Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination
or earlier upon redemption or liquidation.
The
Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise for cash of a warrant and will have
no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of
Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying
its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of
Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered,
qualified or deemed to be exempt from the registration or qualifications requirements of the securities laws of the state of residence
of the registered holder of the warrants. Notwithstanding the foregoing, if a registration statement covering the shares of Class A common
stock issuable upon exercise of the Public Warrants has not been declared effective by the end of 60 business days following the closing
of a 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.
The
Company agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination,
the Company will use its best efforts to file with the SEC, and within 60 business days following a Business Combination to have declared
effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants
and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified
in the warrant agreement. The Company will use its best efforts to maintain the effectiveness of such registration statement, and a current
prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding
the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such
that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at
its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in
effect a registration statement, but will be required to use its best efforts to register or qualify the shares under applicable blue
sky laws to the extent an exemption is not available.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Once
the warrants become exercisable, the Company may redeem the Public Warrants:
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon not less than 30 days’
prior written notice of redemption to each warrant holder; and
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if, and only if, the reported
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 three trading days before the Company sends the notice of redemption to the warrant holders.
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If
and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register
or qualify the underlying securities for sale under all applicable state securities laws.
If
the Company calls the Public Warrants for redemption for cash, 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. Additionally, in no event will the Company be required
to net cash settle the warrants.
In
addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes
in connection with the closing of a Business Combination at an issue price 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 and in the case of any such issuance to the Sponsor
or its affiliates, without taking into account any Founder Shares held by the Insiders or such affiliates, as applicable, prior to such
issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 50% of the
total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the completion of a Business
Combination (net of redemptions), and (z) the volume-weighted average trading price of the shares of Class A common stock during the
20 trading day period starting on the trading day prior to the day on which the Company completes a Business Combination (such price,
the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to
be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will
be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued 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 respect to such warrants. Accordingly, the warrants may expire
worthless.
The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that
the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants are not transferable,
assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally,
the Private Placement Warrants are non-redeemable so long as they are held by the Sponsor, Millennium or their permitted transferees.
If the Private Placement Warrants are held by someone other than the Sponsor, Millennium or their permitted transferees, the Private
Placement Warrants will be exercisable by such holders on the same basis as the Public Warrants.
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
8 — Fair Value Measurements
The
following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of March
31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
Description
|
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - money market funds
|
|
$
|
250,001,028
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative warrant liabilities - Public warrants
|
|
|
|
|
|
|
|
|
|
$
|
8,312,500
|
|
Derivative warrant liabilities - Private placement warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
274,280
|
|
As
of December 31, 2020, there were no assets or liabilities that are measured at fair value on a recurring basis.
Transfers
to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and
3 during the three months ended March 31, 2021.
Level 1
assets include investments in money market funds that invest solely in U.S. Treasury securities. The Company uses inputs such as actual
trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of
its investments.
For
periods where no observable traded price was available, the fair value of the Public and Private Placement Warrants has been
estimated using a binomial lattice model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public
Warrants’ traded market price will be used as the fair value. The estimated fair value of the Public and Private Placement
Warrants, prior to Public Warrants being traded in an active market, was determined using Level 3 inputs. Inherent in a binomial
lattice model are assumptions related to the Unit price, expected volatility, risk-free interest rate, term to expiration, and
dividend yield. The Unit price is based on the publicly traded price of the Units as of the measurement date. The Company estimated
the volatility for the Public and Private Placement Warrants based on the implied volatility from the traded prices of warrants
issued by other special purpose acquisition companies. The risk-free interest rate is based on interpolated U.S. Treasury rates,
commensurate with a similar term to the Public and Private Placement Warrants. The term to expiration was calculated as the
contractual term of the Public and Private Placement Warrants, assuming one year to a Business Combination from the IPO date.
Finally, the Company does not anticipate paying a dividend.
The following table provides quantitative information
regarding Level 3 fair value measurements inputs at their measurement dates:
|
|
March 16,
2021
|
|
|
March 31,
2021
|
|
Exercise price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Stock price
|
|
$
|
9.75
|
|
|
$
|
9.60
|
|
Volatility
|
|
|
25.0% - 27.5
|
%
|
|
|
25.0% - 27.5
|
%
|
Term (years)
|
|
|
5.5
|
|
|
|
5.5
|
|
Risk-free rate
|
|
|
0.90
|
%
|
|
|
1.00
|
%
|
Dividend yield
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
FTAC PARNASSUS ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for the three months ended March 31,
2021 is summarized as follows:
Derivative warrant liabilities at beginning of period
|
|
$
|
-
|
|
Issuance of Public Warrants
|
|
|
8,625,000
|
|
Issuance of Private Warrants
|
|
|
284,630
|
|
Change in fair value of derivative warrant liabilities
|
|
|
(322,850
|
)
|
Derivative warrant liabilities at March 31, 2021
|
|
$
|
8,586,780
|
|
Note
9 — Subsequent Events
The
Company evaluated subsequent events and transactions that occurred up to the date unaudited condensed financial statements were available
to be issued. Based upon this review, except as set forth below, the Company did not identify any subsequent events that would have required
adjustment or disclosure in the unaudited condensed financial statements.
