Restatement - Warrant Treatment OnApril 12, 2021 , the Acting Director of theDivision of Corporation Finance and Acting Chief Accountant of theU.S. Securities and Exchange Commission (the "SEC") issued a statement (the "Statement") discussing the accounting implications of certain terms that are common in warrants issued by special purpose acquisition companies ("SPACs"). Specifically, the Statement focused on certain settlement terms and provisions that are similar to those contained in the Warrant Agreement, datedOctober 20, 2020 , between the Company andContinental Stock Transfer & Trust Company , aNew York Corporation , as warrant agent, entered into in connection with the Company's initial public offering (the "IPO"). In light of the Statement, the Company's management reevaluated the accounting treatment of (i) the 6,666,667 redeemable warrants (the "Public Warrants") that were included in the units issued by the Company in its IPO and (ii) the 3,333,333 redeemable warrants (the "Sponsor Warrants") that were issued to the Company's sponsor and the 666,667 redeemable warrants (collectively with the Public Warrants and the Sponsor Warrants, the "Warrants") that were issued toCantor Fitzgerald & Co. , in each case in a private placement that closed concurrently with the closing of the IPO, and determined to classify the Warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. While the Company has not generated any operating revenues to date and will not generate any operating revenues until after completion of its initial business combination, at the earliest, the change in fair value of the Warrants is a non-cash charge and will be reflected in the Company's statement of operations. OnMay 19, 2021 , the Company's management, after consultation with the audit committee of the board of directors of the Company (the "Audit Committee"), concluded that, in light of the Statement, it is appropriate to restate the Company's previously issued (1) audited balance sheet, datedOctober 23, 2020 , included in the Form 8-K that was filed onOctober 29, 2020 , and (2) the Company's audited financial statements as ofDecember 31, 2020 , and for the period fromAugust 12, 2020 (inception) throughDecember 31, 2020 , included in the Annual Report on Form 10-K that was filed onMarch 31, 2021 (the "Relevant Periods"). In light of such restatement, such audited financial statements should no longer be relied upon. Historically, the warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the warrants, based on our application ofFinancial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815-40, Derivatives and Hedging, Contracts in Entity's Own Equity ("ASC 815-40). The views expressed in the Statement were not consistent with the Company's historical interpretation of the specific provisions within its warrant agreement and the Company's application of ASC 815-40 to the warrant agreement. We reassessed our accounting for the warrants issued onOctober 23, 2020 , in light of theSEC Staff's published views. Based on this reassessment, we determined that the warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our Statement of Operations each reporting period. The change in accounting for the warrants did not have any impact on our liquidity, cash flows, revenues or costs of operating our business and the other non-cash adjustments to the Financial Statements, in all of the Relevant Periods or in any of the periods included in Item 8, Financial Statements and Supplementary Data in this filing. The change in accounting for the warrants does not impact the amounts previously reported for the Company's cash and cash equivalents, investments held in the trust account, operating expenses or total cash flows from operations for any of these periods. - 33 - -------------------------------------------------------------------------------- Table of Contents Restatement - Shares Subject to Possible Redemption TreatmentThe Company has re-evaluated its application of ASC 480-10-S99-3A to its accounting classification of the redeemable Class A ordinary shares, par value$0.0001 per share (the "Public Shares"), issued as part of the units sold in the Company's initial public offering (the "IPO") onOctober 23, 2020 . Since issuance inOctober 2020 , the Company has considered the Public Shares subject to possible redemption to be equal to the redemption value of$10.00 per Class A ordinary share while also taking into consideration that a redemption cannot result in net tangible assets being less than$5,000,001 . Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. After discussion and evaluation, including with the Company's audit committee, management has determined that the Class A ordinary shares issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company's control. Therefore, management concluded that the redemption value should include all Class A ordinary shares subject to possible redemption, resulting in the Class A ordinary shares subject to possible redemption being equal to their redemption value. As a result, management noted an adjustment between temporary equity and permanent equity should be made. As a result of the factors described above, the Company's management and the audit committee of the Company's board of directors (the "Audit Committee") concluded that the Company's previous audited financial statements for the period endedDecember 31, 2020 on Form 10-K filedMarch 31, 2021 as well as its quarterly unaudited financial statements for the quarterly periods endedMarch 31, 2021 andJune 30, 2021 included in its Quarterly Reports on Form 10-Q filed onAugust 12, 2021 andAugust 23, 2021 , respectively, as well as the Company's balance sheet included on the Company's Form 8-K datedOctober 23, 2020 should no longer be relied upon because the reclassification should have instead been characterized as a restatement under relevant accounting guidance. As a result, the Company has restated its financial statements for the affected periods in this Amendment No. 2 to its Annual Report of Form 10-K and on Amendment No. 1 to its Quarterly Report on Form 10-Q. The change in accounting for the Class A ordinary shares did not have any impact on our liquidity, net cash flows, revenues or costs of operating our business in the affected periods. Results of Operations and Known Trends or Future Events We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our initial public offering and identifying a target company for our initial business combination. We do not expect to generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on cash and cash equivalents held 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 expenses as we conduct due diligence on prospective business combination candidates. For the period fromAugust 12, 2020 (Inception) throughDecember 31, 2020 , we had a net loss of$17,826,208 . We incurred$87,399 of formation and operating costs (not charged against shareholders' equity), consisting mostly of general and administrative expenses. The Company also recorded a change in fair value of warrant liabilities of$17,268,428 and offering costs allocated to issuance of warrants of$472,585 . We had interest income of$2,204 of interest on the trust account. Liquidity and Capital Resources As ofDecember 31, 2020 , we had cash outside the trust account of$1,097,856 available for working capital needs. All remaining cash held in the trust account are generally unavailable for the Company's use, prior to an initial business combination, and is restricted for use either in a business combination or to redeem ordinary shares. As ofDecember 31, 2020 , none of the amount in the trust account was available to be withdrawn as described above. - 34 - -------------------------------------------------------------------------------- Table of Contents ThroughDecember 31, 2020 , the Company's liquidity needs were satisfied through receipt of$25,000 from the sale of the founder shares, advances from the sponsor in an aggregate amount of$61,810 and the remaining net proceeds from the initial public offering and the sale of private placement units. The Company anticipates that the$1,097,856 outside of the trust account as ofDecember 31, 2020 , will be sufficient to allow the Company to operate for at least the next 12 months, assuming that a business combination is not consummated during that time. Until consummation of our business combination, the Company will be using the funds not held in the trust account, and any additional Working Capital Loans (as defined in Note 5 to our financial statements) from the initial shareholders, the Company's officers and directors, or their respective affiliates (which is described in Note 5 to our financial statements), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination. The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company's estimates of the costs of undertaking in-depth due diligence and negotiating business combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination. Moreover, the Company will need to raise additional capital through loans from its sponsor, officers, directors, or third parties. None of the sponsor, officers or directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it 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 its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
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