Item 1. Financial Statements (Unaudited)
NEW
VISTA ACQUISITION CORP
CONDENSED
BALANCE SHEETS
|
|
June 30,
2021
|
|
|
December 31,
2020
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash
|
|
$
|
1,292,184
|
|
|
$
|
-
|
|
Prepaid expenses
|
|
|
518,198
|
|
|
|
-
|
|
Deferred offering costs
|
|
|
-
|
|
|
|
55,966
|
|
Total current assets
|
|
|
1,810,382
|
|
|
|
55,966
|
|
Prepaid expenses non-current
|
|
|
322,586
|
|
|
|
-
|
|
Cash and marketable securities held in Trust Account
|
|
|
276,018,478
|
|
|
|
-
|
|
Total Assets
|
|
$
|
278,151,446
|
|
|
$
|
55,966
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accrued offering costs and expenses
|
|
$
|
1,584,988
|
|
|
$
|
40,030
|
|
Total current liabilities
|
|
|
1,584,988
|
|
|
|
40,030
|
|
Warrant liability
|
|
|
14,978,732
|
|
|
|
-
|
|
Deferred underwriting discount
|
|
|
9,660,000
|
|
|
|
-
|
|
Total liabilities
|
|
|
26,223,720
|
|
|
|
40,030
|
|
|
|
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
Class A ordinary shares subject to possible redemption, 24,692,772 shares and 0 shares at redemption value at June 30, 2021 and December 31, 2020, respectively
|
|
|
246,927,720
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity:
|
|
|
|
|
|
|
|
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 2,907,228 shares and 0 shares issued and outstanding (excluding 24,692,772 shares and 0 shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively
|
|
|
290
|
|
|
|
-
|
|
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,900,000 shares issued and outstanding at June 30, 2021 and December 31, 2020
|
|
|
690
|
|
|
|
690
|
|
Additional paid-in capital
|
|
|
3,184,642
|
|
|
|
24,310
|
|
Retained earnings (accumulated deficit)
|
|
|
1,814,384
|
|
|
|
(9,064
|
)
|
Total shareholders’ equity
|
|
|
5,000,006
|
|
|
|
15,936
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders’ Equity
|
|
$
|
278,151,446
|
|
|
$
|
55,966
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
NEW
VISTA ACQUISITION CORP
UNAUDITED
CONDENSED STATEMENT OF OPERATIONS
|
|
For the Three Months
Ended
|
|
|
For the Six Months
Ended
|
|
|
|
June 30,
2021
|
|
|
June 30,
2021
|
|
|
|
|
|
|
|
|
Formation and operating costs
|
|
$
|
1,881,693
|
|
|
$
|
2,087,228
|
|
Loss from operations
|
|
|
(1,881,693
|
)
|
|
|
(2,087,228
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
Warrant issuance cost
|
|
|
—
|
|
|
|
(683,306
|
)
|
Unrealized gain on change in fair value of warrants
|
|
|
5,258,115
|
|
|
|
4,575,504
|
|
Trust interest income
|
|
|
12,958
|
|
|
|
18,478
|
|
Total other income
|
|
|
5,271,073
|
|
|
|
3,910,676
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,389,380
|
|
|
$
|
1,823,448
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, ordinary share subject to redemption
|
|
|
24,346,926
|
|
|
|
17,640,453
|
|
Basic and diluted net income per share
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
Basic and diluted weighted average shares outstanding, ordinary share
|
|
|
10,153,074
|
|
|
|
8,986,619
|
|
Basic and diluted net income per share
|
|
$
|
0.33
|
|
|
$
|
0.20
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
NEW
VISTA ACQUISITION CORP
UNAUDITED
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
|
|
Class A
Ordinary Shares
|
|
|
Class B
Ordinary Shares
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total
Shareholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance as of December 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
6,900,000
|
|
|
$
|
690
|
|
|
$
|
24,310
|
|
|
$
|
(9,064
|
)
|
|
$
|
15,936
|
|
Sale of 27,600,000 Units, net of underwriting discount and offering expenses
|
|
|
27,600,000
|
|
|
|
2,760
|
|
|
|
-
|
|
|
|
-
|
|
|
|
248,984,531
|
|
|
|
-
|
|
|
|
248,987,291
|
|
Excess of cash received over fair value of private warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,031,967
|
|
|
|
-
|
|
|
|
1,031,967
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,565,932
|
)
|
|
|
(1,565,932
|
)
|
Change in Class A ordinary shares subject to possible redemption
|
|
|
(24,346,926
|
)
|
|
|
(2,435
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(243,466,825
|
)
|
|
|
-
|
|
|
|
(243,469,260
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2021
|
|
|
3,253,074
|
|
|
$
|
325
|
|
|
|
6,900,000
|
|
|
$
|
690
|
|
|
$
|
6,573,983
|
|
|
$
|
(1,574,996
|
)
|
|
$
|
5,000,002
|
|
Net income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,389,380
|
|
|
|
3,389,380
|
|
Share-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
69,084
|
|
|
|
-
|
|
|
|
69,084
|
|
Change in Class A ordinary shares subject to possible redemption
|
|
|
(345,846
|
)
|
|
|
(35
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,458,425
|
)
|
|
|
-
|
|
|
|
(3,458,460
|
)
|
Balance as of June 30, 2021
|
|
|
2,907,228
|
|
|
$
|
290
|
|
|
|
6,900,000
|
|
|
$
|
690
|
|
|
$
|
3,184,642
|
|
|
$
|
1,814,384
|
|
|
$
|
5,000,006
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
NEW
VISTA ACQUISITION CORP
UNAUDITED
CONDENSED STATEMENT OF CASH FLOWS
|
|
For
the
Six Months Ended
June 30,
2021
|
|
Cash Flows from Operating Activities:
|
|
|
|
Net income
|
|
$
|
1,823,448
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
Interest earned on marketable securities held in Trust Account
|
|
|
(18,478
|
)
|
Change in fair value of warrant liabilities
|
|
|
(4,575,504
|
)
|
Share-based compensation
|
|
|
69,084
|
|
Warrant issuance costs
|
|
|
683,306
|
|
Changes in current assets and current liabilities:
|
|
|
|
|
Prepaid expenses
|
|
|
(840,784
|
)
|
Accrued offering costs and expenses
|
|
|
1,600,924
|
|
Net cash used in operating activities
|
|
|
(1,258,004
|
)
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
