Item 1. Financial Statements.
ACCELERATE ACQUISITION CORP.
CONDENSED BALANCE SHEETS
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash
|
|
$
|
1,170,560
|
|
|
$
|
—
|
|
Prepaid expenses
|
|
|
807,595
|
|
|
|
—
|
|
Total Current Assets
|
|
|
1,978,155
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Deferred offering costs
|
|
|
—
|
|
|
|
30,000
|
|
Cash and investments held in Trust Account
|
|
|
400,021,043
|
|
|
|
—
|
|
TOTAL ASSETS
|
|
$
|
401,999,198
|
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO REDEMPTION AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
314,214
|
|
|
$
|
1,000
|
|
Accrued offering costs
|
|
|
—
|
|
|
|
5,000
|
|
Total Current Liabilities
|
|
|
314,214
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
Deferred underwriting fee payable
|
|
|
14,000,000
|
|
|
|
—
|
|
Warrant liability
|
|
|
19,496,933
|
|
|
|
—
|
|
Total Liabilities
|
|
|
33,811,147
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption; $0.0001 par value, 500,000,000 shares authorized; 40,000,000 and no shares at a redemption value of $10.00 per share as of September 30, 2021 and December 31, 2020, respectively
|
|
|
400,000,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ (Deficit) Equity
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 and 11,500,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively (1)
|
|
|
1,000
|
|
|
|
1,150
|
|
Additional paid-in capital
|
|
|
—
|
|
|
|
23,850
|
|
Accumulated deficit
|
|
|
(31,812,949
|
)
|
|
|
(1,000
|
)
|
Total Stockholders’ (Deficit) Equity
|
|
|
(31,811,949
|
)
|
|
|
24,000
|
|
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO REDEMPTION AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|
$
|
401,999,198
|
|
|
$
|
30,000
|
|
|
(1)
|
At
December 31, 2020, included up to 1,500,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in
part by the underwriters (see Note 6).
|
The accompanying notes are an integral
part of these unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2021
|
|
|
2021
|
|
Operating and formation costs
|
|
$
|
285,524
|
|
|
$
|
1,570,376
|
|
Loss from operations
|
|
|
(285,524
|
)
|
|
|
(1,570,376
|
)
|
|
|
|
|
|
|
|
|
|
Other income:
|
|
|
|
|
|
|
|
|
Interest earned on investments held in Trust Account
|
|
|
10,083
|
|
|
|
21,043
|
|
Change in fair value of warrants
|
|
|
6,143,067
|
|
|
|
2,203,067
|
|
Total other income
|
|
|
6,153,150
|
|
|
|
2,224,110
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
5,867,626
|
|
|
$
|
653,734
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class A common stock
|
|
|
40,000,000
|
|
|
|
28,235,294
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income per share, Class A common stock
|
|
$
|
0.12
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class B common stock
|
|
|
10,000,000
|
|
|
|
10,000,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income per share, Class B common stock
|
|
$
|
0.12
|
|
|
$
|
0.02
|
|
The accompanying notes are an integral
part of the unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
CONDENSED STATEMENTS OF
CHANGES IN STOCKHOLDERS’ (DEFICIT)
EQUITY
THREE AND NINE MONTHS ENDED SEPTEMBER
30, 2021
(UNAUDITED)
|
|
Class
B
Common Stock(1)
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total
Stockholders’
(Deficit)
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance — January 1, 2021
|
|
|
11,500,000
|
|
|
$
|
1,150
|
|
|
$
|
23,850
|
|
|
$
|
(1,000
|
)
|
|
$
|
24,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion for Class A Common Stock to redemption amount
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,324,000
|
)
|
|
|
(32,465,683
|
)
|
|
|
(35,789,683
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid in excess of fair value for Private Placement Warrants
|
|
|
—
|
|
|
|
—
|
|
|
|
3,300,000
|
|
|
|
—
|
|
|
|
3,300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeiture of Founder Shares
|
|
|
(1,500,000
|
)
|
|
|
(150
|
)
|
|
|
150
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,719,798
|
|
|
|
6,719,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – March 31, 2021 (unaudited), as restated, see Note 2
|
|
|
10,000,000
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
(25,746,885
|
)
|
|
$
|
(25,745,885
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(11,933,690
|
)
|
|
|
(11,933,690
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – June 30, 2021 (unaudited), as restated, see Note 2
|
|
|
10,000,000
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
(37,680,575
|
)
|
|
$
|
(37,679,575
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,867,626
|
|
|
|
5,867,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – September 30, 2021 (unaudited)
|
|
|
10,000,000
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
(31,812,949
|
)
|
|
$
|
(31,811,949
|
)
|
|
(1)
|
At
December 31, 2020, included up to 1,500,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in
part by the underwriters (see Note 6).
