References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to Fintech Acquisition Corp. VI. References to our "management"
or our "management team" refer to our officers and directors, and references to
the "Sponsor" refer to FinTech Investor Holdings VI, LLC and FinTech Masala
Advisors VI, 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 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 Quarterly
Report including, without limitation, statements in this "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding the completion of an initial 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 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. 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 Annual Report on Form 10-K 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
November 4, 2020 for the purpose of acquiring, through a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or other similar
business transaction, one or more operating businesses or assets (a "Business
Combination"). We intend to effectuate our Business Combination using cash from
the proceeds of the Initial Public Offering and the sale of the Private
Placement Units, 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 (other than searching for a Business
Combination after our Initial Public Offering) nor generated any revenues to
date. Our only activities from November 4, 2020 (inception) through June 30,
2022 were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and, after the Initial Public Offering,
identifying a target company for an initial Business Combination. We do not
expect to generate any operating revenues until after the completion of our
Business Combination, at the earliest. We generate non-operating income in the
form of interest income from the proceeds derived from the Initial Public
Offering placed 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, 2022, we had net income of $2,149,424, which
consists of interest earned on investments held in the Trust Account of $337,496
and change in fair value of warrant liabilities of $2,312,100, partially offset
by general and administrative expenses of $450,732 and provision for income
taxes of $49,440.
For the six months ended June 30, 2022, we had net income of $3,229,102, which
consists of interest earned on investments held in the Trust Account of $362,672
and change in fair value of warrant liabilities of $4,431,525, partially offset
by general and administrative expenses of $1,515,655 and provision for income
taxes of $49,440.
For the three months ended June 30, 2021, we had a net loss of $624,535, which
consists of general and administrative expenses of $93,117 and transaction costs
associated with the Initial Public Offering of $531,488, partially offset by
interest earned on investments held in the Trust Account of $70.
For the six months ended June 30, 2021, we had a net loss of $626,020, which
consists of general and administrative expenses of $94,602 and transaction costs
associated with the Initial Public Offering of $531,488, partially offset by
interest earned on investments held in the Trust Account of $70.
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Liquidity and Capital Resources
On June 28, 2021, we consummated the Initial Public Offering of 25,000,000 units
(the "Units"), which includes the partial exercise by the underwriter of its
over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit,
generating gross proceeds of $250,000,000.
Simultaneously with the closing of the Initial Public Offering, we consummated
the sale of an aggregate of 690,000 units (the "Private Placement Units") at a
price of $10.00 per Private Placement Unit in a private placement to FinTech
Investor Holdings VI, LLC and Cantor Fitzgerald, that closed simultaneously with
the Initial Public Offering, generating gross proceeds of $6,900,000.
Following the Initial Public Offering, the partial exercise of the
over-allotment option, and the sale of the Private Placement Units, a total of
$250,000,000 was placed in the Trust Account. We incurred $15,517,893 in Initial
Public Offering related costs, including $517,893 of other costs, $4,400,000 of
underwriting fees and $10,600,000 in deferred underwriting fees.
For the six months ended June 30, 2022, cash used in operating activities was
$599,224. Net income of $3,229,102 was affected by interest earned on marketable
securities held in the Trust Account of $362,672 and change in fair value of
warrant liabilities of $4,431,525. Changes in operating assets and liabilities
provided $965,871 of cash for operating activities.
For the six months ended June 30, 2021, cash used in operating activities was
$52,229. Net loss of $626,020 was affected by operating costs paid through
promissory note of $1,056, interest earned on marketable securities held in the
Trust Account of $70 and transaction costs associated with the Initial Public
Offering of $531,488. Changes in operating assets and liabilities provided
$41,317 of cash for operating activities.
As of June 30, 2022, we had marketable securities held in the Trust Account of
$250,223,840 (including $362,672 of interest income, net of $147,402 withdrawn
for tax payment purposes) consisting of U.S. Treasury Bills with a maturity of
185 days or less. We may withdraw interest to pay taxes. During the three and
six months ended June 30, 2022, we withdrew $147,402 of the interest income from
the Trust Account to pay franchise and income taxes. 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 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, 2022, we had $391,807 of cash held outside of the Trust Account.
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 an affiliate of the
Sponsor or certain of our officers and directors may, but are not obligated to,
loan the Company funds as may be required ("Working Capital Loans"), which will
be repaid only upon the consummation of a Business Combination. If the Company
does not consummate a Business Combination, the Company may use a portion of any
funds held outside the Trust Account to repay the Working Capital Loans;
however, no proceeds from the Trust Account may be used for such repayment. If
such funds are insufficient to repay the Working Capital Loans, the unpaid
amounts would be forgiven. Up to $2,000,000 of the Working Capital Loans may be
converted into units at a price of $10.00 per unit at the option of the lender
at the time of the Business Combination. The units would be identical to the
Private Placement Units. At June 30, 2022, there were no Working Capital Loans
outstanding.
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.
Going Concern
We have until December 28, 2022 to consummate a Business Combination. It is
uncertain that we will be able to consummate a Business Combination by this
time. If a Business Combination is not consummated by this date, there will be a
mandatory liquidation and subsequent dissolution. Additionally, we had a working
capital deficit of $463,511 as of June 30, 2022. Management has determined that
the mandatory liquidation and liquidity condition, should a Business Combination
not occur, and potential subsequent dissolution raises substantial doubt about
our ability to continue as a going concern. No adjustments have been made to the
carrying amounts of assets or liabilities should we be required to liquidate
after December 28, 2022.
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Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of June 30, 2022. 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
or an affiliate or designee of the Sponsor a monthly fee of $32,500 for office
space, utilities, and shared personnel support services. We began incurring
these fees on June 24, 2021 and will continue to incur these fees monthly until
the earlier of the completion of the Business Combination and our liquidation.
The underwriter is entitled to a deferred fee of (i) 4.0% of the gross proceeds
of the initial 22,000,000 Units sold in the Initial Public Offering, or
$8,800,000, and (ii) 6% of the gross proceeds from the 3,000,000 Units sold
pursuant to the over-allotment option, or $1,800,000. The deferred fee will
become payable to the representative 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 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 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 ASC 815.
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 them 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 Placement Warrants and the Public Warrants for periods
where no observable traded price was available are valued using a binomial
lattice model. 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. The Private Placement Warrants are classified as
Level 2 and use the quoted price in an active market for a similar liability for
the fair value.
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 ASC Topic 480 "Distinguishing Liabilities from
Equity." 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 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, Class A common stock subject
to possible redemption is presented as temporary equity, outside of the
stockholders' equity section of our balance sheets. 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.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net income (loss) by
the weighted average number of shares of common stock outstanding for the
period. 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 common stock. Accretion associated with the redeemable shares
of Class A common stock is excluded from earnings per share as the redemption
value approximates fair value.
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Recent Accounting Standards
In August 2020, the FASB issued ASU No. 2020-06, "Debt-Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in
Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies
accounting for convertible instruments by removing major separation models
required under current GAAP. ASU 2020-06 removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope
exception, and it also simplifies the diluted earnings per share calculation in
certain areas. ASU 2020-06 is effective for fiscal years beginning after
December 15, 2023, including interim periods within those fiscal years, with
early adoption permitted. The impact of the adoption of ASU 2020-06 is being
assessed by the Company, however no significant impact on the condensed
financial statements is anticipated.
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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