Registration of securities issued in business combination transactions

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

v3.21.1
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
6 Months Ended
Dec. 31, 2020
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS  
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company previously accounted for its outstanding Public Warrants (as defined in Note 4) and Private Placement Warrants issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a tender or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of ordinary shares, all holders of the warrants would be entitled to receive cash for their warrants (the “tender offer provision”).

In connection with the audit of the Company’s financial statements for the period ended December 31, 2020, the Company’s management further evaluated the warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity.  ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock.  Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant.  Based on management’s evaluation, the Company’s audit committee, in consultation with management and after discussion with the Company’s independent registered public accounting firm, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s ordinary shares in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s audit committee, in consultation with management and after discussion with the Company’s independent registered public accounting firm, concluded the tender offer provision included in the warrant agreement fails the “classified in shareholders’ equity” criteria as contemplated by ASC Section 815-40-25.

As a result of the above, the Company should have classified the warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the warrants at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.

The Company’s accounting for the warrants as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported cash or investment held in the trust account.

 

 

 

 

 

 

 

 

 

 

 

 

 

As

 

 

 

 

 

 

 

 

Previously

 

 

 

As

 

    

Reported

    

 

Adjustments

    

Restated

Balance sheet as of September 25, 2020 (audited)

 

 

 

 

 

 

 

 

 

Warrant Liability

 

$

 —

 

$

13,679,333

 

$

13,679,333

Ordinary Shares Subject to Possible Redemption

 

 

213,557,280

 

 

(13,679,333)

 

 

199,877,947

Class A Ordinary Shares

 

 

114

 

 

137

 

 

251

Additional Paid-in Capital

 

 

5,014,340

 

 

510,845

 

 

5,525,185

Accumulated Deficit

 

 

(15,092)

 

 

(510,982)

 

 

(526,074)

 

 

 

 

 

 

 

 

 

 

Balance sheet as of September 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Warrant Liability

 

$

 —

 

$

13,277,000

 

$

13,277,000

Ordinary Shares Subject to Possible Redemption

 

 

213,530,925

 

 

(13,277,000)

 

 

200,253,925

Class A Ordinary Shares

 

 

114

 

 

133

 

 

247

Additional Paid-in Capital

 

 

5,040,694

 

 

108,515

 

 

5,149,209

Accumulated Deficit

 

 

(41,447)

 

 

(108,648)

 

 

(150,095)

 

 

 

 

 

 

 

 

 

 

Balance sheet as of December 31, 2020 (audited)

 

 

  

 

 

  

 

 

  

Warrant Liability

 

$

 —

 

$

13,272,784

 

$

13,272,784

Ordinary Shares Subject to Possible Redemption

 

 

226,248,228

 

 

(13,272,784)

 

 

(212,975,444)

Class A Ordinary Shares

 

 

135

 

 

133

 

 

268

Additional Paid-in Capital

 

 

6,553,617

 

 

104,299

 

 

6,657,916

Accumulated Deficit

 

 

(1,554,342)

 

 

(104,432)

 

 

(1,658,774)

 

 

 

 

 

 

 

 

 

 

Period from July 7, 2020 (inception) to September 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Change in fair value of warrant liability

 

$

 —

 

$

402,333

 

$

402,333

Formation and Operational cost

 

 

15,092

 

 

510,982

 

 

526,074

Net loss

 

 

(41,447)

 

 

(108,648)

 

 

(150,095)

Weighted average shares outstanding of Class A redeemable ordinary shares

 

 

  

 

 

19,987,795

 

 

19,987,795

Weighted average shares outstanding of Class B non-redeemable ordinary shares

 

 

5,698,351

 

 

87,688

 

 

5,786,039

Basic and diluted net loss per share, Class B

 

 

(0.01)

 

 

(0.02)

 

 

(0.03)

 

 

 

 

 

 

 

 

 

 

Period from July 7, 2020 (inception) to December 31, 2020 (audited)

 

 

  

 

 

  

 

 

  

Change in fair value of warrant liability

 

$

 —

 

$

406,549

 

$

406,549

Formation and Operational cost

 

 

1,603,147

 

 

510,982

 

 

2,114,129

Net loss

 

 

(1,554,342)

 

 

(104,432)

 

 

(1,658,774)

Weighted average shares outstanding of Class A redeemable ordinary shares

 

 

22,676,053

 

 

(1,279,064)

 

 

21,396,989

Weighted average shares outstanding of Class B non-redeemable ordinary shares

 

 

6,500,406

 

 

729,819

 

 

7,230,225

Basic and diluted net loss per share, Class B

 

 

(0.25)

 

 

(0.01)

 

 

(0.26)

 

 

 

 

 

 

 

 

 

 

Cash Flow Statement for the Period from July 7, 2020 (inception) to September 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net loss

 

 

(41,447)

 

 

(108,648)

 

 

(150,095)

Allocation of initial public offering costs to warrant liability

 

 

 —

 

 

510,982

 

 

510,982

Change in fair value of warrant liability

 

 

 —

 

 

402,333

 

 

402,333

Initial classification of warrant liability

 

 

 —

 

 

13,679,333

 

 

13,679,333

Initial classification of common stock subject to possible redemption

 

 

213,557,280

 

 

(13,679,333)

 

 

199,877,947

Change in value of common stock subject to possible redemption

 

 

(26,355)

 

 

402,333

 

 

375,978

Cash Flow Statement for the Period from July 7, 2020 (inception) to December 31, 2020 (audited)

 

 

  

 

 

  

 

 

  

Net loss

 

$

(1,554,342)

 

$

(104,432)

 

$

(1,658,774)

Change in fair value of warrant liability

 

 

 —

 

 

406,549

 

 

406,549

Initial classification of warrant liability

 

 

 —

 

 

13,679,333

 

 

13,679,333

Initial classification of common stock subject to possible redemption

 

 

227,787,480

 

 

(13,679,333)

 

 

214,108,147

Change in value of common stock subject to possible redemption

 

 

(1,539,252)

 

 

406,549

 

 

(1,132,703)