|
The accompanying notes are an integral
part of the unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
CONDENSED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2021
(UNAUDITED)
Cash Flows from Operating Activities:
|
|
|
|
Net income
|
|
$
|
653,734
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
Interest earned on investments held in Trust Account
|
|
|
(21,043
|
)
|
Change in fair value of warrant liability
|
|
|
(2,203,067
|
)
|
Transaction costs incurred in connection with IPO
|
|
|
801,198
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Prepaid expenses
|
|
|
(807,595
|
)
|
Accounts Payable and Accrued expenses
|
|
|
313,214
|
|
Net cash used in operating activities
|
|
|
(1,263,559
|
)
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
Investment of cash in Trust Account
|
|
|
(400,000,000
|
)
|
Net cash used in investing activities
|
|
|
(400,000,000
|
)
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Proceeds from sale of Units, net of underwriting discounts paid
|
|
|
392,000,000
|
|
Proceeds from sale of Private Placement Warrants
|
|
|
11,000,000
|
|
Proceeds from promissory note – related party
|
|
|
148,311
|
|
Repayment of promissory note – related party
|
|
|
(148,311
|
)
|
Payment of offering costs
|
|
|
(565,881
|
)
|
Net cash provided by financing activities
|
|
|
402,434,119
|
|
|
|
|
|
|
Net Change in Cash
|
|
|
1,170,560
|
|
Cash – Beginning of period
|
|
|
—
|
|
Cash – End of period
|
|
$
|
1,170,560
|
|
|
|
|
|
|
Non-Cash investing and financing activities:
|
|
|
|
|
Deferred underwriting fee payable
|
|
$
|
14,000,000
|
|
Forfeiture of Founder Shares
|
|
$
|
(150
|
)
|
The accompanying notes are an integral
part of the unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION
AND BUSINESS OPERATIONS
Accelerate Acquisition Corp. (the “Company”)
was incorporated in Delaware on December 30, 2020. The Company was formed for the purpose of entering into a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
The Company is 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 September 30, 2021, the Company
had not commenced any operations. All activity for the period from December 30, 2020 (inception) through September 30, 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 a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest
income from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s
Initial Public Offering was declared effective on March 17, 2021. On March 22, 2021, the Company consummated the Initial Public Offering
of 40,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public
Shares”), at $10.00 per Unit, generating gross proceeds of $400,000,000 which is described in Note 4.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 7,333,333 warrants (the “Private Placement Warrants”) at a price
of $1.50 per Private Placement Warrant in a private placement to Accelerate Acquisition Sponsor, LLC (the “Sponsor”), generating
gross proceeds of $11,000,000, which is described in Note 5.
Transaction costs amounted to $22,590,881,
consisting of $8,000,000 in cash underwriting fees, $14,000,000 of deferred underwriting fees and $590,881 of other offering costs.
Following the closing of the Initial
Public Offering on March 22, 2021, an amount of $400,000,000 ($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 will be invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of
the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any
open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7
of 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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The Company will provide its 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 $10.00 per Public Share, plus any pro rata interest earned on
the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption
rights upon the completion of a Business Combination with respect to the Company’s warrants.
If the Company seeks stockholder approval,
the Company will only proceed with a Business Combination if 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 rules 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 “Amended
and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and
Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however,
stockholder approval of the transaction is required by applicable law or stock exchange rules, 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
irrespective of whether they vote for or against the proposed transaction or do not vote at all.
Notwithstanding the above, if the Company
seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended
and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other
person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the 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 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed (a) to waive
its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business
Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance
or timing of the Company’s obligation to provide holders of shares of Class A common stock the right to have their shares redeemed
in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete
a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction
with any such amendment.
The Company will have until March 22,
2023 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete 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 the Company to pay its tax obligations (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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The Sponsor has agreed to waive its
liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period.