Investment held in Trust Account
|
|
|
(276,000,000
|
)
|
Net cash used in investing activities
|
|
|
(276,000,000
|
)
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Proceeds from Initial Public Offering, net of underwriters’ fees
|
|
|
270,480,000
|
|
Proceeds from private placement
|
|
|
8,520,000
|
|
Payment of offering costs
|
|
|
(449,812
|
)
|
Net cash provided by financing activities
|
|
|
278,550,188
|
|
|
|
|
|
|
Net change in cash
|
|
|
1,292,184
|
|
Cash, beginning of the period
|
|
|
-
|
|
Cash, end of the period
|
|
$
|
1,292,184
|
|
|
|
|
|
|
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
|
Deferred underwriting commissions charged to additional paid-in capital
|
|
$
|
9,660,000
|
|
Initial value of Class A ordinary shares subject to possible redemption
|
|
$
|
244,337,930
|
|
Change in value of Class A ordinary shares subject to possible redemption
|
|
$
|
2,589,790
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
NEW
VISTA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
1 — Organization and Business Operations
Organization
and General
New
Vista Acquisition Corp (the “Company”) was incorporated as a Cayman Islands exempted company on December 21, 2020. The Company
was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar
business combination with one or more businesses (the “Business Combination”). The Company has not yet selected any specific
Business Combination target.
The
Company’s sponsor is New Vista Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
As
of June 30, 2021, the Company had not commenced any operations. All activity for the period from December 21, 2020 (inception) through
June 30, 2021 relates to the Company’s formation and the initial public offering (“IPO”) described below, and, since
the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues
until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the
form of interest income on cash and marketable securities from the proceeds derived from the IPO and will recognize changes in the fair
value of warrant liability as other income (expense). The Company has selected December 31 as its fiscal year end.
Financing
The
registration statement for the Company’s IPO was declared effective on February 16, 2021 (the “Effective Date”). On
February 19, 2021, the Company consummated the IPO of 27,600,000 units, including the issuance of 3,600,000 units as a result of the
underwriters’ full exercise of their over-allotment option (the “Units” and, with respect to the ordinary shares included
in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $276,000,000, which is
discussed in Note 4. Each Unit consisted of one Public Share and one-third of one redeemable warrant (the “Public Warrants”).
Each whole Public Warrant entitles the holder to purchase one Public Share for $11.50 per share, subject to adjustment (see Note 4).
Simultaneously
with the closing of the IPO, the Company consummated a private placement (the “Private Placement”) of 5,680,000 warrants
(the “Private Placement Warrants,” and together with the Public Warrants, the “Warrants”) at a price of $1.50
per Private Placement Warrant to the Sponsor, generating gross proceeds of $8,520,000, which is discussed in Note 5.
Transaction
costs amounted to $15,629,812, consisting of $5,520,000 of underwriting discount, $9,660,000 of deferred underwriting discount, and $449,812
of other offering costs.
Trust
Account
Following the closing of the IPO on February 19,
2021, $276,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement
Warrants was placed in a trust account (the “Trust Account”), which is invested only in U.S. government treasury bills with
a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule
2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Except with respect to interest
earned on the funds held in the Trust Account that may be released to the Company to pay taxes, if any, the proceeds from the IPO and
the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (1) the completion of an
initial Business Combination; (2) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend
the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s
obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s Public Shares
if the Company does not complete the initial Business Combination within 24 months from the closing of the IPO (the “Combination
Period”) or (B) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination
activity; and (3) the redemption of the Company’s Public Shares if the Company has not completed an initial Business Combination
within the Combination Period, subject to applicable law.
Initial
Business Combination
The
Company must complete its initial Business Combination with one or more operating businesses or assets having an aggregate fair market
value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes
payable on the interest earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However,
the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the issued and
outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete
a Business Combination successfully.
The
Company will provide its public shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion
of the initial Business Combination either (i) in connection with a general meeting called to approve the Business Combination or
(ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders
will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest
(which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, subject to the limitations.
The amount in the Trust Account is initially anticipated to be $10.00 per Public Share.
