Item
1. Financial Statements.
ACCELERATE
ACQUISITION CORP.
CONDENSED
BALANCE SHEETS
|
|
June 30,
2021
|
|
|
December 31,
2020
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash
|
|
$
|
1,237,406
|
|
|
$
|
—
|
|
Prepaid expenses
|
|
|
950,333
|
|
|
|
—
|
|
Total Current Assets
|
|
|
2,187,739
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Deferred offering costs
|
|
|
—
|
|
|
|
30,000
|
|
Cash and investments held in Trust Account
|
|
|
400,010,960
|
|
|
|
—
|
|
TOTAL ASSETS
|
|
$
|
402,198,699
|
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
238,274
|
|
|
$
|
1,000
|
|
Accrued offering costs
|
|
|
—
|
|
|
|
5,000
|
|
Total Current Liabilities
|
|
|
238,274
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
Deferred underwriting fee payable
|
|
|
14,000,000
|
|
|
|
—
|
|
Warrant liability
|
|
|
25,640,000
|
|
|
|
—
|
|
Total Liabilities
|
|
|
39,878,274
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption; 35,732,042 shares at a redemption value of $10.00 per share
|
|
|
357,320,420
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
Class A common stock, $0.0001 par value; 500,000,000 shares authorized; 4,267,958 issued and outstanding (excluding 35,732,042 subject to possible redemption) as of June 30, 2021 and no issued and outstanding at December 31, 2020.
|
|
|
427
|
|
|
|
—
|
|
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 June 30, 2021 and December 31, 2020, respectively (1)
|
|
|
1,000
|
|
|
|
1,150
|
|
Additional paid-in capital
|
|
|
10,213,470
|
|
|
|
23,850
|
|
Accumulated deficit
|
|
|
(5,214,892
|
)
|
|
|
(1,000
|
)
|
Total Stockholders’ Equity
|
|
|
5,000,005
|
|
|
|
24,000
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
402,198,699
|
|
|
$
|
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 5).
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
ACCELERATE
ACQUISITION CORP.
CONDENSED
STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
|
2021
|
|
Operating and formation costs
|
|
$
|
356,996
|
|
|
$
|
1,284,852
|
|
Loss from operations
|
|
|
(356,996
|
)
|
|
|
(1,284,852
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest earned on investments held in Trust Account
|
|
|
9,974
|
|
|
|
10,960
|
|
Change in fair value of warrants
|
|
|
(11,586,668
|
)
|
|
|
(3,940,000
|
)
|
Total other income (expense), net
|
|
|
(11,576,694
|
)
|
|
|
(3,929,040
|
)
|
|
|
|
|
|
|
|
|
|
Income (Loss) before income taxes
|
|
|
(11,933,690
|
)
|
|
|
(5,213,892
|
)
|
Benefit (Provision) for income taxes
|
|
|
—
|
|
|
|
—
|
|
Net loss
|
|
$
|
(11,933,690
|
)
|
|
$
|
(5,213,892
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class A redeemable common stock
|
|
|
40,000,000
|
|
|
|
40,000,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income per share, Class A redeemable common stock
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Class B non-redeemable common stock
|
|
|
10,000,000
|
|
|
|
10,000,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share, Class B non-redeemable common stock
|
|
$
|
(1.19
|
)
|
|
$
|
(0.52
|
)
|
The
accompanying notes are an integral part of the unaudited condensed financial statements.
ACCELERATE
ACQUISITION CORP.
CONDENSED
STATEMENTS OF
CHANGES
IN STOCKHOLDERS’ EQUITY
THREE
AND SIX MONTHS ENDED JUNE 30, 2021
(UNAUDITED)
|
|
Class
A
Common Stock
|
|
|
Class
B
Common Stock(1)
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance — January 1, 2021
|
|
|
—
|
|
|
$
|
—
|
|
|
|
11,500,000
|
|
|
$
|
1,150
|
|
|
$
|
23,850
|
|
|
$
|
(1,000
|
)
|
|
$
|
24,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of 40,000,000 Units, net of underwriting discounts
|
|
|
40,000,000
|
|
|
|
4,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
364,206,317
|
|
|
|
—
|
|
|
|
364,210,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock subject to possible redemption
|
|
|
(36,925,411
|
)
|
|
|
(3,693
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(367,530,317
|
)
|
|
|
(1,720,103
|
)
|
|
|
(369,254,113
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,719,798
|
|
|
|
6,719,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – March 31, 2021
|
|
|
3,074,589
|
|
|
$
|
307
|
|
|
|
10,000,000
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
4,998,695
|
|
|
$
|
5,000,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in common stock subject to possible redemption
|
|
|
1,193,369
|
|
|
|
120
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,213,470
|
|
|
|
1,720,103
|
|
|
|
11,933,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(11,933,690
|
)
|
|
|
(11,933,690
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – June 30, 2021
|
|
|
4,267,958
|
|
|
$
|
427
|
|
|
|
10,000,000
|
|
|
$
|
1,000
|
|
|
$
|
10,213,470
|
|
|
$
|
(5,214,892
|
)
|
|
$
|
5,000,005
|
|
|
(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 5).
|
The
accompanying notes are an integral part of the unaudited condensed financial statements.