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 representative
of the underwriters has agreed to waive its rights to the deferred underwriting commission (see Note 7) held in the Trust Account in the
event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included
with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such
distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial
Public Offering price per Unit ($10.00).
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 services
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 (1) $10.00 per Public Share and (2) the actual
amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value
of the trust assets, less taxes payable, provided that such liability will not apply to claims by a third party or prospective target
business who executed a waiver of any and all rights to the 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 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.
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
Following the filing of the Q3 Form 10-Q,
the Company’s management re-evaluated the classification of its Public Shares and management determined it should restate its
historical financial statements where, at the closing of the Company’s Initial Public Offering, the Company improperly
classified its Class A common stock subject to possible redemption. The Company previously classified the Class A common stock
subject to possible redemption as temporary equity to be equal to the redemption value of $10.00 per share of 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 can be redeemed or become redeemable subject to
the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the temporary
equity should include all shares of Class A common stock subject to possible redemption. As a result, management has noted a
reclassification error 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. This also resulted in a restatement of earnings per share for the Affected Periods.
In connection with the change in presentation
for the Class A common stock subject to redemption, the Company also restated its earnings per share calculated to allocate net income
(loss) pro rata to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in
which case, both classes of common stock share pro rate in the income (loss) of the Company.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The impact of the restatement on the Company’s financial statements
is reflected in the following table. Amounts related to the Balance Sheet as of March 22, 2021 were previously restated in the Company’s
Form 10-Q for the quarter ended March 31, 2021.
|
|
As Previously
Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Balance Sheet as of March 22, 2021
|
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
361,733,090
|
|
|
$
|
38,266,910
|
|
|
$
|
400,000,000
|
|
Class A common stock
|
|
$
|
383
|
|
|
$
|
(383
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
5,800,844
|
|
|
$
|
(5,800,844
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(802,223
|
)
|
|
$
|
(32,465,683
|
)
|
|
$
|
(33,267,906
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,004
|
|
|
$
|
(38,266,910
|
)
|
|
$
|
(33,266,906
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of March 31, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
369,254,113
|
|
|
$
|
30,745,887
|
|
|
$
|
400,000,000
|
|
Class A common stock
|
|
$
|
307
|
|
|
$
|
(307
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
4,998,695
|
|
|
$
|
(30,745,580
|
)
|
|
$
|
(25,746,885
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,002
|
|
|
$
|
(30,745,877
|
)
|
|
$
|
(25,745,885
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of June 30, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
357,320,420
|
|
|
$
|
42,679,580
|
|
|
$
|
400,000,000
|
|
Class A common stock
|
|
$
|
427
|
|
|
$
|
(427
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
10,213,470
|
|
|
$
|
(10,213,470
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(5,214,892
|
)
|
|
$
|
(32,465,683
|
)
|
|
$
|
(37,680,575
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,005
|
|
|
$
|
(42,679,580
|
)
|
|
$
|
(37,679,575
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Three Months Ended March 31, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class A common stock
|
|
|
40,000,000
|
|
|
|
(36,000,000
|
)
|
|
|
4,000,000
|
|
Basic and diluted net income per share, Class A common
stock
|
|
$
|
—
|
|
|
$
|
0.48
|
|
|
$
|
0.48
|
|
Weighted average shares outstanding, Class B common stock
|
|
|
10,000,000
|
|
|
|
—
|
|
|
|
10,000,000
|
|
Basic and diluted net income per share, Class B common
stock
|
|
$
|
0.67
|
|
|
$
|
(0.19
|
)
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Three Months Ended June 30, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class A common stock
|
|
|
40,000,000
|
|
|
|
—
|
|
|
|
40,000,000
|
|
Basic and diluted net loss per share, Class A common stock
|
|
$
|
—
|
|
|
$
|
(0.24
|
)
|
|
$
|
(0.24
|
)
|
Weighted average shares outstanding, Class B common stock
|
|
|
10,000,000
|
|
|
|
—
|
|
|
|
10,000,000
|
|
Basic and diluted net loss per share, Class B common stock
|
|
$
|
(1.19
|
)
|
|
$
|
0.95
|
|
|
$
|
(0.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Six Months Ended June 30, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class A common stock
|
|
|
40,000,000
|
|
|
$
|
(17,900,522
|
)
|
|
$
|
22,099,448
|
|
Basic and diluted net loss per share, Class A common stock
|
|
$
|
—
|
|
|
|
(0.16
|
)
|
|
|
(0.16
|
)
|
Weighted average shares outstanding, Class B common stock
|
|
|
10,000,000
|
|
|
$
|
—
|
|
|
$
|
10,000,000
|
|
Basic and diluted net loss per share, Class B common stock
|
|
$
|
(0.52
|
)
|
|
|
0.36
|
|
|
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Three Months Ended March 31, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial classification of Class A common stock subject to possible redemption
|
|
$
|
361,733,090
|
|
|
$
|
(361,733,090
|
)
|
|
$
|
—
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
7,521,023
|
|
|
$
|
(7,521,023
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Six Months Ended June 30, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial classification of Class A common stock subject to possible redemption
|
|
$
|
361,733,090
|
|
|
$
|
(361,733,090
|
)
|
|
$
|
—
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
(4,412,670
|
)
|
|
$
|
4,412,670
|
|
|
$
|
—
|
|
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited condensed
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are
necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed
financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the
SEC on March 18, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the
results to be expected for the year ending December 31, 2021 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth
company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the
“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent
registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies
(that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that 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 statement 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.