The Company accounts for its ordinary shares
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and
are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are
either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s
ordinary shares subject to possible redemption, which feature certain redemption rights considered to be outside of the Company’s
control and subject to the occurrence of uncertain future events, are presented at redemption value as temporary equity, outside of the
shareholders’ equity section of the Company’s balance sheet. The Company’s amended and restated memorandum and articles
of association provides that in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets
to be less than $5,000,001 upon consummation of the initial Business Combination and after payment of the deferred underwriting commissions.
In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon
such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of then issued and outstanding
shares voted are voted in favor of the Business Combination.
The Company has 24 months from the closing of
the IPO to complete the initial Business Combination. However, if the Company is unable to complete the initial 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 (less up to $100,000 of interest to pay dissolution expenses
and which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (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 remaining shareholders
and board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law, to provide
for claims of creditors and to comply with the requirements of any other applicable law.
The
initial shareholders, directors and officers have entered into a letter agreement with the Company, pursuant to which they have agreed
to waive: (1) their redemption rights with respect to any founder shares (as described in Note 6) and Public Shares held by them, as
applicable, in connection with the completion of the initial Business Combination; (2) their redemption rights with respect to any founder
shares and Public Shares held by them in connection with a shareholder vote to amend the amended and restated memorandum and articles
of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial
Business Combination or to redeem 100% of our Public Shares if the Company does not complete the initial Business Combination within
the Combination Period or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination
activity; and (3) their rights to liquidating distributions from the Trust Account with respect to any founder shares they hold if the
Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating
distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business
Combination within the Combination Period. If the Company submits the initial Business Combination to the public shareholders for a vote,
the initial shareholders, directors and officers have agreed to vote any founder shares and Public Shares held by them in favor of the
initial Business Combination.
The
Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s
independent registered public accounting firm) 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
(1) $10.00 per Public Share or (2) such lesser 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, in each case net of interest which may be withdrawn to pay taxes,
except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as
to any claims under the indemnity of the underwriters of the IPO 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 has
not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s
only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations.
Effective
April 12, 2021, the holders of Units may elect to separately trade the Class A ordinary shares and warrants included in the Units. The
Units not separated continue to trade on the NASDAQ Capital Market under the symbol “NVSAU.” The separated Class A ordinary
shares and Warrants trade on the NASDAQ Capital Market under the symbols “NVSA” and “NVSAW,” respectively.
Liquidity
and Capital Resources
As
of June 30, 2021, the Company had approximately $1.3 million in its operating bank account and working capital of approximately $0.2
million.
Prior to the completion of the IPO, the Company’s
liquidity needs had been satisfied through a capital contribution from the Sponsor of $25,000 to cover certain offering costs in return
for the founder shares (see Note 6) and the loan under an unsecured promissory note from the Sponsor of $77,012 (see Note 6). The loan
under the promissory note from the Sponsor was paid in full on February 22, 2021. Subsequent to the consummation of the IPO and Private
Placement, the Company’s liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement
not held in the Trust Account.
Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs
through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will
be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel expenditures and consultants, selecting the target business
to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic on the Company’s financial statements 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 operations and/or
search for a target company, the specific impact is not readily determinable as of the date of the financial statements. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Note
2 — Revision of Previously Issued Financial Statements
On
April 12, 2021, the staff of the Securities and Exchange Commission issued a statement entitled “Staff Statement on Accounting
and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”). In the statement, the
Securities and Exchange Commission (the “SEC”) staff focused on certain settlement terms and provisions related to certain
tender offers following a Business Combination, which terms are similar to those contained in the warrant agreement, dated as of February
16, 2021, between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant
Agreement”). As a result of the SEC staff statement and in light of evolving views as to certain provisions commonly included in
warrants issued by special purpose acquisition companies, the Company re-evaluated the accounting treatment of (i) the 9,200,000 Public
Warrants and (ii) the 5,680,000 Private Placement Warrants (Collectively, the “Warrants”) (See Note 4 and Note 5).
In further consideration of the guidance in ASC
815-40, “Derivatives and Hedging; Contracts in Entity’s Own Equity,” the Company concluded that a provision in the
Warrant Agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as components of equity.
As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants should be recorded as derivative liabilities
on the balance sheet and measured at fair value at inception (on the date of the IPO) and at each reporting date in accordance with ASC
820, “Fair Value Measurement,” with changes in fair value recognized in the statement of operations in the period of change.
The Company previously accounted for all Warrants as components of equity.
After discussion and evaluation, the Company
concluded that it is appropriate to revise its previously issued audited balance sheet as of February 19, 2021 reported in its Form 8-K.
The revised classification and reported values of the Warrants as accounted for under ASC 815-40 are included in the financial statements
herein. The revision did not impact the Company’s cash or net change in cash for the quarter ended March 31, 2021.
The
following table summarizes the effect of the revision on each balance sheet line item as follows:
|
|
As Previously Reported
|
|
|
Adjustment
|
|
|
As Revised
|
|
Balance Sheet at February 19, 2021
|
|
|
|
|
|
|
|
|
|
Warrant liability
|
|
$
|
-
|
|
|
$
|
19,554,236
|
|
|
$
|
19,554,236
|
|
Total liabilities
|
|
|
10,643,236
|
|
|
|
19,554,236
|
|
|
|
30,197,472
|
|
Class A ordinary shares subject to possible redemption
|
|
|
263,892,160
|
|
|
|
(19,554,230
|
)
|
|
|
244,337,930
|
|
Class A ordinary shares
|
|
|
121
|
|
|
|
196
|
|
|
|
317
|
|
Additional paid-in capital
|
|
|
5,022,217
|
|
|
|
683,105
|
|
|
|
5,705,322
|
|
Accumulated deficit
|
|
$
|
(23,021
|
)
|
|
$
|
(683,306
|
)
|
|
$
|
(706,327
|
)
|
Note
3 — 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 unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the
fair statement of the balances and results for the periods presented. Operating results for the three and six months ended June 30, 2021
are not necessarily indicative of the results that may be expected through December 31, 2021.