On June 8, 2021, the administrative services agreement
was amended and restated to increase the monthly charge for office space, administrative and shared personnel support services payable
to an affiliate of the Sponsor from $20,000 to $27,500.
Item 2.
|
Management’s Discussion
and Analysis of Financial Condition and Results of Operations.
|
References
to the “Company,” “FTAC Parnassus Acquisition Corp.,” “FTAC Parnassus,” “our,” “us”
or “we” refer to FTAC Parnassus Acquisition Corp. The following discussion and analysis of the Company’s financial
condition and results of operations should be read in conjunction with the unaudited interim condensed financial statements and the notes
thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking
statements that involve risks and uncertainties.
Cautionary
Note Regarding Forward-Looking Statements
This
Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us
that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “may,” “should,” “could,” “would,”
“expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,”
or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but
are not limited to, those described in our other SEC filings.
Overview
We
are a blank check company incorporated in Delaware on December 18, 2020. We were formed for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business
Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth
companies.
Our
sponsors are FTAC Parnassus Sponsor, LLC, and FTAC Parnassus Advisors, LLC, each a Delaware limited liability company (collectively,
the “Sponsor”). The registration statement for our Initial Public Offering was declared effective on March 11, 2021. On March
16, 2021, we consummated our Initial Public Offering of 25,000,000 units (the “Units” and, with respect to the Class A common
stock included in the Units offered, the “Public Shares”), including the issuance of 3,000,000 additional Units as a result
of the underwriter’s partial exercise of its over-allotment option (the “Over-Allotment Units”), at $10.00 per Unit,
generating gross proceeds of $250.0 million, and incurring offering costs of approximately $15.5 million, of which $10.6 million was
for deferred underwriting commissions.
Simultaneously
with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 690,000 units
(each, a “Private Placement Unit” and collectively, the “Private Placement Units”), at a price of $10.00 per
Private Placement Unit, generating gross proceeds of $6.9 million. The Private Placement Units were purchased by Millennium Management
LLC (“Millennium”) (345,000 Units) and one of the Company’s Sponsors, FTAC Parnassus Sponsor, LLC (345,000 Units).
Upon
the closing of the Initial Public Offering and the Private Placement, $250.0 million ($10.00 per Unit) of the net proceeds of the Initial
Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”) and
invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting certain conditions
under Rule 2a-7 of the Investment Company Act and that invest only in direct U.S. government obligations, until the earlier of: (i) the
consummation of a Business Combination; (ii) the redemption of any Public Shares in connection with a stockholder vote to amend our Amended
and Restated Certificate of Incorporation to modify the substance or timing of our obligation to redeem 100% of its Public Shares if
it does not complete an initial Business Combination within 24 months from the consummation of the Initial Public Offering, or March
16, 2023 (the “Combination Period”); or (iii) the distribution of the Trust Account, as described below, except that interest
earned on the Trust Account can be released to pay our tax obligations, if we are unable to complete an initial Business Combination
within the Combination Period or upon any earlier liquidation.
Our
management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale
of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. There is no assurance that the Company will be able to successfully effect a Business Combination. Nasdaq rules
provide that we must complete a Business Combination 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 deferred underwriting commissions and taxes payable on interest
earned on the Trust Account) at the time of signing a definitive agreement in connection with a Business Combination. We will only complete
a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act.
If
we are unable to consummate a Business Combination within the Combination Period, we will (i) cease all operations except for the
purposes of winding up; (ii) as promptly as reasonably possible but not 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 any
interest earned on the Trust Account not previously released to us to pay its tax obligations and up to $100,000 of interest 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 our remaining stockholders and our board of directors,
dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements
of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire
worthless if we fail to complete a Business Combination within the Combination Period.
Liquidity
and Capital Resources
As
of March 31, 2021, we had approximately $1.5 million in our operating bank account, and working capital of approximately $1.9 million.
Our
liquidity needs prior to the Initial Public Offering were satisfied through a payment of $25,000 from the Sponsor to purchase the Founder
Shares, the loan of approximately $67,000 from the Sponsor under the Note (as defined in Note 4 to the unaudited interim condensed financial
statements), and the proceeds from the consummation of the Private Placement not held in the Trust Account. We repaid the Note in full
on March 16, 2021. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate
of the Sponsor, or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans (as defined
in Note 4 to the unaudited interim condensed financial statements). As of March 31, 2021 and December 31, 2020, there were no amounts
outstanding under any Working Capital Loans.
Based
on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from our Sponsor or an affiliate
of our Sponsor, or certain of our officers and directors to meet its needs through the earlier of the consummation of a Business Combination
or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and
evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for
travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business
Combination.
Management
continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that
the virus could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific
impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Results
of Operations
Our
entire activity since inception up to March 31, 2021 was in preparation for our formation and the Initial Public Offering, and, subsequent
to the Initial Public Offering, identifying a target company for a Business Combination. We will not be generating any operating revenues
until the closing and completion of our initial Business Combination.