ACCELERATE
ACQUISITION CORP.
CONDENSED
STATEMENT OF CASH FLOWS
SIX
MONTHS ENDED JUNE 30, 2021 (UNAUDITED)
Cash Flows from Operating Activities:
|
|
|
|
Net loss
|
|
$
|
(5,213,892
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
Interest earned on investments held in Trust Account
|
|
|
(10,960
|
)
|
Change in fair value of warrant liability
|
|
|
3,940,000
|
|
Transaction costs incurred in connection with IPO
|
|
|
801,198
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Prepaid expenses
|
|
|
(950,333
|
)
|
Accounts Payable and Accrued expenses
|
|
|
237,274
|
|
Net cash used in operating activities
|
|
|
(1,196,713
|
)
|
|
|
|
|
|
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
|
|
|
1,237,406
|
|
Cash – Beginning of period
|
|
|
—
|
|
Cash – End of period
|
|
$
|
1,237,406
|
|
|
|
|
|
|
Non-Cash investing and financing activities:
|
|
|
|
|
Initial classification of Class A common stock subject to possible redemption
|
|
$
|
361,733,090
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
(4,412,670
|
)
|
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
JUNE
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 June 30, 2021, the Company had not commenced any operations. All activity for the period from December 30, 2020 (inception) through
June 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 Company has selected
December 31 as its fiscal year end.
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 3.
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 4.
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
JUNE
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.
The
Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation
of a Business Combination and, if the Company seeks stockholder approval, a majority of the 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 5), 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 31, 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
JUNE
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 6) 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. 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 six months ended June 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.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(Unaudited)
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.
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.
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. The portion of offering costs allocated to
the public shares has been charged to stockholders’ equity. On June 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.” Shares of Class A common stock
subject to mandatory redemption are classified as a liability instrument and is measured at fair value. Conditionally redeemable Class
A common stock (including Class A common stock that features redemption rights that is either within the control of the holder or subject
to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity.
At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features
certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future
events. Accordingly, at June 30, 2021, the 35,732,042 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 sheet.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
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. The Private
Placement Warrants 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.
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 June 30, 2021, the Company had a deferred tax asset of approximately $99,000, 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 six months ended June
30, 2021, the Company recorded no income tax expense. The Company’s effective tax rate for three and six months ended June 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 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 subject to income tax examinations by major taxing authorities since inception.
The provision for income taxes was deemed to be de minimus as of June 30, 2021.
Net
Income (Loss) per Common Share
Net
income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the
period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 20,666,666
shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants are contingent
upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(Unaudited)
The
Company’s statements of operations includes a presentation of income (loss) per share for common shares subject to possible redemption
in a manner similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for Class A redeemable
common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income taxes,
by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and
diluted, for Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A
redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable
common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned
on the Trust Account.
The
following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except share amounts):
|
|
Three Months Ended
June 30,
|
|
|
Six
Months Ended
June 30,
|
|
|
|
2021
|
|
|
2021
|
|
Redeemable Class A Common Stock
|
|
|
|
|
|
|
|
|
Numerator: Income allocable to Redeemable Class A Common Stock
|
|
|
|
|
|
|
|
|
Interest Income
|
|
$
|
9,974
|
|
|
$
|
10,960
|
|
Income and Franchise Tax
|
|
|
(9,974
|
)
|
|
|
(10,960
|
)
|
Net Income
|
|
$
|
—
|
|
|
$
|
—
|
|
Denominator: Weighted Average Redeemable Class A Common Stock
|
|
|
|
|
|
|
|
|
Redeemable Class A Common Stock, Basic and Diluted
|
|
|
40,000,000
|
|
|
|
40,000,000
|
|
Income/Basic and Diluted Redeemable Class A Common Stock
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Non-Redeemable Class A and Class B Common Stock
|
|
|
|
|
|
|
|
|
Numerator: Net Loss minus Redeemable Net Earnings
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(11,933,690
|
)
|
|
$
|
(5,213,892
|
)
|
Redeemable Net Income
|
|
|
—
|
|
|
|
—
|
|
Non-Redeemable Net Loss
|
|
$
|
(11,933,690
|
)
|
|
$
|
(5,213,892
|
)
|
Denominator: Weighted Average Non-Redeemable Class B Common Stock
|
|
|
|
|
|
|
|
|
Non-Redeemable Class B Common Stock, Basic and Diluted
|
|
|
10,000,000
|
|
|
|
10,000,000
|
|
Loss/Basic and Diluted Non-Redeemable Class B Common Stock
|
|
$
|
(1.19
|
)
|
|
$
|
(0.52
|
)
|
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(Unaudited)
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,” approximates 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
3. 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
4. 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 7). 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
JUNE
30, 2021
(Unaudited)
NOTE
5. 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 six months ended June 30, 2021, the Company incurred and paid $30,000 in fees for these services.