The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto
included in the Form 8-K and the final prospectus filed by the Company with the SEC on February 25, 2021 and February 19, 2021, respectively.
Emerging
Growth Company Status
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 auditor 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 shareholder 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.
Use
of Estimates
The
preparation of these unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance
sheet. Actual results could differ 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 June 30, 2021 and December 31, 2020.
Cash
and Marketable Securities held in Trust Account
Investments
held in the Trust Account consist of U.S. Treasury securities. The Company classifies its U.S. Treasury securities as held-to-maturity
in accordance with ASC 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which
the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and
adjusted for the amortization or accretion of premiums or discounts.
A
decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment
that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for
the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability
and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment
is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the
severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the
general market condition in the geographic area or industry the investee operates in.
Premiums
and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest
method. Such amortization and accretion is included in the “Trust interest income” line item in the statements of operations.
Trust interest income is recognized when earned.
Fair
Value Measurements
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
|
●
|
Level 1,
defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
|
●
|
Level 2,
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
|
●
|
Level 3,
defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
The
fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value
Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and
cash equivalents, prepaid expenses, and accounts payable and accrued expenses are estimated to approximate the carrying values as of
June 30, 2021 due to the short maturities of such instruments.
The
Company’s warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and
unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and
inputs could result in a material change in fair value. See Note 7 for additional information on assets and liabilities measured at fair
value.
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. At June 30, 2021 and December 31, 2020, the Company
has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Ordinary
Shares Subject to Possible Redemption
The Company accounts for its ordinary shares
subject to possible redemption in accordance with the guidance in ASC Topic 480. Ordinary shares subject to mandatory redemption (if
any) are classified as liability instruments and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary
shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares
are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered
to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, ordinary shares subject
to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the
Company’s balance sheet.
Net
Income Per Ordinary Share
Net
income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding for each of
the periods.
The Company’s statement of operations includes
a presentation of income per share for ordinary shares subject to possible redemption in a manner similar to the two-class method of
income per ordinary share. Net income per ordinary share, basic and diluted, for redeemable ordinary shares is calculated by dividing
the interest income earned on the Trust Account, by the weighted average number of redeemable ordinary shares outstanding since original
issuance. Net income per ordinary share, basic and diluted, for non-redeemable ordinary shares is calculated by dividing the net income,
adjusted for income attributable to redeemable ordinary shares, by the weighted average number of non-redeemable ordinary shares outstanding
for the periods. Non-redeemable ordinary shares include the founder shares, as these ordinary shares do not have any redemption features
and do not participate in the income earned on the Trust Account.
|
|
For the
Three Months Ended
June 30,
2021
|
|
|
For the
Six Months Ended
June 30,
2021
|
|
Ordinary shares subject to possible redemption
|
|
|
|
|
|
|
Numerator: net income allocable to ordinary share subject to possible redemption amortized interest income on marketable securities held in trust
|
|
$
|
11,594
|
|
|
$
|
16,532
|
|
Less: interest available to be withdrawn for payment of taxes
|
|
|
(11,594
|
)
|
|
|
(16,532
|
)
|
Net income allocable to ordinary share subject to possible redemption
|
|
$
|
-
|
|
|
$
|
-
|
|
Denominator: weighted average redeemable ordinary share, basic and diluted weighted average shares outstanding, ordinary share
|
|
|
24,346,926
|
|
|
|
17,640,453
|
|
Basic and diluted net income per share, redeemable ordinary shares
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-Redeemable Ordinary shares
|
|
|
|
|
|
|
|
|
Numerator: net income minus redeemable net earnings
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,389,380
|
|
|
$
|
1,823,448
|
|
Redeemable net earnings
|
|
|
11,594
|
|
|
|
16,532
|
|
Non-redeemable net income
|
|
$
|
3,400,974
|
|
|
$
|
1,839,980
|
|
Denominator: weighted average non-redeemable ordinary share basic and diluted weighted average shares outstanding, ordinary share
|
|
|
10,153,074
|
|
|
|
8,986,619
|
|
Basic and diluted net income per share, ordinary share
|
|
$
|
0.33
|
|
|
$
|
0.20
|
|
Offering Costs associated with the Initial
Public Offering
The Company complies with the requirements of
the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering.” Offering costs
consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Accordingly,
as of February 19, 2021, offering costs of $15,629,812 (consisting of $5,520,000 of underwriting commissions, $9,660,000 of deferred
underwriters’ commission, and $449,812 other cash offering costs) have been incurred. Offering costs were allocated to the separable
financial instruments issued in the IPO based on a relative fair value basis compared to total proceeds received. Offering costs associated
with warrant liability were expensed, and offering costs associated with the Class A ordinary shares were charged to shareholders’
equity. Accordingly, $683,306 of offering costs associated with warrant liability were expensed in the statement of operations for the
six months ended June 30, 2021.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic
815, “Derivatives and Hedging.” Derivative instruments are recorded at fair value on the grant date and re-valued at each
reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified
on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required
within 12 months of the balance sheet date. The Company has determined the Warrants are a derivative instrument.
