Amended Annual Report (10-k/a)
24 March 2022 - 7:05AM
Edgar (US Regulatory)
trueFYAthlon Acquisition Corp.0001828914--12-31MA 0001828914 2021-01-01 2021-12-31 0001828914 2021-12-31 0001828914 2020-12-31 0001828914 2020-10-06 2020-12-31 0001828914 2021-01-14 2021-01-14 0001828914 2021-01-14 0001828914 2021-06-30 0001828914 2020-10-05 0001828914 us-gaap:CapitalUnitsMember 2021-01-01 2021-12-31 0001828914 us-gaap:CommonClassAMember 2021-01-01 2021-12-31 0001828914 us-gaap:WarrantMember 2021-01-01 2021-12-31 0001828914 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-12-31 0001828914 us-gaap:RetainedEarningsMember 2021-01-01 2021-12-31 0001828914 us-gaap:USTreasurySecuritiesMember 2021-01-01 2021-12-31 0001828914 swet:SharePriceMoreThanOrEqualsToUsdTenPointZeroMember 2021-01-01 2021-12-31 0001828914 swet:SharePriceMoreThanOrEqualsToUsdEighteenMember 2021-01-01 2021-12-31 0001828914 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-01-01 2021-12-31 0001828914 us-gaap:CommonClassBMember 2021-01-01 2021-12-31 0001828914 us-gaap:CommonClassAMember us-gaap:OverAllotmentOptionMember 2021-01-01 2021-12-31 0001828914 us-gaap:IPOMember us-gaap:CommonClassAMember 2021-01-01 2021-12-31 0001828914 us-gaap:CommonClassAMember swet:RedeemableCommonStockMember 2021-01-01 2021-12-31 0001828914 us-gaap:CommonClassBMember 2020-12-31 0001828914 swet:PublicWarrantMember 2020-12-31 0001828914 swet:PrivatePlacementWarrantsMember 2020-12-31 0001828914 swet:WorkingCapitalLoansMember 2020-12-31 0001828914 us-gaap:CommonClassAMember 2020-12-31 0001828914 us-gaap:ForeignCountryMember 2020-12-31 0001828914 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2020-10-06 2020-12-31 0001828914 us-gaap:AdditionalPaidInCapitalMember 2020-10-06 2020-12-31 0001828914 us-gaap:RetainedEarningsMember 2020-10-06 2020-12-31 0001828914 us-gaap:CommonClassBMember 2020-10-06 2020-12-31 0001828914 us-gaap:OverAllotmentOptionMember us-gaap:CommonClassAMember 2021-01-14 2021-01-14 0001828914 us-gaap:IPOMember us-gaap:CommonClassAMember 2021-01-14 2021-01-14 0001828914 swet:PrivatePlacementWarrantsMember swet:SponsorMember 2021-01-14 2021-01-14 0001828914 us-gaap:OverAllotmentOptionMember swet:PrivatePlacementWarrantsMember swet:SponsorMember 2021-01-14 2021-01-14 0001828914 swet:UnsecuredPromissoryNoteMember swet:SponsorMember 2021-01-14 2021-01-14 0001828914 us-gaap:IPOMember us-gaap:CommonClassAMember 2021-01-14 0001828914 us-gaap:OverAllotmentOptionMember swet:PrivatePlacementWarrantsMember swet:SponsorMember 2021-01-14 0001828914 us-gaap:IPOMember 2021-01-14 0001828914 swet:PrivatePlacementWarrantsMember swet:SponsorMember 2021-01-14 0001828914 srt:ScenarioPreviouslyReportedMember 2021-01-14 0001828914 srt:RestatementAdjustmentMember 2021-01-14 0001828914 swet:AsRestartedMember 2021-01-14 0001828914 srt:ScenarioPreviouslyReportedMember us-gaap:CommonClassAMember 2021-01-14 0001828914 srt:RestatementAdjustmentMember us-gaap:CommonClassAMember 2021-01-14 0001828914 us-gaap:CommonClassAMember swet:AsRestartedMember 2021-01-14 0001828914 us-gaap:CommonClassBMember 2021-12-31 0001828914 us-gaap:CommonClassAMember 2021-12-31 0001828914 swet:SponsorMember swet:SharePriceEqualsOrExceeds12UsdMember 2021-12-31 0001828914 us-gaap:USTreasurySecuritiesMember 2021-12-31 0001828914 swet:PrivatePlacementWarrantsMember 2021-12-31 0001828914 swet:PublicWarrantMember 2021-12-31 0001828914 srt:MinimumMember 2021-12-31 0001828914 swet:DefinitiveAgreementOfInitialBusinessCombinationMember srt:MinimumMember 2021-12-31 0001828914 us-gaap:CommonClassAMember swet:SharePriceMoreThanOrEqualsToUsdTenPointZeroMember 2021-12-31 0001828914 swet:SharePriceMoreThanOrEqualsToUsdEighteenMember us-gaap:CommonStockMember 2021-12-31 0001828914 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-12-31 0001828914 swet:SharePriceMoreThanOrEqualsToUsdEighteenMember us-gaap:CommonClassAMember 2021-12-31 0001828914 swet:SharePriceMoreThanOrEqualsToUsdTenPointZeroMember 2021-12-31 0001828914 swet:SharePriceMoreThanOrEqualsToUsdEighteenMember 2021-12-31 0001828914 us-gaap:CommonStockMember swet:SharePriceLessThanOrEqualsToUsdNinePointTwoMember 2021-12-31 0001828914 us-gaap:IPOMember us-gaap:CommonClassAMember 2021-12-31 0001828914 us-gaap:CommonClassAMember swet:PublicWarrantsMember 2021-12-31 0001828914 swet:WorkingCapitalLoansMember 2021-12-31 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001828914 swet:WarrantLiabilityPublicWarrantsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001828914 swet:UsTreasurySecuritiesMoneyMarketFundMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-12-31 0001828914 srt:ScenarioPreviouslyReportedMember 2021-12-31 0001828914 