Use of Estimates
The preparation of the condensed financial
statements in conformity with 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 liability. Such estimates may be subject to change as more
current information becomes available and accordingly the actual results could differ significantly from those estimates.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
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 September 30, 2021 and December 31, 2020.
Offering Costs
Offering costs consist of legal, accounting,
underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering
costs were allocated on a relative fair value basis between stockholders’ equity and expense. The portion of offering costs allocated
to the Public Warrants has been charged to expense. Offering costs associated with the Class A common stock issued were initially charged
to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. On September
30, 2021, offering costs totaled $22,590,881 (consisting of $8,000,000 of underwriting fees, $14,000,000 of deferred underwriting fees
and $590,881 of other offering costs), of which $801,198 was charged to expense and $21,789,683 was charged to stockholders' equity.
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 Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a
liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature 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, shares of Class A common stock subject to possible redemption
are presented as temporary equity, outside of the stockholders’ 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 stocks to equal the redemption value at the end of
each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial
book value to redemption amount value. The change in the carrying value of redeemable Class A common stocks resulted in charges against
additional paid-in capital and accumulated deficit.
At September 30, 2021, the Class A common stocks reflected
in the condensed balance sheets are reconciled in the following table:
Gross proceeds
|
|
$
|
400,000,000
|
|
Less:
|
|
|
|
|
Proceeds allocated to Public Warrants
|
|
|
(14,000,000
|
)
|
Class A common stock issuance costs
|
|
|
(21,789,683
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
35,789,683
|
|
|
|
|
|
|
Class A common stocks subject to possible redemption
|
|
$
|
400,000,000
|
|
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
Warrant Liability
The Company accounts for the Warrants
in accordance with the guidance contained in ASC 815-40-15-7D and 7F 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 adjust 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 our statements of operations. The Private Warrants and the Public Warrants for periods where
no observable traded price was available are valued using a lattice model, specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein
methodology. 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 Warrants were initially valued using a lattice model, specifically a bionomal
lattice model incorporating the Cox-Ross-Rubenstein methodology. As of September 30, 2021, the fair value of the Private Warrants was
the equivalent to that of the Public Warrants as they had substantially the same terms.
Income Taxes
The Company follows the asset and liability
method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to differences between the financial statement’s 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. As of September 30, 2021,
the Company had a deferred tax asset of approximately $150,000, which had a full valuation allowance recorded against it. The Company’s
deferred tax assets were deemed to be de minimis as of December 31, 2020.
The Company’s current taxable
income primarily consists of interest earned on the Trust Account. The Company’s operating and formation costs are generally considered
start-up costs and are not currently deductible. During the three and nine months ended September 30, 2021, the Company recorded no income
tax expense. The Company’s effective tax rate for three and nine months ended September 30, 2021 was approximately 0%, which differs
from the expected income tax rate due to the start-up costs, change in warrant valuation, transaction costs, and valuation allowance (discussed
above) which are not currently deductible.
ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing
authorities. 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 September 30, 2021 and December 31, 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. The provision for income taxes was deemed
to be de minimus as of September 30, 2021.
