Quarterly report pursuant to Section 13 or 15(d)

Restatement of Previously Issued Financial Statements

v3.21.4
Restatement of Previously Issued Financial Statements
9 Months Ended
Sep. 30, 2021
Condensed Financial Information Disclosure [Abstract]  
Restatement of Previously Issued Financial Statements

Note 2—Restatement of Previously Issued Financial Statements

 

In connection with the preparation of the unaudited condensed financial statements as of September 30, 2021, management determined that it should restate its previously reported financial statements. The Company determined that, at the closing of the Initial Public Offering including the exercise of the underwriters’ over-allotment option, it had improperly valued its Class A common stock subject to possible redemption. The Company previously determined the Class A common stock subject to possible redemption to be equal to the redemption value of $10.00 per Class A common stock while also taking into consideration that a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A common stock issued during the Initial Public Offering including the exercise of the underwriters’ over-allotment option 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 common stock subject to possible redemption, resulting in the Class A common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A common stock.

 

In connection with the change in presentation for the Class A common stock subject to redemption, the Company also restated its earnings per share calculation to allocate net income (loss) pro rata to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company.

 

Subsequent to the Company’s filing of Amendment No. 1 to the Annual Report on Form 10-K/A on May 24, 2021 and the Company’s filing of Form 10-Q on November 12, 2021, in connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company is unable to complete a Business Combination by December 8, 2022, then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after December 8, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date.

 

There has been no change in the Company’s total assets, liabilities or operating results.

 

The impact of the restatement on the Company’s financial statements is reflected in the following tables:

 

 BALANCE SHEETS

 

   

March 31,

2021

   

June 30,

2021

 
    Unaudited     Unaudited  
Class A common stock subject to possible redemption            
As Previously Reported   $ 208,227,040     $ 205,504,830  
Adjustment   $ 21,772,960     $ 24,495,170  
As Restated   $ 230,000,000     $ 230,000,000  
Class A common stock                
As Previously Reported   $ 218     $ 245  
Adjustment   $ (218 )   $ (245 )
As Restated   $
-
    $
-
 
Additional paid-in capital                
As Previously Reported   $ 286,047     $ 3,008,230  
Adjustment   $ (286,047 )   $ (3,008,230 )
As Restated   $
-
    $
-
 
Retained Earnings (Accumulated deficit)                
As Previously Reported   $ 4,713,169     $ 1,990,953  
Adjustment   $ (21,486,695 )   $ (21,486,695 )
As Restated   $ (16,773,526 )   $ (19,495,742 )
Total stockholders’ equity (deficit)                
As Previously Reported   $ 5,000,009     $ 5,000,003  
Adjustment   $ (21,772,960 )   $ (24,495,170 )
As Restated   $ (16,772,951 )   $ (19,495,167 )

 

In addition, we restated the Class A common stock shares subject to possible redemption from 20,822,704 shares and 20,550,478 shares to 23,000,000 shares and 23,000,000 shares at March 31, 2021 and June 30, 2021, respectively.

 

STATEMENTS OF OPERATIONS

 

    Three Months Ended     Three Months Ended     Six Months Ended  
    March 31,
2021
    June 30,
2021
    June 30,
2021
 
    Unaudited     Unaudited     Unaudited  
Basic and diluted net income (loss) per share, Class A common stock subject to possible redemption                  
As Previously Reported   $ 0.00     $ 0.00     $ 0.00  
Adjustment   $ 0.31     $ (0.09 )   $ 0.21  
As Reported   $ 0.31     $ (0.09 )   $ 0.21  
Basic and diluted net income (loss) per share, Class B non-redeemable common stock                        
As Previously Reported   $ 1.55     $ (0.47 )   $ 1.07  
Adjustment   $ (1.24 )   $ 0.38     $ (0.86 )
As Reported   $ 0.31     $ (0.09 )   $ 0.21  

 

STATEMENTS OF CASH FLOWS

 

    Three Months Ended       Six Months Ended  
    March 31,
2021  
    June 30,
2021
 
     Unaudited       Unaudited  
Change in value of common stock subject to possible redemption            
As Previously Reported   $ 8,891,860     $ 6,169,650  
Adjustment   $ (8,891,860 )   $ (6,169,650 )
As Reported   $
-
    $
-