srt:ScenarioPreviouslyReportedMember srt:MinimumMember 2021-12-31 0001828914 us-gaap:ForeignCountryMember 2021-12-31 0001828914 srt:ScenarioForecastMember 2023-01-14 2023-01-14 0001828914 us-gaap:CommonClassBMember swet:SponsorMember 2020-10-13 2020-10-13 0001828914 swet:ChiefExecutiveOfficerAndIndependentDirectorsMember swet:FounderSharesMember 2020-10-31 2020-10-31 0001828914 swet:ChiefExecutiveOfficerAndIndependentDirectorsMember swet:FounderSharesMember 2020-10-31 0001828914 us-gaap:CommonClassBMember 2021-01-11 2021-01-11 0001828914 swet:SponsorMember swet:AdministrativeServicesAgreementMember 2021-01-11 2021-01-11 0001828914 swet:FounderSharesMember swet:SponsorMember 2021-01-11 0001828914 us-gaap:CommonClassBMember swet:SponsorMember 2021-01-11 0001828914 us-gaap:OverAllotmentOptionMember swet:FounderSharesMember 2021-01-11 0001828914 swet:SponsorMember swet:SharePriceEqualsOrExceeds12UsdMember 2021-04-01 2021-06-30 0001828914 swet:WarrantLiabilitiesMember 2021-04-01 2021-06-30 0001828914 swet:WarrantLiabilityPublicWarrantsMember 2021-04-01 2021-06-30 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember 2021-04-01 2021-06-30 0001828914 swet:SponsorMember swet:AdministrativeServicesAgreementMember 2021-07-01 2021-09-30 0001828914 swet:SponsorMember swet:UnsecuredPromissoryNoteMember 2020-10-09 0001828914 swet:WarrantLiabilitiesMember 2021-01-01 2021-03-31 0001828914 swet:WarrantLiabilityPublicWarrantsMember 2021-01-01 2021-03-31 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember 2021-01-01 2021-03-31 0001828914 swet:WarrantLiabilitiesMember 2021-07-01 2021-12-31 0001828914 swet:WarrantLiabilityPublicWarrantsMember 2021-07-01 2021-12-31 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember 2021-07-01 2021-12-31 0001828914 us-gaap:CommonClassAMember 2022-03-01 0001828914 us-gaap:CommonClassBMember 2022-03-01 0001828914 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-12-31 0001828914 us-gaap:RetainedEarningsMember 2021-12-31 0001828914 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001828914 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2020-10-05 0001828914 us-gaap:AdditionalPaidInCapitalMember 2020-10-05 0001828914 us-gaap:RetainedEarningsMember 2020-10-05 0001828914 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2020-12-31 0001828914 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001828914 us-gaap:RetainedEarningsMember 2020-12-31 0001828914 swet:WarrantLiabilitiesMember 2021-06-30 0001828914 swet:WarrantLiabilityPublicWarrantsMember 2021-06-30 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember 2021-06-30 0001828914 swet:WarrantLiabilitiesMember 2020-12-31 0001828914 swet:WarrantLiabilityPublicWarrantsMember 2020-12-31 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember 2020-12-31 0001828914 swet:WarrantLiabilitiesMember 2021-03-31 0001828914 swet:WarrantLiabilityPublicWarrantsMember 2021-03-31 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember 2021-03-31 0001828914 swet:WarrantLiabilitiesMember 2021-12-31 0001828914 swet:WarrantLiabilityPublicWarrantsMember 2021-12-31 0001828914 swet:WarrantLiabilityPrivatePlacementWarrantsMember 2021-12-31 xbrli:shares iso4217:USD utr:Day utr:Month xbrli:pure iso4217:USD xbrli:shares
SECURITIES AND EXCHANGE COMMISSION
☒
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2021
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number
001-39870
(Exact name of registrant as specified in its charter)
|
|
|
|
|
|
(State or Other Jurisdiction |
|
|
c/o Causeway Media Partners |
|
|
(Address of principal executive offices) |
|
|
(Issuer’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
| |
|
|
|
|
Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant |
|
|
|
The Nasdaq Stock Market LLC |
Class A common stock, par value $0.0001 per share |
|
|
|
The Nasdaq Stock Market LLC |
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 |
|
|
|
The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☑
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
|
|
|
|
|
|
|
Large accelerated filer |
|
☐ |
|
Accelerated filer |
|
☐ |
| |
|
|
|
Non-accelerated filer |
|
☑ |
|
Smaller reporting company |
|
☑ |
| |
|
|
|
| |
|
|
|
Emerging growth company |
|
☑ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act). Yes ☑ No ☐
The aggregate market value of the voting stock held by
non-affiliates
of the registrant on June 30, 2021, computed by reference to the closing price for such stock on the Nasdaq Stock Market on such date, was $269,376,000.
As of March 1, 2022, 27,600,000 shares of Class A common stock, par value $0.0001 per share, and 6,900,000 shares of Class B common stock, par value $0.0001 per share, were outstanding.