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 stock is computed by
dividing net income (loss) by the weighted average number of common stocks 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 stocks 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 20,666,666 Class A common stocks in the aggregate. As of September 30, 2021, the Company did not have any dilutive
securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of
the Company. As a result, diluted net loss per common stock is the same as basic net loss per common stock for the periods presented.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The following table reflects the calculation
of basic and diluted net income per common stock (in dollars, except per share amounts):
|
|
Three Months Ended
September 30, 2021
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class A
|
|
|
Class B
|
|
Basic and diluted net income per common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income, as adjusted
|
|
$
|
4,694,101
|
|
|
$
|
1,173,525
|
|
|
$
|
482,758
|
|
|
$
|
170,977
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
40,000,000
|
|
|
|
10,000,000
|
|
|
|
28,235,294
|
|
|
|
10,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income per common stock
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
Concentration of Credit Risk
Financial instruments that potentially
subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the
Federal Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on these accounts 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,” approximate the
carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recent Accounting Standards
In August 2020, the FASB issued Accounting
Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and
Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’
Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required
under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the
derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06
on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
The Company’s management does
not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect
on the accompanying financial statements.
NOTE 4. PUBLIC OFFERING
Pursuant to the Initial Public Offering,
the Company sold 40,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $400,000,000. Each Unit consists of one
share of Class A common stock and one-third 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.
NOTE 5. PRIVATE PLACEMENT
Simultaneously with the closing of the
Initial Public Offering, the Sponsor purchased an aggregate of 7,333,333 Private Placement Warrants, at a price of $1.50 per warrant,
or $11,000,000 in the aggregate. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at an exercise
price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants were added
to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within
the Combination Period, the proceeds from the sale of the Private Placement 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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
On December 31, 2020, the Sponsor
paid $25,000 to cover certain offering costs of the Company in consideration for 8,625,000 Class B ordinary shares (the “Founder
Shares”). The Sponsor subsequently transferred 30,000 Founder Shares to each of the independent directors and 20,000 Founder Shares
to each advisor, for $0.003 per share. On January 20, 2021, the Company effected a stock dividend of 1,437,500 shares, and on March 1,
2021, the Company effected a stock dividend of 1,437,500 shares, resulting in there being an aggregate of 11,500,000 Founder Shares outstanding.
The Founder Shares included an aggregate of up to 1,500,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’
over-allotment was not exercised in full or in part, so that the number of Founder Shares will collectively represent approximately 20%
of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ option
not to exercise its over-allotment option, 1,500,000 shares were forfeited.
The Sponsor has agreed, subject to certain
limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (A) one year after the completion
of a Business Combination and (B) subsequent to a 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, reorganization or other similar transaction
that results in all of the Company’s stockholders having the right to exchange their shares of Class A common stock for cash,
securities or other property.
Administrative Services Agreement
The Company entered into an agreement,
commencing on March 22, 2021, pursuant to which the Company will pay a monthly fee of $10,000 to the Sponsor for administrative services
including office space, utilities and secretarial support provided to the Company. Upon completion of the initial Business Combination
or the Company’s liquidation, the Company will cease paying these monthly fees. For the three and nine months ended September 30,
2021, the Company incurred and paid $30,000 and $60,000 in fees for these services, respectively.
Promissory Note — Related
Party
On December 31, 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. Accelerate Acquisition Corp. no longer borrows on this facility. The Promissory Note was non-interest bearing
and payable on the earlier of June 30, 2021 or the consummation of the Initial Public Offering. As of September 30, 2021 and December
31, 2020, there was no outstanding under the Promissory Note.
Related Party Loans
In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or certain of the Company’s officers
and directors or their affiliates 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. 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 $1.50
per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of September 30, 2021 and December
31, 2020, there were no amounts outstanding under the Working Capital Loans.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
NOTE 7. COMMITMENTS
Risks and Uncertainties
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 this financial statement. The financial statement does not include any adjustments that might result from the outcome of
this uncertainty.
Registration and Stockholder Rights
Pursuant to a registration and stockholder rights
agreement entered into on March 17, 2021, the holders of the Founder Shares, Private Placement Warrants, and warrants that may be issued
upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement
Warrants and warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled
to registration rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion
to our Class A common stock). Any holder of at least 20% of the outstanding registrable securities owned by these holders is 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 and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.