For the three months ended March 31, 2021,
we had net loss of approximately $0.3 million, which consisted of approximately $0.3 million non-operating gain resulting
from the change in fair value of derivative warrant liabilities and approximately $1,000 of income from investments held in trust account,
offset by approximately $0.1 million in general and administrative expenses, and approximately $0.5 million in offering costs associated
with derivative warrant liabilities.
Contractual
Obligations
Administrative
Support Agreement
Commencing on the date
that the Company’s securities were first listed on Nasdaq through the earlier of our consummation of a Business Combination and
its liquidation, we agreed to pay the Sponsor or an affiliate of the Sponsor $20,000 per month for office space, administrative and shared
personnel support services. On June 8, 2021, the administrative services agreement was amended and restated to increase the monthly charge
for office space, administrative and shared personnel support services payable to an affiliate of the Sponsor from $20,000 to $27,500.
We
incurred approximately $20,000 in general and administrative expenses in the accompanying unaudited condensed statements of operations
for the three months ended March 31, 2021. We did not have an accrual related to this agreement as of March 31, 2021 and December 31,
2020.
Registration
Rights
The
holders of the Founder Shares, Private Placement Units (including securities contained therein) and the units that may be issued upon
conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants
or the warrants issued as part of the units upon conversion of the Working Capital Loans) were entitled to registration rights pursuant
to a registration rights agreement signed upon the effective date of the Initial Public Offering requiring us 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 are entitled
to make up to three demands, excluding short form demands, that we register such securities for sale under the Securities Act. In addition,
the holders will have “piggy-back” registration rights to include such securities in other registration statements filed
by us and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However,
the registration rights agreement provides that we would not permit any registration statement filed under the Securities Act to become
effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidating damages
or other cash settlement provisions resulting from delays in registering our securities. We will bear the expenses incurred in connection
with the filing of any such registration statements.
Underwriting
Agreement
We
granted the underwriter a 45-day option to purchase up to 3,300,000 additional Units to cover overallotments at the Initial Public Offering
price, less the underwriting discounts and commissions. On March 16, 2021, the underwriter partially exercised the over-allotment option
to purchase 3,000,000 Public Shares and forfeited the remainder of its option.
The
underwriter was entitled to a cash underwriting discount of 2.0% of the gross proceeds of the Initial Public Offering, or $4.4 million.
In addition, the underwriter was entitled to a deferred fee of (i) 4.0% of the gross proceeds of the initial 22,000,000 Units sold in
the Initial Public Offering, and (ii) 6.0% of the gross proceeds from the 3,000,000 Over-Allotment Units, for an aggregate of $10.6 million.
The deferred fee will become payable to the representative from the amounts held in the Trust Account solely in the event that the Company
completes a Business Combination, subject to the terms of the underwriting agreement.
Critical
Accounting Policies
Class A
Common Stock Subject to Possible Redemption
The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A common
stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally
redeemable Class A common stock (including shares of Class A common stock that feature 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) are classified
as temporary equity. At all other times, Class A common stock are classified as stockholders’ equity. 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 occurrence
of uncertain future events. Accordingly, as of March 31, 2021, 22,771,358 shares of Class A common stock subject to possible redemption
at the redemption amount were presented at redemption value as temporary equity, outside of the stockholders’ equity section of
the Company’s condensed balance sheets.
Net
Income (Loss) Per Share of Common Stock
Net
income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common
stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and
Private Placement to purchase an aggregate of 6,422,500 shares of the Company’s common stock in the calculation of diluted loss
per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants
would be anti-dilutive.
The Company’s unaudited condensed
statement of operations includes a presentation of income (loss) per share for common stock subject to redemption in a manner
similar to the two-class method of income per share. Net income per share, basic and diluted for Class A redeemable common stock for
the three months ended March 31, 2021 is calculated by dividing the income investments held in the Trust Account of approximately
$1,000, net of applicable franchise taxes of approximately $1,000 for the three months ended March 31, 2021, by the weighted average
number of shares of Class A redeemable common stock outstanding for the period. Net loss per share, basic and diluted for Class A
and Class B non-redeemable common stock for the three months ended March 31, 2021 is calculated by dividing net loss, less amounts
attributed to Class A redeemable common stock, by the weighted average number of shares of Class A and Class B non-redeemable common
stock outstanding for the period. The weighted average non-redeemable common stock at March 31, 2021 includes the effect of 690,000
Private Placement Units, which were issued in conjunction with the Initial Public Offering.
Recent
Accounting Pronouncements
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 Company adopted ASU 2020-06 on January 1, 2021.
Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
The
Company’s management does not believe that any other recently issued, but not yet effective, accounting standards updates, if currently
adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Off-Balance
Sheet Arrangements
As
of March 31, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS
Act
The
Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act
are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.
We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised
accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result,
the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company
effective dates.
Additionally,
we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject
to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions
we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over
financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted
by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about
the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items
such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee
compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until
we are no longer an “emerging growth company,” whichever is earlier.