References in this Quarterly Report on Form 10-Q for the quarterly period ended
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.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report contains statements that are forward-looking and as such
are not historical facts. This includes, without limitation, statements
regarding our financial position, business strategy and the plans and objectives
of management for future operations, including with respect to our proposed
business combination with
The forward-looking statements contained in this Quarterly Report are based on
our current expectations and beliefs concerning future developments and their
potential effects on us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which are beyond
our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these
forward-looking statements. The following is a summary of the principal risk
factors that make investing in our securities risky and may materially adversely
affect our business, financial condition, results of operations and cash flows.
This summary should be read in conjunction with the more complete discussion of
the risk factors we face, which are set forth in Item 1A. "Risk Factors" of
Amendment No. 1 to our Annual Report on Form 10-K/A for the fiscal year ended
? our being a company with no operating history and no operating revenues;
? our ability to select an appropriate target business or businesses;
? our ability to complete our initial business combination, including our
recently announced proposed business combination with Berkshire Grey;
? our expectations around the performance of a prospective target business or
businesses;
? our success in retaining or recruiting, or changes required in, our officers,
key employees or directors following our initial business combination;
? our directors and officers allocating their time to other businesses and
potentially having conflicts of interest with our business or in approving our
initial business combination;
? the ability of our directors and officers to generate a number of potential
business combination opportunities;
? our potential ability to obtain additional financing to complete our initial
business combination;
? our pool of prospective target businesses;
? our ability to consummate an initial business combination due to the
uncertainty resulting from the recent COVID-19 pandemic and other events (such
as terrorist attacks, natural disasters or a significant outbreak of other
infectious diseases);
? our public securities' potential liquidity and trading;
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? the lack of a market for our securities;
? the use of proceeds not held in the Trust Account (as defined below) or
available to us from interest income on the Trust Account balance;
? the Trust Account not being subject to claims of third parties;
? our financial performance; and
? the other risk and uncertainties discussed in "Item 1A. Risk Factors" in our
Annual Report and our other filings with the
prospectus/proxy statement relating to our proposed business combination with
Berkshire Grey.
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Overview
We are a blank check company formed under the laws of the
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Business Combination
On
Pursuant to the Merger Agreement, Merger Sub will merge with and into Berkshire Grey, with Berkshire Grey being the surviving corporation of the merger and a direct, wholly owned subsidiary of the Company.
Subject to the terms and conditions of the Merger Agreement, the consideration
to be paid in respect of each share of Berkshire Grey Common Stock issued and
outstanding immediately prior to the effective time of the Merger will be a
number of shares of our newly-issued Class A Stock, equal to (x)
At the Closing, each outstanding option to acquire Berkshire Grey Common Stock and each award of restricted Berkshire Grey Common Stock will be converted into the right to receive an option relating to shares of Class A Stock and an award of restricted shares of Class A Stock, as applicable, upon substantially the same terms and conditions, including with respect to vesting and termination-related provisions, as existed prior to the Closing, except that the number of shares underlying such option and the exercise price and the number of shares subject to restricted stock awards, in each case, shall be determined as set forth in the Merger Agreement.
The Merger Agreement contains customary representations, warranties and covenants by the parties thereto and the closing is subject to certain conditions as further described in the Merger Agreement.
Additional information regarding Berkshire Grey and the business combination is
available in our preliminary prospectus/proxy statement initially filed with the
19 Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities through
For the three months ended
Liquidity and Capital Resources
Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of common stock by the Sponsor and loans from our Sponsor.
On
Following the Initial Public Offering, the full exercise of the over-allotment
option, and the sale of the Private Placement Warrants, a total of
For the three months ended
As of
As of
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In order to fund working capital deficiencies or finance transaction costs in
connection with a business combination, the Sponsor or an affiliate of the
Sponsor or certain of our directors and officers 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
We may need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors or third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company's ability to continue as a going concern through one year from the issuance of these financial statements.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
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
The underwriter is entitled to a deferred fee of
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Warrant Liability
We account for the warrants issued in connection with our Initial Public Offering in accordance with the guidance contained in ASC 815-40-15-7D 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 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 statement of operations. For periods subsequent to the detachment of the warrants from the Units, the close price of the Public Warrant price was used as the fair value of the Public Warrants and Private Placement Warrants as of each relevant date.
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Class A Common Stock Subject to Possible Redemption
We account for our shares of 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 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 common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders' equity section of our balance sheet.
Net Loss per Share
Net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in its Initial Public Offering and Private Placement Warrants to purchase an aggregate of 14,750,000 shares in the calculation of diluted loss 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.
The Company's statement of operations includes a presentation of loss per share for common stock subject to possible redemption in a manner similar to the two-class method of loss per share. Net loss per share, basic and diluted, for common stock subject to possible redemption is calculated by dividing the proportionate share of loss on marketable securities held by the Trust Account by the weighted average number of shares of common stock subject to possible redemption outstanding since original issuance.
Net loss per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net loss, adjusted for loss on marketable securities attributable to Class A common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period.
Non-redeemable common stock includes founder shares, alignment shares and non-redeemable Class A common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the loss on marketable securities based on non-redeemable Class A common stock's proportionate interest.
Recent Accounting Standards
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
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