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 certain expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from the date of Initial Public Offering to purchase up to 6,000,000 additional Units to cover over-allotments, if any, at the
Initial Public Offering price less the underwriting discounts and commissions. As a result of the underwriters’ election not to
exercise their over-allotment, 6,000,000 Units are no longer available for purchase.
The underwriters are entitled to a deferred fee
of $0.35 per Unit sold in the Initial Public Offering, or $14,000,000 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. STOCKHOLDERS’ EQUITY
Preferred Stock — The Company is
authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences
as may be determined from time to time by the Company’s board of directors. As of September 30, 2021 and December 31, 2020, there
were no shares of preferred stock issued or outstanding.
Class A Common Stock — The Company
is authorized to issue 500,000,000 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 September 30, 2021, there were 40,000,000 shares of Class A common
stock issued and outstanding subject to possible redemption which are presented as temporary equity. At December 31, 2020, there
were no shares of Class A common stock issued or outstanding.
Class B Common Stock — The Company
is authorized to issue 50,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of September 30, 2021,
there were 10,000,000 shares of common stock issued and outstanding, and as of December 31, 2020, there were 11,500,000 shares of
common stock outstanding with 1,500,000 shares subject to forfeiture. As a result of the underwriters’ election not to exercise
their over-allotment, 1,500,000 shares of Class B common stock were forfeited.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
In January 2021, the Sponsor transferred 30,000
shares of Class B common stock to each of the Company’s independent directors and 20,000 shares of Class B common stock to each
of the Company’s advisors.
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 shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject to adjustment.
In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of
the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of
Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of
the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance)
so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal,
in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of all shares of common stock outstanding upon
completion of the Initial Public Offering, plus (ii) all shares of Class A common stock and equity-linked securities issued
or deemed issued in connection with the Business Combination (excluding any shares of Class A common stock or equity-linked securities
issued, or to be issued, to any seller in a Business Combination, and any private placement-equivalent warrants issued to the Sponsor
or its affiliates upon conversion of loans made to the Company). The Company cannot determine at this time whether a majority of the holders
of our Class B common stock at the time of any future issuance would agree to waive such adjustment to the conversion ratio.
NOTE 9. WARRANTS
Warrants —As of September
30, 2021, there were 13,333,333 Public 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) 12 months from the closing of the Initial Public Offering and (b) 30 days after the completion of a Business Combination.
The warrants will expire five years after the completion of a Business Combination.
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 with respect to the 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 any shares of Class A common stock upon exercise of
a warrant unless the share of 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 20 business days after the closing of the Company’s initial Business Combination, the Company will use
its commercially reasonable efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable
upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause such registration statement to become
effective within 60 business days after the closing of a Business Combination and to maintain a current prospectus relating to those shares
of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if shares
of the Class A common stock are at the time of any exercise of a Public 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, it will not be required to file or maintain in
effect a registration statement, but the Company will use its commercially reasonable efforts to register or qualify the shares under
applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the shares of Class A
common stock issuable upon exercise of the warrants is not effective by the 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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
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 warrants (except as described herein with respect to the Private Placement Warrants):
|
●
|
in
whole and not in part;
|
|
●
|
at
a price of $0.01 per warrant;
|
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
|
|
●
|
if,
and only if, the last reported sale price of the Class A common stock for any 20 trading days within a 30-trading day period ending three
business days before the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or
exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like).
|
If and when the warrants become redeemable by
the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale
under all applicable state securities laws.
Redemption of warrants when the price per
share of Class A common stock equals or exceeds $10.00. Commencing ninety days after the warrants become exercisable, the
Company may redeem the outstanding warrants:
|
●
|
in
whole and not in part;
|
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption;
|
|
●
|
if,
and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like); and
|
|
●
|
if
the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public
Warrants, as described above.
|
If the Company calls the Public Warrants for redemption,
as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on
a “cashless basis,” as described in the warrant agreement. 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 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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
In addition, if (x) the Company issues additional
shares of our Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our
initial business combination at an issue price or effective issue price of less than $9.20 per share of our Class A common stock
(with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such
issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable,
prior to such issuance), (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 our initial business combination on the date of the completion of our initial business
combination (net of redemptions), and (z) the volume-weighted average trading price of our Class A common stock during the 20
trading day period starting on the trading day prior to the day on which we complete our 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 $10.00 and $18.00 per share redemption trigger prices
will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
The Private Placement Warrants are identical to
the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A
common stock issuable upon the exercise of the Private Placement Warrants 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.
