References to the "Company", "our", "us" or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We have based these forward-looking statements on
our current expectations and projections about future events. These
forward-looking statements are subject to known and unknown risks, uncertainties
and assumptions about us that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Such statements include, but are not limited
to, possible business combinations and the financing thereof, and related
matters, as well as all other statements other than statements of historical
fact included in this Form 10-Q. Factors that might cause or contribute to such
a discrepancy include, but are not limited to, those described in the "Risk
Factors" detailed in Part I, Item 1A of our Annual Report on Form 10-K for the
fiscal year ended
Overview
We are a blank check company incorporated on
Our sponsor is
The registration statement for our Initial Public Offering was declared
effective on
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 5,013,333 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants")
at a price of
Upon the closing of the Initial Public Offering and the Private Placement,
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. There is no assurance that we will be able to complete a Business Combination successfully.
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We must complete an initial Business Combination 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 commissions and taxes payable on the income earned on the trust account). However, we 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.
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or
Results of Operations
Our entire activity since inception through
For the three months ended
For the three months ended
For the six months ended
For the six months ended
Liquidity and Capital Resources
As of
Prior to our Initial Public Offering, our liquidity needs to date have been
satisfied through receipt of
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has been satisfied through the net proceeds from the consummation of the Initial
Public Offering, the Private Placement held outside of the Trust Account, and
loans from the Sponsor of
Our Sponsor or an affiliate of the Sponsor, or certain of the Company's officers
and directors intend, but are not obligated, to provide Working Capital Loans as
needed to meet liquidity needs. On
See Note 5 to the unaudited condensed financial statements in Part 1 Item 1 for a description of the Agreements and the underlying promissory notes.
Based on the foregoing, management believes that we will have borrowing capacity to meet our needs through the earlier of the consummation of an Initial 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 Initial Business Combination.
However, in connection with our assessment of going concern considerations in
accordance with FASB's ASC Topic 205-40, "Presentation of Financial Statements -
Going Concern," management has determined that if we are unable to complete a
Business Combination by
Management continues to evaluate the impact of the COVID-19 pandemic and the
conflict in
Related Party Transactions
Founder Shares
On
Of the 4,870,588 shares of Class B Common Stock outstanding, an aggregate of
1,803,922 shares (up to 235,294 Contingent Founder Shares were subject to
forfeiture by our Sponsor if the over-allotment option was not exercised in full
or in part by the underwriters) (the "Contingent Founder Shares") are not
transferable, assignable or salable until (A) with respect to half of the
Contingent Founder Shares, if the last reported sale price of Class A Common
Stock equals or exceeds
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the remaining Contingent Founder Shares, if the last reported sale price of
Class A Common Stock equals or exceeds
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 or (B) subsequent
to the initial Business Combination, (x) if the last reported sale price of
Class A Common Stock equals or exceeds
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, we consummated
the private Placement of 5,013,333 Private Placement Warrants at a price of
Each whole Private Placement Warrant is exercisable for one whole share of Class
A Common Stock at a price of
Our Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell the Private Placement Warrants until 30 days after the completion of the initial Business Combination. The Sponsor transferred 1,478,933 of its Private Placement Warrants to certain employees of its ultimate parent entity, Hamilton Lane Incorporated, as permitted transferees for services rendered to Hamilton Lane Incorporated in connection with the Company.
Related Party Loans
On
In addition, in order to fund working capital deficiencies or finance
transaction costs in connection with a Business Combination, our Sponsor or an
affiliate of our Sponsor, or certain of our officers and directors intend, but
are not obligated to, loan us funds as may be required ("Working Capital
Loans"). If we complete a Business Combination, we may repay the Working Capital
Loans out of the proceeds of the Trust Account released to us. Otherwise, the
Working Capital Loans could 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. The Working Capital Loans would either be repaid upon
consummation of a Business Combination or, at the lender's discretion, up to
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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) were entitled to registration rights pursuant to a registration rights agreement signed prior to the consummation of the Initial Public Offering. These holders will be entitled to certain demand and "piggyback" registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting agreement
The underwriters were entitled to an underwriting discount of
Critical Accounting Policies and Estimates
The preparation of unaudited condensed financial statements and related
disclosures in conformity with accounting principles generally accepted in
Investments Held in the Trust Account
Our portfolio of investments held in the Trust Account is comprised of
Class A Common Stock Subject to Possible Redemption
We account for Class A common stock subject to possible redemption in accordance
with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity."
Common stock subject to mandatory redemption (if any) is classified as a
liability instrument and measured at fair value. Conditionally redeemable common
stock (including common stock that features redemption rights that are 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 outstanding common stock features certain redemption rights that are
considered to be outside of our control and subject to the occurrence of
uncertain future events. Accordingly, at
Under ASC 480-10-S99, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value, which approximates fair value. The change
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in the carrying value of Class A common stock subject to possible redemption resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit and Class A common stock.
Derivative Warrant liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, Derivatives and Hedging ("ASC 815"), Embedded Derivatives ("ASC 815-15"). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40, Contracts in Entity's Own Equity ("ASC 815-40"). Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our unaudited condensed statement of operations. The fair value of the Public Warrants issued in connection with the Public Offering and Private Placement Warrants were initially measured at fair value using a likely modified Black-Scholes model. The fair value of Public Warrants issued in connection with the Initial Public Offering has been subsequently measured based on the listed market price of such warrants, a Level 1 measurement. Subsequently, the fair value of the Private Placement Warrants has been estimated based on the observed price for Public Warrants, a Level 2 measurement.
Net Income (Loss) Per Share of Common Stock
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per common share is calculated by dividing the net income (loss) adjusted for the effects of a deemed dividend to Class A stockholders by the weighted average shares of common stock outstanding for the respective period.
The calculation of weighted average shares of Class B common stock outstanding was reduced for an aggregate of 1,803,922 shares of Class B common stock (the "Contingent Founder Shares") held by the Sponsor that are subject to forfeiture and transfer restrictions unless and until the trading price of Class A common stock exceeds certain price thresholds during specified periods of time following the closing of the Initial Business Combination.
We have not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of 14,213,333 shares of common stock in the calculation of diluted loss per common share, because their exercise is contingent upon future events. As a result, diluted net loss per common share is the same as basic net loss per common stock for the periods presented.
Recent Accounting Pronouncements
Our management does not believe there are any recently issued, but not yet effective, accounting pronouncements, if currently adopted, that would have a material effect on our unaudited condensed financial statements.
Off-balance sheet arrangements; commitments and contractual obligations; quarterly results
As of
JOBS Act
On
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companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm's attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the principal executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of the Initial Public Offering or until we are no longer an "emerging growth company," whichever is earlier.
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