ASC 470-20, “Debt with Conversion and Other
Options” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company
applies this guidance to allocate IPO proceeds from the Units between Class A ordinary shares and Warrants, using the residual method
by allocating IPO proceeds first to fair value of the Warrants and then the Class A ordinary shares.
Income Taxes
The Company accounts for income taxes under ASC
740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both
the expected impact of differences between the unaudited condensed financial statement and tax basis of assets and liabilities and for
the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance
to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position 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. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the
Company’s evaluation, there are no significant uncertain tax positions requiring recognition in the Company’s financial statements.
Since the Company was incorporated on December 21, 2020, the 2020 tax period will be the only period subject to examination.
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 June 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 considered a Cayman Islands exempted
company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
Recent Accounting Pronouncements
Management does not believe that any recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed
financial statements.
Note 4 — Initial Public Offering
Pursuant to the IPO, the Company sold 27,600,000
Units, including 3,600,000 Units as a result of the underwriters’ full exercise of the over-allotment option, at a price of $10.00
per Unit. Each Unit consists of one Class A ordinary share and one-third of one redeemable Warrant. Each whole Warrant entitles the holder
to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The Warrants will become exercisable on
the later of 30 days after the completion of the initial Business Combination or 12 months from the closing of the IPO and will expire
five years after the completion of the initial Business Combination or earlier upon redemption or liquidation.
Following the closing of the IPO on February 19,
2021, $276,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants
was placed in a Trust Account, which will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in
money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act.
Public Warrants
Each whole Warrant entitles the holder to purchase
one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company
issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial
Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective
issue price to be determined in good faith by the 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 initial Business Combination on the date of the completion of the initial Business Combination
(net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period
starting on the trading day prior to the day on which the Company consummates the 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, the $10.00 per share redemption trigger price described below under “Redemption
of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal
to the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under
“Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” and “Redemption of warrants
when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of
the higher of the Market Value and the Newly Issued Price.
The Warrants will become exercisable on the later
of 12 months from the closing of the IPO or 30 days after the completion of its initial Business Combination and will expire five years
after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption
or liquidation.
The Company has agreed that as soon as practicable,
but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use commercially reasonable
efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares
issuable upon exercise of the Warrants, and the Company will use commercially reasonable efforts to cause the same to become effective
within 60 business days after the closing of the initial Business Combination 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.
Notwithstanding the above, if the Class A ordinary shares 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 the Company’s option, require holders of Public Warrants who exercise their Warrants to do so on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to
file or maintain in effect a registration statement, but will use commercially reasonable efforts to register or qualify the shares under
applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering
the Warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of
the number of Class A ordinary shares underlying the Warrants, multiplied by the excess of the “fair market value” (defined
below) less the exercise price of the Warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used
in the preceding sentence shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days immediately
following the date on which the notice of exercise is received by the warrant agent.
Redemption of Warrants When the Price per Class
A Ordinary Share 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 not less than 30 days’ prior written notice of redemption to each Warrant holder; and
|
|
●
|
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within any 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders.
|
Redemption of Warrants When the Price per Class
A Ordinary Share 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 Class A ordinary shares;
|
|
●
|
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per Public Share on the trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders; and
|
|
●
|
if the closing price of the Class A ordinary shares for any 20 trading days within any 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders is less than $18.00 per share, then the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
Note 5 — Private Placement
Simultaneously with the closing of the IPO, the
Sponsor purchased an aggregate of 5,680,000 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate
purchase price of $8,520,000, in a private placement. The proceeds from the Private Placement Warrants were added to the proceeds from
the IPO held in the Trust Account. The excess amount of the purchase price over the fair value of the Private Placement Warrants of $7,488,033
was charged to the shareholders’ equity, and thus $1,031,967 was recorded into additional paid-in capital.
The Private Placement Warrants (including the
Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until
30 days after the completion of the initial Business Combination and they will not be redeemable by the Company (except as described above
in Note 4, “Redemption of Warrants when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are
held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, have the option to exercise the Private Placement
Warrants on a cashless basis and have certain registration rights. Otherwise, the Private Placement Warrants have terms and provisions
that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than the Sponsor or its
permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by
the holders on the same basis as the Public Warrants. If the Company does not complete the initial Business Combination within the Combination
Period, the proceeds of the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the
Public Shares, and the Private Placement Warrants will expire worthless.
Note 6 — Related Party Transactions
Founder Shares
In December 2020, the Sponsor paid $25,000, or
approximately $0.004 per share, to cover certain offering costs in consideration for 5,750,000 Class B ordinary shares, par value $0.0001.
Up to 750,000 founder shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment
option was exercised. On February 16, 2021, the Company effected a 1:1.2 stock split of the Class B ordinary shares, resulting an aggregate
of 6,900,000 founder shares outstanding. Up to 900,000 founder shares were subject to forfeiture by the Sponsor depending on the extent
to which the underwriters’ over-allotment option was exercised. In connection with the underwriters’ full exercise of their
over-allotment option on February 19, 2021, the 900,000 shares were no longer subject to forfeiture.