Documents Incorporated by Reference: None.
|
|
|
|
|
| |
|
Auditor Name: WithumSmith+Brown, PC |
|
Auditor Location: New York, New York |
Athlon Acquisition Corp. (the “Company”) is filing this Amendment No. 1 on Form
10-K/A
(the “First Amendment”) to amend the Company’s Form
10-K
(the “Original
10-K”)
filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 4, 2022 (the “Annual Report”). This Amendment No. 1 is being filed by the Company to correct a typographical error in the Report of Independent Registered Public Accounting Firm, included as part of the Financial Statements to the Original
10-K,
which inadvertently omitted a reference to the 2020 comparative year. No changes have been made to the Financial Statements included with the Original
10-K
and the related notes. This Amendment No. 1 is also being filed by the Company to update Item 9A. of Part II and Item 12 of Part III of the Original
10-K.
Except as described above, no other changes have been made to the
Original 10-K. The
Original 10-K continues
to speak as of the dates described in the
Original 10-K, and
we have not updated the disclosures contained therein to reflect any events that occurred subsequent to such dates. Accordingly, this Amendment should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the
Original 10-K, as
information in such filings may update or supersede certain information contained in this Amendment.
Item 8. Financial Statements and Supplementary Data
This information appears following Item 15 of this Report and is included herein by reference.
Item 9A. Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules
13a-15
and
15d-15
under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e)
and
15d-15(e)
under the Exchange Act) were not effective, due to the material weakness in our internal control over financial reporting related to the Company’s accounting for complex financial instruments. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form
10-K
present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
Management’s Report on Internal Controls Over Financial Reporting
Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule
13a-15(f)
under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: (1) pertain to the maintenance of records that accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Our management, under the supervision of and with the participation of the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“the COSO criteria”).
Based on our assessment under the COSO criteria, management concluded that our system of internal control over financial reporting was not effective due to the material weaknesses described above. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form
10-K
present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
Changes in Internal Control over Financial Reporting.
The Company has made changes in its internal control over financial reporting to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our condensed consolidated financial statements, including providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The Company can offer no assurance that these changes will ultimately have the intended effects.
Inherent Limitations on Effectiveness of Disclosure Controls and Procedures
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information regarding the beneficial ownership of our common stock by:
| |
• |
|
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
| |
• |
|
each of our officers and directors; and |
| |
• |
|
all of our officers and directors as a group. |
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record of beneficial ownership of the warrants included in the units offered in the IPO or the Private Placement Warrants as the warrants are not exercisable within 60 days of the date hereof.
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner (1) |
|
Amount and Nature of Beneficial Ownership (2)(4) |
|
|
Approximate
Percentage
of
Outstanding
Shares |
|
AAC HoldCo, LLC (our Sponsor) (3) |
|
|
6,330,000 |
|
|
|
18.4 |
% |
| |
|
|
6,330,000 |
|
|
|
18.4 |
% |
| |
|
|
450,000 |
|
|
|
1.3 |
% |
| |
|
|
— |
|
|
|
— |
|
| |
|
|
30,000 |
* |
|
|
|
|
| |
|
|
30,000 |
* |
|
|
|
|
| |
|
|
30,000 |
* |
|
|
|
|
| |
|
|
30,000 |
* |
|
|
|
|
All executive officers and directors as a group (seven individuals) |
|
|
6,900,000 |
|
|
|
20 |
% |
| |
|
|
2,100,569 |
|
|
|
7.61 |
% |
| Empyrean Capital Partners, LP (6) |
|
|
1,450,000 |
|
|
|
5.3 |
% |
| (1) |
Unless otherwise noted, the business address of each of the following is c/o Athlon Acquisition Corp., 44 Brattle St., Cambridge, MA 02138. |
| (2) |
Interests shown consist solely of Founder Shares, classified as Class B common stock. Such shares will automatically convert into Class A common stock concurrently with or immediately following the consummation of our Initial Business Combination on a basis, subject to adjustment. |
| (3) |
AAC HoldCo, LLC is the record holder of the shares reported herein. Causeway Media Partner II, L.P. is the sole member of AAC HoldCo, LLC. Mr. Wan, by virtue of his shared control over our sponsor, may be deemed to beneficially own shares held by our sponsor. |
| (4) |
Does not include any shares indirectly owned by this individual as a result of his ownership interest in our sponsor. |
| (5) |
Based solely on information reported on a Schedule 13G filed with the SEC on February 14, 2022 and which information may not be current as of March 23, 2022, Glazer Capital, LLC (“Glazer Capital”) and Paul J. Glazer (“Mr. Glazer”) have shared voting power over 2,100,569 shares of common stock and shared dispositive power over 2,100,569 shares of common stock. Glazer Capital serves as investment manager to certain funds and managed accounts (collectively, the “Glazer Funds”), with respect to the common stock directly held by the Glazer Funds. Glazer Capital has the authority to dispose of and vote the shares of common stock directly held by the Glazer Funds. Mr. Glazer is the Managing Member of Glazer Capital, with respect to the common stock directly held by the Glazer Funds. The address of the reporting parties is 350 West 55 th Street, Suite 30A, New York, New York 10019. |
| (6) |
Based solely on information reported on a Schedule 13G filed with the SEC on January 25, 2021 and which information may not be current as of March 23, 2022, Empyrean Capital Overseas Master Fund, Ltd. (“ECOMF”), Empyrean Capital Partners, LP (“ECP”) and Amos Meron (“Mr. Meron”) have shared voting power over 1,450,000 shares of common stock and shared dispositive power over 1,450,000 shares of common stock. Empyrean Capital Partners, LP (“ECP”) serves as investment manager to ECOMF, with respect to the common stock directly held by the ECOMF. ECP has the authority to dispose of and vote the shares of common stock directly held by the ECOMF. Mr. Meron is the managing member of Empyrean Capital, LLC, the general partner of ECP, with respects to the common stock directly held by the ECOMF. The address of the reporting parties is 10250 Constellation Boulevard, Suite 2950, Los Angeles, A 90067. |
