References to the "Company", "our", "us" or "we" refer to Crucible Acquisition
Corporation. The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
audited financial statements and the notes related thereto which are included in
"Item 8. Financial Statements and Supplementary Data" of this Annual Report.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of many factors, including those set forth under "Cautionary Note
Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk
Factors" and elsewhere in this Annual Report.
Overview
We are a blank check company incorporated as a Delaware corporation on
September 16, 2020 and formed for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar
Business Combination with one or more businesses. Prior to the consummation of
our Initial Public Offering, we have
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not selected any Business Combination target and we have not, nor has anyone on
our behalf, initiated any substantive discussions, directly or indirectly, with
any Business Combination target. We intend to effectuate our initial Business
Combination using cash from the proceeds of the Initial Public Offering and the
sale of the Private Placement Warrants, our shares, debt or a combination of
cash, shares and debt.
Our sponsor is Foundry Crucible I, LLC, a Delaware limited liability company. We
are an emerging growth company and, as such, we are subject to all of the risks
associated with emerging growth companies.
The registration statement for our Initial Public Offering was declared
effective on January 4, 2021. On January 7, 2021, we consummated the Initial
Public Offering of 25,875,000 Units, including 3,375,000 Over-Allotment Units,
at $10.00 per Unit, generating gross proceeds of approximately $258.8 million,
and incurring offering costs of approximately $14.7 million, of which
approximately $9.1 million was for deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 4,783,333 warrants at a price of $1.50 per Private
Placement Warrant to the Sponsor, generating proceeds of approximately
$7.2 million.
Upon the closing of the Initial Public Offering and the Private Placement,
approximately $258.8 million ($10.00 per Unit) of the net proceeds of the
Initial Public Offering and certain of the proceeds of the Private Placement was
placed in the Trust Account, and 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, as determined by us, until the earlier of: (i) the
completion of a Business Combination and (ii) the distribution of the Trust
Account as described below.
Our management has broad discretion with respect to the specific application of
the net proceeds of the Initial Public Offering and the sale of the Private
Placement Warrants, although substantially all of the net proceeds are intended
to be applied generally toward consummating a Business Combination.
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or January 7, 2023 (the "Combination
Period"), we 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 us to pay our franchise and income taxes (less up to $100,000 of
interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will completely extinguish Public Stockholders'
rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of the
remaining stockholders and the board of directors, dissolve and liquidate,
subject in each case to our obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law.
Results of Operations
We have neither engaged in any operations nor generated any revenues from
September 16, 2020 (inception) through December 31, 2020. Our only activities
since inception have been organizational activities and those necessary to
prepare for the Initial Public Offering. Following the Initial Public Offering,
we will not generate any operating revenues until after completion of our
initial Business Combination. We will generate non-operating income in the form
of interest income on cash and cash equivalents after the Initial Public
Offering. We expect to incur increased 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 period from September 16, 2020 (inception) through December 31, 2020, we
had a net loss of approximately $2,300, which consisted of general and
administrative expenses and franchise tax expenses.
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Liquidity and Capital Resources
As of December 31, 2020, we had approximately $18,000 in cash and working
capital deficit of approximately $253,000.
Our liquidity needs have been satisfied prior to the completion of the Initial
Public Offering through receipt of $25,000 from the sale of the Founder Shares
to our Sponsor and loan proceeds of $80,000 from our Sponsor under an unsecured
promissory note (the "Note"). Through December 31, 2020 and prior to the Initial
Public Offering, we borrowed $80,000 under the Note and repaid it in full on
January 7, 2021. Subsequent to the consummation of the Initial Public Offering,
our liquidity has been satisfied through the net proceeds from the consummation
of the Initial Public Offering and the Private Placement held outside of 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 use the funds held outside of the Trust Account for paying
existing accounts payable, identifying and evaluating prospective initial
Business Combination candidates, performing due diligence on prospective target
businesses, paying for travel expenditures, selecting the target business to
merge with or acquire, and structuring, negotiating and consummating the
Business Combination.
Management continues to evaluate the impact of the COVID-19 pandemic and has
concluded that 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.
Related Party Transactions
Founder Shares
On September 25, 2020, the Sponsor purchased 5,750,000 Founder Shares, for an
aggregate price of $25,000. On January 4, 2021, we effected a 1:1.125 stock
split of Class B common stock, resulting in an aggregate of 6,468,750 shares of
Class B common stock outstanding. All shares and associated amounts have been
retroactively restated to reflect the stock split. The initial stockholders
agreed to forfeit up to 843,750 Founder Shares to the extent that the
over-allotment option was not exercised in full by the underwriters, so that the
Founder Shares would represent 20.0% of our issued and outstanding shares after
the Initial Public Offering. The underwriter exercised its over-allotment option
in full on January 7, 2021; thus, these 843,750 shares of Class B common stock
were no longer subject to forfeiture.