The initial shareholders, directors and officers
have entered into a letter agreement with the Company, pursuant to which they have agreed to waive: (1) their redemption rights with respect
to any founder shares (as described in Note 6) and Public Shares held by them, as applicable, in connection with the completion of the
initial Business Combination; (2) their redemption rights with respect to any founder shares and Public Shares held by them in connection
with a shareholder vote to amend the amended and restated memorandum and articles of association (A) to modify the substance or timing
of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s
Public Shares if the Company does not complete the initial Business Combination within the Combination Period or (B) with respect to any
other provision relating to shareholders’ rights or pre-initial Business Combination activity; and (3) their rights to liquidating
distributions from the Trust Account with respect to any founder shares they hold if the Company fails to complete the initial Business
Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect
to any Public Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period). If the
Company submits the initial Business Combination to the public shareholders for a vote, the initial shareholders, directors and officers
have agreed to vote any founder shares and Public Shares held by them in favor of the initial Business Combination.
With certain limited exceptions, the founder shares
will not be transferable, assignable or salable by the initial shareholders until the earlier of: (1) one year after the completion of
the initial Business Combination; and (2) subsequent to the initial Business Combination (x) if the last reported sale price of the Class
A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial
Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar
transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or
other property.
Promissory Note — Related Party
On December 28, 2020, the Sponsor agreed to
loan the Company up to $300,000 to be used for a portion of the expenses of the IPO. These loans are non-interest bearing, unsecured
and are due at the earlier of June 30, 2021 or the closing of the IPO. The loan was to be repaid upon the closing of the IPO. As of
February 19, 2021, the Company had borrowed $77,012 under the promissory note. The loan under the promissory note from the Sponsor
was paid in full on February 22, 2021.
Related Party Loans
In addition, in order to finance transaction costs
in connection with an intended 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 the initial Business Combination, the Company would repay the Working Capital Loans. In the event that the initial Business
Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital
Loans, but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital
Loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to
the Private Placement Warrants. As of June 30, 2021 and December 31, 2020, the Company had no borrowings under the Working Capital Loans.
Administrative Service Fee
Commencing on the date the securities of the Company
were first listed on The Nasdaq Stock Market LLC, the Company paid the Sponsor $10,000 per month for office space, utilities, administrative
and support services. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying
these monthly fees. During the three and six months ended June 30, 2021, the Company recorded $30,000 and $50,000 of administrative service
fees, respectively.
Note 7 — Recurring Fair Value Measurements
Marketable Securities Held in Trust Account
As of June 30, 2021, investment in the Company’s
Trust Account consisted of $458 in U.S. Money Market and $276,018,020 in U.S. Treasury Securities. The Company classifies its U.S. Treasury
securities as held-to-maturity in accordance with FASB ASC 320 “Investments — Debt and Equity Securities.” Held-to-maturity
treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The Company
considers all investments with original maturities of more than three months but less than one year to be short-term investments. The
carrying value approximates the fair value due to its short-term maturity. The carrying value, excluding gross unrealized holding loss
and fair value of held to maturity securities on June 30, 2021 are as follows:
|
|
Carrying
Value/Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
as of
June 30,
2021
|
|
U.S. Money Market
|
|
$
|
458
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
458
|
|
U.S. Treasury Securities
|
|
|
276,018,020
|
|
|
|
-
|
|
|
|
(20,587
|
)
|
|
|
275,997,433
|
|
|
|
$
|
276,018,478
|
|
|
$
|
-
|
|
|
$
|
(20,587
|
)
|
|
$
|
275,997,891
|
|
Warrant Liability
At June 30, 2021, the Company’s warrant
liability was valued at $14,978,732. Under the guidance in ASC 815-40 the Warrants do not meet the criteria for equity treatment. As such,
the Warrants must be recorded on the balance sheet at fair value. This valuation is subject to re-measurement at each balance sheet date.
With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s
statements of operations.
Initial Measurement – Public Warrants
The estimated
fair value of the Public Warrants on February 19, 2021 was determined using Level 3 inputs. Inherent in a Monte-Carlo simulation
model are assumptions related to expected share-price volatility (pre-merger and post-merger), expected term, dividend yield
and risk-free interest rate. The Company estimated the volatility of its ordinary shares based on management’s understanding of
the volatility associated with instruments of other similar entities. The risk-free interest rate is based on the U.S. Treasury Constant
Maturity similar to the expected remaining life of the warrants. The expected life of the warrants is simulated based on management assumptions
regarding the timing and likelihood of completing a business combination. The dividend rate is based on the historical rate, which the
Company anticipates to remain at zero. The assumptions used in calculating the estimated fair values represent the Company’s best
estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially
different.
Subsequent Measurement — Public Warrants
The fair value of the Public Warrants on June
30, 2021 was classified as Level 1 due to the use of an observable market quote in an active market. As of June 30, 2021, the aggregate
value of Public Warrants was $9,200,000.
Initial Measurement and Subsequent Measurement – Private
Placement Warrants
The estimated
fair value of the Private Placement Warrants on February 19, 2021 and June 30, 2021 was determined using Level 3 inputs. Inherent
in a Monte-Carlo simulation model are assumptions related to expected share-price volatility (pre-merger and post-merger), expected
term, dividend yield and risk-free interest rate. The Company estimates the volatility of its ordinary shares based on management’s
understanding of the volatility associated with instruments of other similar entities. The risk-free interest rate is based on the U.S.