The Founder Shares, Private Placement Warrants, and any shares of Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to
lock-up
provisions in the agreements entered into by our initial stockholders. Those
lock-up
provisions provide that such securities are not transferable or salable (i) in the case of the Founder Shares, until the earlier of (A) one year after the completion of our Initial Business Combination or earlier if, subsequent to our Initial Business Combination, the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading
day period commencing at least 150 days after our Initial Business Combination and (B) the date following the completion of our Initial Business Combination on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their Class A common stock for cash, securities or other property and (ii) in the case of the Private Placement Warrants and the respective shares of Class A common stock underlying such warrants, until 30 days after the completion of our Initial Business Combination except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members or partners of our sponsor or their affiliates (including members of our sponsor’s members), any affiliates of our sponsor, or any employees of such affiliates, (b) in the case of an individual, by gift to a member of such person’s immediate family or to a trust, the beneficiary of which is a member of such person’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of such person; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the Private Placement Warrants or shares of Class A common stock, as applicable, were originally purchased; (f) by virtue of the laws of the State of Delaware or our Sponsor’s organizational documents upon liquidation or dissolution of our sponsor, (g) to the company for no value for cancellation in connection with the consummation of our Initial Business Combination; (h) in the event of our liquidation prior to our consummation of our Initial Business Combination; or (i) in the event of our completion of a liquidation, merger, capital stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their common stock for cash, securities or other property subsequent to the completion of our Initial Business Combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
Our executive officers and AAC HoldCo, LLC, our Sponsor, are our “promoters,” as that term is defined under the federal securities laws.
Equity Compensation Plans
As of December 31, 2021, we had no compensation plans (including individual compensation arrangements) under which equity securities of the registrant were authorized for issuance.
Item 15. Exhibits, Financial Statement Schedules
(a) The following documents are filed as part of this Form
10-K:
(1) Financial Statements:
|
|
|
|
|
| |
|
|
|
Report of Independent Registered Public Accounting Firm |
|
|
F-2 |
|
| |
|
|
F-3 |
|
| |
|
|
F-4 |
|
Statements of Changes in Stockholders’ (Deficit) Equity |
|
|
F-5 |
|
| |
|
|
F-6 |
|
Notes to Financial Statements |
|
|
F-7 |
|
(2) Financial Statement Schedules:
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.
|
|
|
| |
|
|
| |
|
| 101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| |
|
| 101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
| |
|
| 101.CAL |
|
Inline XBRL Taxonomy Calculation Linkbase Document |
| |
|
| 101.DEF |
|
Inline XBRL Taxonomy Definition Linkbase Document |
| |
|
| 101.LAB |
|
Inline XBRL Taxonomy Label Linkbase Document |
| |
|
| 101.PRE |
|
Inline XBRL Taxonomy Presentation Linkbase Document |
| |
|
| 104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS) |
| * |
Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 15, 2021 |
| ** |
Incorporated by reference to the Company’s Registration Statement on Form S-1 (SEC File No. 333-251605). |
| *** |
Filed with the Original 10-K. |
Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 23rd day of March, 2022.
|
|
|
|
| |
|
| By: |
|
|
| Name: |
|
Chris Hickey |
| Title: |
|
Chief Executive Officer |
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Athlon Acquisition Corp. (the “Company”) as of December 31, 2021 and 2020 and the related statements of operations, changes in stockholders’ (deficit) equity and cash flows for the year ended December 31, 2021 and for the period from October 6, 2020 (inception) through December 31, 2020 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 and for the period from October 6, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Restatement of Previously Issued Financial Statement
As described in Note 2 to the financial statements, the Company’s previously issued January 14, 2021 financial statement has been restated herein to correct certain misstatements.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by January 14, 2023 then the Company will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
|
/s/ WithumSmith+Brown, PC |
| We have served as the Company’s auditor since 2020. |
| New York, New York |
| |
| PCAOB #100 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
$ |
666,122 |
|
|
$ |
4,457 |
|
| |
|
|
275,000 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
941,122 |
|
|
|
4,457 |
|
| |
|
|
— |
|
|
|
192,370 |
|
Investments held in Trust Account |
|
|
276,039,258 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
726,537 |
|
|
$ |
2,241 |
|
| |
|
|
— |
|
|
|
111,827 |
|
Promissory note – related party |
|
|
— |
|
|
|
60,000 |
|
| |
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
|
726,537 |
|
|
|
174,068 |
|
| |
|
|
12,789,868 |
|
|
|
— |
|
Deferred underwriting fee payable |
|
|
9,660,000 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption, $0.0001 par value; 27,600,000 and no shares issued and outstanding at $10.00 per share redemption value as of December 31, 2021 and 2020, respectively |
|
|
276,000,000 |
|
|
|
— |
|
Stockholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding |
|
|
— |
|
|
|
— |
|
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; none issued or outstanding |
|
|
|
|
|
|
|
|
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 6,900,000 shares issued and outstanding as of December 31, 2021 and 2020 |
|
|
690 |
|
|
|
690 |
|
Additional paid-in capital |
|
|
— |
|
|
|
24,310 |
|
| |
|
|
(22,196,715 |
) |
|
|
(2,241 |
) |
| |
|
|
|
|
|
|
|
|
Total Stockholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
he accompanying notes are an integral part of the financial statements.