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 June 30, 2021 and December 31, 2020, there was $0 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 June 30, 2021 and December 31, 2020, there were no amounts outstanding under the Working Capital Loans.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(Unaudited)
NOTE
6. 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
7. 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 June 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. As of June 30, 2021, there were 4,267,958 shares
of Class A common stock issued and outstanding, excluding 35,732,042 shares of Class A common stock subject to possible redemption.
As of 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 June 30, 2021, there were 10,000,000 shares of common stock issued and outstanding, and as of December 31, 2020,
there was 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
JUNE
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
8. WARRANTS
Warrants
—As of June 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
JUNE
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;
|
|
|
|
|
●
|
at $0.10 per warrant;
|
|
|
|
|
●
|
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
JUNE
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
9. 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
June 30, 2021, assets held in the Trust Account were comprised of $400,010,960 in money market funds which are invested primarily in
U.S. Treasury Securities. During the three and six months ended June 30, 2021, the Company did not withdraw any interest income
from the Trust Account.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
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 June 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
Description
|
|
Level
|
|
|
June 30,
2021
|
|
Assets:
|
|
|
|
|
|
|
|
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund
|
|
1
|
|
|
$
|
400,010,960
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
1
|
|
|
|
16,400,000
|
|
Warrant Liability – Private Placement Warrants
|
|
3
|
|
|
|
9,240,000
|
|
The
Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our accompanying
June 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 June 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 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.
The
following table presents the quantitative information regarding Level 3 fair value measurements:
Input:
|
|
June 30,
2021
|
|
Risk-free interest rate
|
|
|
0.90
|
%
|
Effective Expiration date
|
|
|
8/01/2026
|
|
Expected volatility
|
|
|
20.3
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Stock price
|
|
$
|
9.69
|
|
|
|
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 valuation inputs or other assumptions
|
|
|
1,540,000
|
|
|
|
2,400,000
|
|
|
|
3,940,000
|
|
Fair value as of June 30, 2021
|
|
$
|
9,240,000
|
|
|
|
16,400,000
|
|
|
|
25,640,000
|
|
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 fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement during
the three months ended June 30, 2021.
NOTE
10. 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.
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
June 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 June 30, 2021, we had net loss of approximately $11.9 million, which consists of loss of approximately $11.6 million
derived from the changes in fair value of the warrant liability offset by operation costs of approximately $0.3 million.
For
the six months ended June 30, 2021, we had net loss of approximately $5.2 million, which consists of loss of approximately $3.9 million
derived from the changes in fair value of the warrant liability offset by operation costs of approximately $1.3 million.
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 4. 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 5.
For
the six months ended June 30, 2021, cash used in operating activities was approximately $1.2 million. Net loss of approximately 5.2 million
was affected by noncash charges (income) related to the change in fair value of the warrant liability of approximately $(3.9) million
and transaction costs associated with the IPO of approximately $0.8 million. Net changes in operating assets and liabilities used approximately
$0.7 million of cash for operating activities.
As
of June 30, 2021, we had investments held in the Trust Account of $400,010,960 (including approximately $10,960 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 June 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 June 30, 2021, we had cash of $1,237,406. 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 June 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’ equity section of our balance sheet.
Net
Income (Loss) Per Common Share
We
apply the two-class method in calculating earnings per share. Net income per common share, basic and diluted for Class A redeemable
common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income taxes,
by the weighted average number of Class A redeemable common stock outstanding for the period. Net loss per common share, basic and
diluted for Class B non-redeemable common stock is calculated by dividing the net income, less income attributable to Class A
redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period presented.
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.