The initial stockholders agreed, subject to limited exceptions, not to transfer,
assign or sell any of the Founder Shares until the earlier to occur of: (A) one
year after the completion of the initial Business Combination; and
(B) subsequent to the initial Business Combination (x) if the last reported sale
price of the shares of Class A common stock equals or exceeds $12.00 per share
(as adjusted for stock splits, stock dividends, 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 we complete a liquidation, merger, stock
exchange, reorganization or other similar transaction that results in all of the
Public Stockholders having the right to exchange their shares of common stock
for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 4,783,333 Private Placement Warrants at a price of
$1.50 per Private Placement Warrant to the Sponsor, generating proceeds of
approximately $7.2 million.
Each whole Private Placement Warrant is exercisable for one whole share of
Class A common stock at a price of $11.50 per share. A portion of the proceeds
from the sale of the Private Placement Warrants to the Sponsor was added to the
proceeds from the Initial Public Offering held in the Trust Account. If we do
not complete a Business Combination within the Combination Period, the Private
Placement Warrants will expire worthless. The Private Placement Warrants will be
non-redeemable for cash and exercisable on a cashless basis so long as they are
held by the Sponsor or its permitted transferees.
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The Sponsor and our officers and directors agreed, subject to limited
exceptions, not to transfer, assign or sell any of their Private Placement
Warrants until 30 days after the completion of the initial Business Combination.
Related Party Loans
On September 25, 2020, the Sponsor agreed to loan us an aggregate of up to
$300,000 to cover expenses related to the Initial Public Offering pursuant to a
promissory note. This loan was non-interest bearing and payable upon the
completion of the Initial Public Offering. We borrowed $80,000 under the Note
prior to the Initial Public Offering and repaid it in full on January 7, 2021.
In addition, in order to finance transaction costs in connection with a Business
Combination, the Sponsor or an affiliate of the Sponsor, or certain of our
officers and directors may, but are not obligated to, loan us funds as may be
required ("Working Capital Loans"). If we complete a Business Combination, we
would repay the Working Capital Loans out of the proceeds of the Trust Account
released to us. 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, we may use a portion of proceeds held outside the Trust Account
to repay the Working Capital Loans but no proceeds held in the Trust Account
would be used to repay the Working Capital Loans. Except for the foregoing, the
terms of such Working Capital Loans, if any, have not been determined and no
written agreements exist with respect to such loans. The Working Capital Loans
would either be repaid upon consummation of a Business Combination or, at the
lenders' discretion, up to $1.5 million 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. As of December 31, 2020, we had no borrowings under the Working
Capital Loans.
Administrative Services Agreement
We entered into an agreement that provides, commencing on the effective date of
the prospectus for the Initial Public Offering and through the earlier of
consummation of the initial Business Combination or our liquidation, we agree to
pay the Sponsor a total of $20,000 per month for administrative and support
services.
Our officers or directors will be reimbursed for any out-of-pocket expenses
incurred in connection with activities on our behalf such as identifying
potential target businesses and performing due diligence on suitable Business
Combinations. Our audit committee will review on a quarterly basis all payments
that were made to the Sponsor, officers or directors, or our or their
affiliates. Any such payments prior to an initial Business Combination will be
made using funds held outside the Trust Account. Other than quarterly audit
committee review of such payments, we do not expect to have any additional
controls in place governing the reimbursement payments to our directors and
officers for their out-of-pocket expenses incurred in connection with
identifying and consummating an initial Business Combination.
Other Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans, if any, (and any shares of
Class A common stock issuable upon the exercise of the Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital
Loans and upon conversion of the Founder Shares) are entitled to registration
rights pursuant to a registration rights agreement signed upon the consummation
of the Initial Public Offering. The holders of these securities are entitled to
make up to three demands, excluding short form demands, that we register 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. We will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of Initial Public
Offering to purchase up to 3,375,000 additional Units to cover over-allotments,
if any, at the Initial Public Offering price less the underwriting discounts and
commissions. The underwriters exercised the over-allotment option in full on
January 7, 2021.
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The underwriters were entitled to an underwriting discount of $0.20 per Unit, or
approximately $5.2 million in the aggregate, paid upon the closing of the
Initial Public Offering. In addition, the underwriters were entitled to a
deferred fee of $0.35 per Unit, or approximately $9.1 million 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 we complete a Business
Combination, subject to the terms of the underwriting agreement.
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