|
|
|
|
|
|
|
|
|
| |
|
Year Ended
December 31,
2021 |
|
|
For the
Period from
October 6,
2020
(Inception)
through
December 31,
2020 |
|
Formation and operational costs |
|
$ |
1,338,412 |
|
|
$ |
2,241 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Change in fair value of warrant liabilities |
|
|
3,626,532 |
|
|
|
— |
|
Transaction costs incurred in connection with warrant liabilities |
|
|
(611,630 |
) |
|
|
— |
|
Interest earned on investments held in Trust Account |
|
|
39,258 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
3,054,160 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class A common stock |
|
|
27,600,000 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
Basic and diluted income per share, Class A common stock |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding, Class B common stock |
|
|
6,865,479 |
|
|
|
6,000,000 |
|
| |
|
|
|
|
|
|
|
|
Basic net income per share, Class B common stock |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding, Class B common stock |
|
|
6,900,000 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
Diluted net income per share, Class B common stock |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Balance —October 6, 2020 (inception) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Class B common stock to Sponsor |
|
|
6,900,000 |
|
|
|
690 |
|
|
|
24,310 |
|
|
|
— |
|
|
|
25,000 |
|
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,241 |
) |
|
|
(2,241 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance —December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid in excess of fair value for Private Placement Warrants |
|
|
— |
|
|
|
— |
|
|
|
1,729,600 |
|
|
|
— |
|
|
|
1,729,600 |
|
Accretion for Class A common stock subject to redemption amount |
|
|
— |
|
|
|
— |
|
|
|
(1,753,910 |
) |
|
|
(23,910,222 |
) |
|
|
(25,664,132 |
) |
| |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,715,748 |
|
|
|
1,715,748 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance —December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
For the
Period from
October 6,
2020
(Inception)
through
December 31 |
|
| |
|
|
|
|
|
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
| |
|
$ |
1,715,748 |
|
|
$ |
(2,241 |
) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Interest earned on marketable securities held in Trust Account |
|
|
(39,258 |
) |
|
|
— |
|
Change in fair value of warrant liabilities |
|
|
(3,626,532 |
) |
|
|
— |
|
Transaction costs incurred in connection with warrant liabilities |
|
|
611,630 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| |
|
|
(275,000 |
) |
|
|
— |
|
Accounts payable and accrued expenses |
|
|
724,296 |
|
|
|
2,241 |
|
| |
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Investment of cash in Trust Account |
|
|
(276,000,000 |
) |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of Class B common stock to Sponsor |
|
|
— |
|
|
|
25,000 |
|
Proceeds from sale of Units, net of underwriting discounts paid |
|
|
270,480,000 |
|
|
|
— |
|
Proceeds from sale of Private Placement Warrants |
|
|
7,520,000 |
|
|
|
— |
|
Proceeds from promissory notes – related party |
|
|
20,000 |
|
|
|
60,000 |
|
Repayment of promissory notes – related party |
|
|
(80,000 |
) |
|
|
— |
|
Payment of offering costs |
|
|
(389,219 |
) |
|
|
(80,543 |
) |
| |
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
4,457 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Offering costs included in accrued offering costs |
|
$ |
— |
|
|
$ |
111,827 |
|
| |
|
|
|
|
|
|
|
|
Accretion for Class A common stock to redemption amount |
|
$ |
25,664,132 |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
Deferred underwriting fee payable |
|
$ |
9,660,000 |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Athlon Acquisition Corp. (the “Company”) a blank check company was incorporated in Delaware on October 6, 2020. The Company was formed for the purpose of effecting the merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2021, the Company had not commenced any operations. All activity from inception through December 31, 2021 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is 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 the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Investment held in Trust Account (defined below).
The registration statement for the Company’s Initial Public Offering was declared effective on January 11, 2021. On January 14, 2021 the Company consummated the Initial Public Offering of 27,600,000 units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276,000,000 which is described in Note
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 7,520,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to AAC HoldCo, LLC (the “Sponsor”), generating gross proceeds of $7,520,000, which is described in Note
5
.
Transaction costs amounted to $15,649,762, consisting of $5,520,000 in cash underwriting fees, $9,660,000 of deferred underwriting fees and $469,762 of other offering costs.
Following the closing of the Initial Public Offering on January 14, 2021, an amount of $276,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the United States and was invested only in 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 in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.
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 Private Placement Warrants, 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 complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding any deferred underwriting fees and taxes payable on the interest earned on the Trust Account). 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 business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company will provide the holders of the outstanding Public Shares (the “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. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 following any related redemptions and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “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 applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other 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 has agreed to vote its Founder Shares (as defined in Note
6
) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by January 14, 2023 and (c) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period.
The Company will have until January 14, 2023 to complete a Business Combination (the “Combination Period”). If the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but 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 interest earned on the funds held in the Trust Account and not previously released to pay taxes (less 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), 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.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for s
e
rvices rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered public accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity and Going Concern
As of December 31, 2021, the Company had $666,122 in its operating bank accounts, $276,039,258 in investments held in the Trust Account to be used for a Business Combination or to repurchase or redeem its Class A common stock in connection therewith and working capital of $214,585. As of December 31, 2021, approximately $39,000 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations.
Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until January 14, 2023 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date and an extension not requested by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the mandatory liquidation, should a Business Combination not occur and an extension is not requested by the Sponsor, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after January 14, 2023.
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The Company previously accounted for its outstanding Public Warrants and Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering as
components of equity instead of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of stock, all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).
In further consideration of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s common stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the tender offer provision fails the “classified in stockholders’ equity” criteria as contemplated by ASC Section 815-40-25.
In accordance with ASC Topic 340, Other Assets and Deferred Costs, as a result of the classification of the warrants as derivative liabilities, the Company expensed a portion of the offering costs originally recorded as a reduction in equity. The portion of offering costs that was expensed was determined based on the relative fair value of the Public Warrants and shares of Class A common stock included in the Units.
As a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statement as of January 14th, 2021. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period as well as re-evaluate the treatment of the warrants and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.
In connection with the preparation of the Company’s financial statements as of September 30, 2021, management determined it should restate its previously reported financial statements. The Company determined that at the closing of the Company’s Initial Public Offering (including the sale of the shares issued pursuant to the exercise of the underwriters’ overallotment) it had improperly classified its Class A common stock subject to possible redemption at the closing of the Company’s Initial Public Offering and the closing of the sale of shares pursuant to the exercise of the underwriters’ overallotment, it had improperly classified certain of its Class A common stock subject to possible redemption. The Company previously determined the Class A common stock subject to possible redemption to be equal to the redemption value of $ 10.00 per Class A common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A common stock issued during the Initial Public Offering and pursuant to the exercise of the underwriters’ overallotment can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that temporary equity should include all Class A common stock subject to possible redemption, resulting in the Class A common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A common stock.
In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the changes and has determined that the related impact was
material to the previously issued audited balance sheet included in the Company’s Current Report on Form 8-K as of January 14, 2021, filed with the SEC on January 21, 2021 (the “Affected Financial Statement”) and such the Affected Financial Statement should no longer be relied upon. Therefore, the Company, in consultation with its Audit Committee, concluded that its Affected Financial Statement should be restated to classify the warrants as derivative liabilities and report all Public Shares as temporary equity. As such the Company is reporting this restatement to the Affected Financial Statement in this Current Report on Form 10K.
The impact of the restatement on the Company’s balance sheet is reflected in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of January 14, 2021 |
|
|
|
|
|
|
|
|
|
| |
|
$ |
— |
|
|
$ |
16,416,400 |
|
|
$ |
16,416,400 |
|
Class A common stock subject to possible redemption |
|
$ |
246,471,930 |
|
|
$ |
29,528,071 |
|
|
$ |
276,000,001 |
|
| |
|
$ |
295 |
|
|
$ |
(295 |
) |
|
$ |
— |
|
Additional paid-in capital |
|
$ |
5,617,553 |
|
|
$ |
(5,617,553 |
) |
|
$ |
— |
|
| |
|
$ |
(618,536 |
) |
|
$ |
(23,910,223 |
) |
|
$ |
(24,528,759 |
) |
Total Stockholders’ Equity (Deficit) |
|
$ |
5,000,002 |
|
|
$ |
(29,528,071 |
) |
|
$ |
(24,528,759 |
) |
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
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 of 2002, 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 a 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 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 which is neither
an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
The preparation of the financial statements in conformity with U.S. GAAP requires the Company’s 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 warrant liabilities. Such estimates may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2021 and December 31, 2020.
Marketable Securities Held in Trust Account
At December 31, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities.
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption are classified as a liability instrument and is measured at redemption value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ (deficit) equity section of the Company’s balance sheets.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period.
At December 31, 2021, the Class A common stock subject to possible redemption reflected in the balance sheet are reconciled in the following table:
|
|
|
|
|
|
|
$ |
276,000,000 |
|
|
|
|
|
|
Proceeds allocated to Public Warrants |
|
$ |
(10,626,000 |
) |
Class A common stock issuance costs |
|
|
(15,038,132 |
) |
|
|
|
|
|
Accretion of carrying value to redemption value |
|
$ |
25,664,132 |
|
| |
|
|
|
|
Class A common stock subject to possible redemption |
|
$ |
276,000,000 |
|
| |
|
|
|
|
Offering costs consisted of legal, accounting and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were 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 allocated to warrant liabilities were expensed as incurred in the statements of operations.
Offering costs associated with the Class A common stock issued were initially charged to temporary equity and then accreted to redemption value in stockholders’ equity on the completion of the Initial Public Offering. Offering costs in the amount of $15,038,132 were charged against the carrying value of the Class A common stock subject to possible redemption upon the completion of the Initial Public Offering. Offering costs amounting to $611,630 were charged to the statements of operations upon the completion of the Initial Public Offering (see Note 1).
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 FASB ASC Topic 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The Company accounts for the Public Warrants and Private Placement Warrants (together, the “Warrants”) in accordance with the guidance contained in ASC Topic 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the statements of operations. The Public Warrants (as defined in Note 5) for periods where no observable traded price was available were valued using the Binomial Lattice Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. The Private Placement Warrants after the detachment of the Public Warrants from the Units is valued using the quoted market price of the Public Warrant, as the make whole provision of Private Placement Warrants are the same as the Public Warrants. As such the Private Placement Warrants has substantially the same terms as the Public Warrants.