NOTE 10. 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 September 30, 2021, assets held in the Trust
Account were comprised of $400,021,043 in money market funds which are invested primarily in U.S. Treasury Securities. During the
three and nine months ended September 30, 2021, the Company did not withdraw any interest income from the Trust Account.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and indicates the
fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
Description
|
|
Level
|
|
September 30,
2021
|
|
Assets:
|
|
|
|
|
|
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund
|
|
1
|
|
$
|
400,021,043
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
1
|
|
|
12,578,666
|
|
Warrant Liability – Private Placement Warrants
|
|
2
|
|
|
6,918,267
|
|
The Warrants were accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities on our accompanying September 30, 2021 condensed 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 condensed statements of operations.
The Public Warrants were initially valued using
a lattice model, specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology. As of September 30, 2021, the
Public Warrants were valued using the instrument’s publicly listed trading price as of the balance sheet date, which is considered
to be a Level 1 measurement due to the use of an observable market quote in an active market.
The Private Placement Warrants were initially
valued using a lattice model, specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered
to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Placement
Warrants is the expected volatility of our ordinary shares. The expected volatility of the Company’s ordinary shares was determined
based on the implied volatility of the Public Warrants. As of September 30, 2021, the fair value of the Private Warrants was the equivalent
to that of the Public Warrants as they had substantially the same terms; however, they are not actively traded, as such are listed as
a Level 2 in the hierarchy table above. The change in fair value is recognized in the condensed statement of operations.
|
|
Private
Placement
|
|
|
Public
|
|
|
Warrant
Liabilities
|
|
Fair value as of January 1, 2021
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Initial measurement on March 22nd, 2021
|
|
|
7,700,000
|
|
|
|
14,000,000
|
|
|
|
21,700,000
|
|
Change in fair value
|
|
|
(781,733
|
)
|
|
|
(1,421,334
|
)
|
|
|
(2,203,067
|
)
|
Fair value as of September 30, 2021
|
|
$
|
6,918,267
|
|
|
$
|
12,578,666
|
|
|
$
|
19,496,933
|
|
Transfers to/from Levels 1, 2 and 3 are recognized
at the beginning of the reporting period in which a change in valuation technique or methodology occurs. The estimated value of the Private
Placement Warrants transferred from a Level 3 measurement to a Level 2 measurement during the three and nine months ended September 30,
2021 was $6,918,267 as presented in the table below.
|
|
Private Placement Warrant Liabilities
|
|
Fair value as of January 1, 2021
|
|
$
|
—
|
|
Initial measurement on March 22nd, 2021
|
|
|
7,700,000
|
|
Change in fair value
|
|
|
781,733
|
|
Transfer to Level 2
|
|
|
(6,918,267
|
)
|
Fair value as of September 30, 2021
|
|
$
|
—
|
|
NOTE 11. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the unaudited condensed balance sheet date up to the date that the unaudited condensed financial statements were issued.
Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial
statements.
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
References in this report (the “Quarterly
Report”) to “we,” “us” or the “Company” refer to Accelerate Acquisition Corp. References to
our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor”
refer to Accelerate Acquisition Sponsor, LLC. The following discussion and analysis of the Company’s financial condition and results
of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly
Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve
risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical
facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Business Combination
(as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations,
are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,”
“estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking
statements. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters,
as well as other statements other than statements of historical fact in this Form 10-Q. Such forward-looking statements relate to future
events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors
could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking
statements, including that the conditions of the Proposed Business Combination are not satisfied. For information identifying important
factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to
the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange
Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website
at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new information, future events or otherwise.