Treasury Constant Maturity similar to the expected remaining life of the warrants. The expected life of the warrants is simulated based
on management assumptions regarding the timing and likelihood of completing a business combination. The dividend rate is based on the
historical rate, which the Company anticipates to remain at zero. The assumptions used in calculating the estimated fair values represent
the Company’s best estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair
values could be materially different.
The key inputs for the
warrants were as follows:
Input
|
|
June 30,
2021
|
|
|
February 19,
2021
|
|
Expected term (years)
|
|
|
6.2
|
|
|
|
5.8
|
|
Expected volatility
|
|
|
18.7
|
%
|
|
|
24.1
|
%
|
Risk-free interest rate
|
|
|
1.1
|
%
|
|
|
0.7
|
%
|
Ordinary share price
|
|
$
|
9.67
|
|
|
|
9.56
|
|
The following table sets
forth a summary of the changes in the Level 3 fair value of warrants for the six months ended June 30, 2021:
|
|
Warrant
Liability
|
|
Fair value as of December 31, 2020
|
|
$
|
-
|
|
Initial fair value of warrant liability upon issuance at IPO
|
|
|
19,554,236
|
|
Revaluation of warrant liability included in other expense
|
|
|
(4,575,504
|
)
|
Transfer of Public Warrants to Level 1
|
|
|
(9,200,000
|
)
|
Fair value as of June 30, 2021
|
|
$
|
5,778,732
|
|
Recurring Fair Value Measurements
The following table presents information about
the Company’s assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2021, and indicates the
fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
|
|
June 30,
|
|
|
Quoted
Prices In
Active
Markets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Other
Unobservable
Inputs
|
|
|
|
2021
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Money Market held in Trust Account
|
|
|
458
|
|
|
|
458
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Securities held in Trust Account
|
|
$
|
275,997,433
|
|
|
$
|
275,997,433
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
275,997,891
|
|
|
$
|
275,997,891
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public Warrants
|
|
$
|
9,200,000
|
|
|
$
|
9,200,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Private Warrants
|
|
|
5,778,732
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,778,732
|
|
Warrant Liability
|
|
$
|
14,978,732
|
|
|
$
|
9,200,000
|
|
|
$
|
-
|
|
|
$
|
5,778,732
|
|
Note 8 — Commitments and Contingencies
Registration Rights
The holders of the founder shares, Private Placement
Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the
exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the
founder shares) will be entitled to registration rights pursuant to a registration rights agreement signed on February 16, 2021, requiring
the Company to register such securities for resale (in the case of the founder shares, only after conversion to the Class A ordinary shares).
The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company
registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the completion of the initial Business Combination and rights to require the Company to register for resale
such securities pursuant to Rule 415 under the Securities Act.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from February 16, 2021 to purchase up to an additional 3,600,000 units to cover over-allotments. On February 19, 2021, the underwriters
fully exercised the over-allotment option.
On February 19, 2021, the Company paid a fixed
underwriting discount of $5,520,000. Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the
gross proceeds of the IPO held in the Trust Account, or $9,660,000, upon the completion of the Company’s initial Business Combination.
Note 9 — Shareholders’ Equity
Preference shares— The Company
is authorized to issue 5,000,000 preference shares with a par value of $0.0001 and with such designations, voting and other rights and
preferences as may be determined from time to time by the Company’s board of directors. As of June 30, 2021 and December 31, 2020,
there were no preference shares issued or outstanding.
Class A Ordinary Shares— The
Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of June 30, 2021 and December
31, 2020, there were 2,907,228 and 0 Class A ordinary shares issued and outstanding, excluding 24,692,772 and 0 Class A ordinary shares
subject to possible redemption, respectively.
Class B Ordinary Shares— The
Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote
for each share of Class B ordinary shares. In December 2020, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain
offering costs in consideration for 5,750,000 Class B ordinary shares, par value $0.0001. Up to 750,000 founder shares were subject to
forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option was exercised. On February 16,
2021, the Company effected a 1:1.2 stock split of the Class B ordinary shares, resulting an aggregate of 6,900,000 founder shares outstanding
as of February 19, 2021. Up to 900,000 founder shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’
over-allotment option was exercised. In connection with the underwriters’ full exercise of their over-allotment option on February
19, 2021, the 900,000 shares are no longer subject to forfeiture. At June 30, 2021 and December 31, 2020, there were 6,900,000 Class B
ordinary shares issued and outstanding.
Holders of Class A ordinary shares and holders
of Class B ordinary shares will vote together as a single class, with each share entitling the holder to one vote.
The Class B ordinary shares will automatically
convert into Class A ordinary shares at the time of the initial Business Combination, or earlier at the option of the holder, on a one-for-one
basis, subject to adjustment for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and the like,
and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities,
are issued or deemed issued in excess of the amounts issued in the IPO and related to the closing of the initial Business Combination,
the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority
of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or
deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in
the aggregate, on an as-converted basis, 20% of the sum of all ordinary shares issued and outstanding upon the completion of the IPO plus
all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial Business Combination,
excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination. The term
“equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for the
Class A ordinary shares issued in a financing transaction in connection with the initial Business Combination, including but not limited
to a private placement of equity or debt.
Share-based Compensation— As of June
30, 2021, the Sponsor had entered into Restricted Profits Interest Award Agreements (the “Awards”) with seven participants.