The Company follows the asset and liability method of accounting for income taxes under ASC Topic 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements 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 Topic 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. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2021 and 2020. 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.
Net Income (Loss) Per Common Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 21,320,000 Class A common stock in the aggregate. As of December 31, 2021, the Company had 900,000 Class B shares which are no longer subject to forfeiture which were included to calculate diluted shares outstanding. There were no other dilutive securities or other contracts that could, potentially be exercised or converted into common stock and then share in the earnings of the Company As of December 31, 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2021 |
|
|
For the Period from October 6,
2020 (Inception) through
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income (loss), as adjusted |
|
$ |
1,373,973 |
|
|
$ |
341,775 |
|
|
$ |
— |
|
|
$ |
(2,241 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
27,600,000 |
|
|
|
6,865,479 |
|
|
|
— |
|
|
|
6,000,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
Diluted net income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income, as adjusted |
|
$ |
1,372,598 |
|
|
$ |
343,150 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding |
|
|
27,600,000 |
|
|
|
6,900,000 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per common share |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
— |
|
|
$ |
— |
|
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s balance sheet, primarily due to their short-term nature, other than warrant liabilities (see Note 1
2
.)
Recent Accounting Standards
In August 2020, the FASB issued 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 U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2020-06 effective as of January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE
4
— INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold 27,600,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 3,600,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note
10
).
NOTE
5
— PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 7,520,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant (including 720,000 Private Placement Warrants purchased in connection with the exercise of the underwriters’ over-allotment option) from
the Company in a private placement that occurred simultaneously with the closing of the Initial Public Offering. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note
10
). The proceeds from the sale of the Private Placement Warrants were added to the net 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 Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. The Private Placement warrants do not meet the criteria to be classified as equity as they are not considered to be indexed to the Company’s common stock in the manner contemplated by ASC Topic 815 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, the tender offer provision fails the “classified in stockholders’ equity” criteria as contemplated by ASC Topic 815. Therefore, the Private Placement Warrants will be treated as liability awards in accordance with ASC Topic 815.
NOTE
— RELATED PARTY TRANSACTIONS
On October 13, 2020, the Sponsor purchased 5,750,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. In October 2020, the Sponsor transferred an aggregate of 475,000 Founder Shares to the Company’s Chief Executive Officer and independent directors for an aggregate purchase price of $2,065 or approximately $0.004 per share. On January 11, 2021, the Company effected a 1.2:1 stock split of the Class B common stock, resulting in the Sponsor holding an aggregate of 6,330,000 Founder Shares and there being an aggregate of 6,900,000 Founder Shares outstanding. All share and per share amounts have been retroactively restated for the stock split. As a result of the underwriters’ election to fully exercise their over-allotment option a total of 900,000 Founder Shares are no longer subject to forfeiture.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B)
Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $
12.00
per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any
20
trading days within any
30
-trading day period commencing at least
150
days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange 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.
Administrative Services Agreement
The Company entered into an agreement, commencing on January 11, 2021, to pay the Sponsor a total of $5,000 per month for office space, operational support and secretarial and administrative services. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2021, the Company incurred and paid $60,000 in fees for these services. For the period from October 6, 2020 (inception) through December 31, 2020, the Company did not incur any fees for these services.
Promissory Note — Related Party
On October 9, 2020, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) March 31, 2021 or (ii) the consummation of the Initial Public Offering. The outstanding balance under the Promissory Note of $80,000 was repaid at the closing of the Initial Public Offering on January 14, 2021 and is no longer available to the Company.
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, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. At December 31, 2021 and 2020, no such Working Capital Loans were outstanding.
NOTE 7 — COMMITMENTS AND CONTINGENCIES
Management continues to evaluate the impact of the
COVID-19
pandemic 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.
Pursuant to a registration rights agreement entered into on January 11, 2021, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering our securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $9,660,000 in the aggregate. The deferred fee will become payable to the underwriters 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.
NOTE
8
— CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION
he Company is authorized to issue 380,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At December 31, 2021, there were 27,600,000 shares of Class A common stock issued and outstanding, all of which are subject to possible redemption and are presented as temporary equity. At December 31, 2020, there were
no
shares of Class A common stock issued or outstanding.
Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as otherwise required by law. The shares of Class B common stock will automatically convert into Class A common stock at the time of a Business Combination, or earlier at the option of the holder, 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 connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable or exchangeable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
NOTE
— STOCKHOLDERS’ (DEFICIT) EQUITY
-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, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2021 and 2020, there were no shares of preferred stock issued or
The Company is authorized to issue
20,000,000
shares of Class B common stock with a par value of $
0.0001
per share. Holders of Class B common stock are entitled to one vote for each share. At December 31, 2021 and 2020, there were
6,900,000
shares of Class B common stock issued and outstanding.
NOTE
10
— WARRANT LIABILITIES
At December 31, 2021, there were 13,800,000 Public Warrants and 7,520,000 Private Placement Warrants outstanding to purchase an aggregate of 21,320,000 shares of Class A common stock which are contingent upon the occurrence of future events as discussed below. At December 31, 2020, there were
no
warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (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 of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of 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 under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 15 business
days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after 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 will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy 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 elect, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company do not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of Warrants When the Price per share of Class
A common stock Equals or Exceeds $18.00
—Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
|
• |
|
in whole and not in part; |
| |
• |
|
at a price of $0.01 per Public Warrant; |
| |
• |
|
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
| |
• |
|
if, and only if, the closing price of the 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. |
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 s
e
curities for sale under all applicable state securities laws.