This Management’s Discussion and
Analysis of Financial Condition has been restated to give effect to the restatement of our financial statements as of March 31, 2021
and June 30, 2021. Management re-evaluated the Company's application of ASC 480-10-99 to its accounting classification of public
shares. In connection with the preparation of the Company’s financial statements as of September 30, 2021, management
identified errors made in its historical financial statements where, at the closing of the Company’s Initial Public Offering,
the Company improperly classified a portion of its Class A common stock subject to possible redemption. The Company previously
determined the Class A common stock subject to possible 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 can be redeemed or become redeemable
subject to the occurrence of future events considered outside of the Company’s control. Therefore, management concluded that
the redemption value should include all Class A common stock subject to possible redemption regardless if the result is less than
$5,000,001 in net tangible assets. 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”, management has concluded the classification error related to temporary equity and permanent equity
was material to the historical financial statements. Therefore, the Company, in consultation with its Audit Committee, concluded
that its previously issued financial statements impacted should be restated. This resulted in a restatement to temporary equity with
the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A common stock. This also resulted in a restatement of earnings per share for the Affected Periods.
Overview
We are a blank check company formed under the
laws of the State of Delaware on December 30, 2020 for the purpose of entering into a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our Business Combination
using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or
a combination of cash, stock and debt.
We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from December 30, 2020 (inception) through September 30, 2021 were organizational
activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business
Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating
income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended September 30, 2021,
we had net income of $5,867,626, which consists of changes in fair value of the warrant liability of $6,143,067 and interest earned on
marketable securities held in Trust Account of $10,083, offset by formation and operating costs of $285,524.
For the nine months ended September 30, 2021,
we had net income of $653,734, which consists of changes in fair value of the warrant liability of $2,203,067 and interest earned on marketable
securities held in Trust Account of $21,043, offset by formation and operating costs of $1,570,376.
Liquidity and Capital Resources
On March 22, 2021, we consummated the Initial
Public Offering of 40,000,000 Units at $10.00 per Unit, generating gross proceeds of $400,000,000 which is described in Note 5. Simultaneously
with the closing of the Initial Public Offering, we consummated the sale of 7,333,333 Private Placement Warrants at a price of $1.50 per
Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $11,000,000, which is described in Note
6.
For the nine months ended September 30, 2021,
cash used in operating activities was $1,263,559. Net income of $653,734 was affected by interest earned on marketable securities held
in the Trust Account of $21,043, changes in warrant liability of $2,203,067 and transaction costs allocable to warrant liability of $801,198.
Changes in operating assets and liabilities used $494,381 of cash for operating activities.
As of September 30, 2021, we had investments held
in the Trust Account of $400,021,043 (including approximately $21,043 of interest) consisting of money market funds which are invested
primarily in U.S. Treasury Securities. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through September
30, 2021, we have not withdrawn any interest earned from the Trust Account.
We intend to use substantially all of the funds
held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete
our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our
Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the
target business or businesses, make other acquisitions and pursue our growth strategies.
As of September 30, 2021, we had cash of $1,170,560.
We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence
on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their
representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate
and complete a Business Combination.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their
affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the
Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. 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 $1.50 per warrant. The
warrants would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional
funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target
business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so,
we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares
upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such
Business Combination.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of September 30, 2021. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee of $10,000
for office space, utilities and secretarial and administrative support. We began incurring these fees on March 22, 2021 and will continue
to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.
The underwriters are entitled to a deferred fee
of $0.35 per Unit, or $14,000,000 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.
Critical Accounting Policies
The preparation of unaudited condensed financial
statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially
differ from those estimates. We have identified the following critical accounting policies:
Warrant Liability
We account for the Warrants in accordance with
the guidance contained in ASC 815-40, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.
Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value in respect of each reporting
period. This liability is subject to re-measurement at each balance sheet date until the Warrants are exercised, and any change in fair
value is recognized in our statement of operations. The Private Warrants and the Public Warrants for periods where no observable traded
price was available are valued using a lattice model, specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology.
For periods subsequent to the severability of the Public Warrants from the Units, the Public Warrant quoted market price was used as the
fair value as of each relevant date.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument
and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that is either
within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified
as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class A common stock features certain
redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly,
shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’
(deficit) equity section of our balance sheet.
Net Income (Loss) Per Common Share
Net loss per common stock is computed by dividing
net loss by the weighted average number of common stocks outstanding during the period. We apply the two-class method in calculating earnings
per share. Accretion associated with the redeemable shares of Class A common stocks is excluded from earnings per share as the redemption
value approximates fair value.
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards
Update (“ASU”) No. 2020-06, Debt --debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts
in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity (“ASU
2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP.
The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception,
and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption
of the ASU did not impact the Company’s financial position, results of operations or cash flows.
The Company’s management does not believe
that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying
financial statements.