The Awards are subject to a distribution threshold and vest over equal monthly installments. The Sponsor granted 185,000 share options
in exchange for services provided by these participants for the benefit of the Company. Upon a change in control, these units become fully
vested.
For the Awards granted during 2021, the weighted
average fair value per unit was estimated to be $3.45. The fair value of share-based payment awards was estimated using the Black-Scholes
option model with a volatility figure derived from the Company’s ordinary shares. The Company accounts for the expected life of
options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the
accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds
with a remaining life consistent with the expected term of the options.
In applying the Black-Scholes option pricing model,
the Company used the following assumptions during the six months ended June 30, 2021:
Risk-free interest rate
|
|
0.14%- 0.27
|
%
|
Expected term (years)
|
|
|
2.00
|
|
Expected volatility
|
|
|
18.7%-
22.1
|
%
|
Expected dividends
|
|
|
0.00
|
|
The share-based compensation expense related to
option grants was $69,084 during the six months ended June 30, 2021.
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. The Company did
not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
References to the “Company,” “NEW
VISTA ACQUISITION CORP,” “our,” “us” or “we” refer to NEW VISTA ACQUISITION CORP. The following
discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited
condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion
and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that
may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “could,” “would,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of
such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to,
those described in our other SEC filings.
Overview
We are a newly incorporated blank check company,
incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more businesses. We have not yet selected any specific Business Combination
target. We intend to effectuate our initial Business Combination using cash from the proceeds of this offering and the sale of the Private
Placement Warrants, our shares, debt or a combination of cash, shares and debt.
The issuance of additional ordinary shares or
preference shares in a Business Combination:
|
●
|
may significantly dilute the
equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary
shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary
shares;
|
|
●
|
may subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares;
|
|
●
|
could cause a change of control if a substantial number of our ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;
|
|
●
|
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
|
|
●
|
may adversely affect prevailing market prices for our Units, ordinary shares and/or Warrants; and
|
|
●
|
may not result in adjustment to the exercise price of our Warrants.
|
Similarly, if we issue debt or otherwise incur
significant indebtedness, it could result in:
|
●
|
default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;
|
|
●
|
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
|
|
●
|
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
|
|
●
|
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
|
|
●
|
our inability to pay dividends on our ordinary shares;
|
|
●
|
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
|
|
●
|
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
|
|
●
|
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
|
|
●
|
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
|
Results of Operations
As of June 30, 2021, we have not commenced
any operations. All activity for the period from December 21, 2020 (inception) through June 30, 2021 relates to our formation and
IPO. We will not generate any operating revenues until after the completion of our initial Business Combination, at the earliest. We
will generate non-operating income in the form of interest income from the proceeds derived from the IPO, which is placed in the
Trust Account.
For the three months ended June 30, 2021, we had
a net income of $3,389,380 which was comprised of operating costs of $1,881,693, interest income of $12,958 from marketable securities
held in our Trust Account, and unrealized gain on change in fair value of Warrants of $5,258,115.
For the six months ended June 30, 2021, we had
a net income of $1,823,448 which was comprised of operating costs of $2,087,228, interest income of $18,478 from marketable securities
held in our Trust Account, warrant issuance costs of $683,306, and unrealized gain on change in fair value of Warrants of $4,575,504.
Liquidity and Capital Resources
As of June 30, 2021, we had approximately $1.3
million in our operating bank account and working capital of approximately $0.2 million.
Prior to the completion of the IPO, our liquidity
needs had been satisfied through a capital contribution from the Sponsor of $25,000 to cover certain offering costs in return for the
founder shares and the loan under an unsecured promissory note from the Sponsor of $77,012. The loan under the promissory note from the
Sponsor was paid in full on February 22, 2021. Subsequent to the consummation of the IPO and Private Placement, our liquidity needs have
been satisfied through the proceeds from the Private Placement not held in the Trust Account.
Based on the foregoing, management believes that
we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a Business
Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying
and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying
for travel expenditures and consultants, selecting the target business to merge with or acquire, and structuring, negotiating and consummating
the Business Combination.
Critical Accounting Policies and Estimates
The preparation of the unaudited condensed financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported
amounts of expenses during the reporting period. Actual results could differ from those estimates. We have identified the following as
our critical accounting policies:
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are
measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either
within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s
ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the
occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as
temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic
815, “Derivatives and Hedging.” Derivative instruments are recorded at fair value on the grant date and re-valued at each
reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified
on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required
within 12 months of the balance sheet date. The Company has determined the Warrants are a derivative instrument.
Net Income Per Ordinary Share
Net income per ordinary share is computed by dividing
net income by the weighted average number of ordinary shares outstanding for each of the periods.
Off-Balance Sheet Arrangements
As of June 30, 2021, we did not have any off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
On April 5, 2012, the JOBS Act was signed
into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies.
We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which
adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable
to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating
the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth
in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions, we may not be required to, among
other things: (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant
to Section 404 of the Sarbanes-Oxley Act; (2) provide all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (3) comply with any requirement that may
be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information
about the audit and the financial statements (auditor discussion and analysis); and (4) disclose certain executive compensation-related items
such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation
to median employee compensation. These exemptions will apply for a period of five years following the completion of our offering or until
we are no longer an “emerging growth company,” whichever is earlier.