Redemption of Warrants When the Price per share of Class A common stock Equals or Exceeds $10.00
—Once
the warrants become exercisable, the Company may redeem the outstanding warrants:
in whole and not in part;
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the shares of Class A common stock; and
if, and only if, the closing price of our Class A common stock equals or exceeds $10.00 per public share for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. 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 Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
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 its initial Business Combination at an issue price or
effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the 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 described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price and the $10.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants underlying the Unit 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 will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The Company did not have any significant deferred tax assets or liabilities as of December 31, 2021 and 2020.
The Company’s net deferred tax assets (liabilities) are as follows:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforward |
|
$ |
33,160 |
|
|
$ |
471 |
|
Organizational costs/Startup expenses |
|
|
239,232 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
272,392 |
|
|
|
471 |
|
|
|
|
(272,392 |
) |
|
|
(471 |
) |
| |
|
|
|
|
|
|
|
|
Deferred tax asset, net of allowance |
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
The income tax provision consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
(271,922 |
) |
|
|
(471 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Change in valuation allowance |
|
|
271,922 |
|
|
|
471 |
|
| |
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
As of December 31, 2021 and 2020, the Company did not have any U.S. federal and state net operating loss carryovers available to offset future taxable income.
In assessing the realization of th
e
deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2021, the change in the valuation allowance was $271,922. For the period from October 6, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $471.
A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2021 and 2020 is as follows:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Statutory federal income tax rate |
|
|
21.0 |
% |
|
|
21.0 |
% |
State taxes, net of federal tax benefit |
|
|
0.0 |
% |
|
|
0.0 |
% |
Change in fair value of warrants |
|
|
(44.4 |
)% |
|
|
0.0 |
% |
Transaction costs allocated to warrants |
|
|
7.5 |
% |
|
|
0.0 |
% |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
Change in valuation allowance |
|
|
15.8 |
% |
|
|
(21.0 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
0.0 |
% |
|
|
0.0 |
% |
| |
|
|
|
|
|
|
|
|
The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.
NOTE 1
2
— FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
|
|
| Level 1: |
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or
liability is a market in which transactions for the asset or liability occur with sufficient frequency
and volume to provide pricing information on an ongoing basis.
|
| |
|
| Level 2: |
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
| |
|
| Level 3: |
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
At December 31, 2021, assets held in the Trust Account were comprised of $276,039,258 in money market funds which are invested primarily in U.S. Treasury Securities. During the year ended December 31, 2021, the
Company did not withdraw any interest income from the Trust Account. At December 31, 2020, there were no assets held in the Trust Account.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund |
|
|
1 |
|
|
$ |
276,039,258 |
|
The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
| December 31, 2021 |
|
Warrant Liability – Public Warrants |
|
|
1 |
|
|
|
8,278,620 |
|
| December 31, 2021 |
|
Warrant Liability – Private Placement Warrants |
|
|
2 |
|
|
|
4,511,248 |
|
At December 31, 2020, there were no assets or liabilities measured at fair value on a recurring basis.
The Warrants are accounted for as liabilities in accordance with ASC Topic 815-40 and are presented within warrant liabilities on our accompanying December 31, 2021 balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the statements of operations.
The Company utilized a binomial lattice model to value the warrants initially for the Public and Private Placement Warrants and subsequently for the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statements of operations. Initially, the estimated fair value of the warrant liability was determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its shares of common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The subsequent measurements of the Public Warrants after the detachment of the Public Warrants from the Units is classified as Level 1 due to the use of an observable market quote in an active market under the ticker SWETW. During the quarter ending September 30, 2021, the close price of the public warrant price was used as the fair value for the Private Warrants. As such at September 30, 2021, Private Placement Warrants transferred to Level 2 due to a make-whole provision which allows the Company to use the value of the closing price of the public warrants.
The following table presents the changes in the fair value of the level 3 warrant liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value as of January 1, 2021 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Initial measurement on January 14, 2021 |
|
|
5,790,400 |
|
|
|
10,626,000 |
|
|
|
16,416,400 |
|
|
|
|
(1,654,400 |
) |
|
|
(3,174,000 |
) |
|
|
(4,828,400 |
) |
|
|
|
— |
|
|
|
(7,452,000 |
) |
|
|
(7,452,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Fair value as of March 31, 2021 |
|
$ |
4,136,000 |
|
|
|
— |
|
|
$ |
4,136,000 |
|
|
|
|
1,579,200 |
|
|
|
— |
|
|
|
1,579,200 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Fair value as of June 30, 2021 |
|
$ |
5,715,200 |
|
|
|
— |
|
|
$ |
5,715,200 |
|
|
|
|
(451,200 |
) |
|
|
— |
|
|
|
(451,200 |
) |
|
|
|
(5,264,000 |
) |
|
|
— |
|
|
|
(5,264,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Fair value as of December 31, 2021 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public and Private Placement
Warrants were transferred from a Level 3 measurement to a Level 1 and Level 2 fair value measurements, respectively, during the year ended December 31, 2021.
NOTE 13 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Other than as described in these financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
Athlon Acquisition (NASDAQ:SWETU)
Historical Stock Chart
From Mar 2024 to Apr 2024
Athlon Acquisition (NASDAQ:SWETU)
Historical Stock Chart
From Apr 2023 to Apr 2024
Real-Time news about Athlon Acquisition Corporation (NASDAQ): 0 recent articles
More Athlon Acquisition Corp. News Articles