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Restatement of Financial Statements
 12 Months Ended
Dec. 31, 2020
Accounting Changes and Error Corrections [Abstract]  
Restatement of Financial Statements

NOTE 2 — RESTATEMENT OF FINANCIAL STATEMENTS

 

Restatement Background and Explanation

 

The Company has restated its financial statements as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and for the period from May 28, 2019 (inception) through December 31, 2019, and the interim periods ended September 30, 2020 and 2019, March 31, 2020, and June 30, 2020, as well as the financial statements as of September 13, 2019 (collectively “Affected Periods”), to correct misstatements in those prior periods related to misstatements identified in improperly applying accounting guidance on certain warrants, recognizing them as equity instead of warrant liabilities, under the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-40, Contracts in Entity’s Own Equity.

 

The Company issued Public and Private Warrants in September 2019, collectively, aggregating to 11,500,000 and 6,100,000 warrants, respectively, issued between two closings. Each whole Public and Private Warrant is exercisable to purchase one share of Class A Common Stock at a price of $11.50 per share.

 

Upon issuance of the warrants, the Company conducted an evaluation pursuant to ASC 815 to determine the appropriate classification within the financial statements. The Company concluded that the warrants should be recorded at their issuance price within stockholders’ equity in the balance sheet. The determination to classify the warrants within stockholders’ equity was primarily based on the understanding that the settlement provisions of the warrants did not allow for net cash settlement in an event that was outside of the Company’s control in which all holders of the underlying shares, into which the warrants are exercisable, also would receive cash.

 

Upon the release of the SEC Statement on April 12, 2021, the Company re-assessed its classification of its warrants under ASC 815 pursuant to the accounting policy described in Note 3. Pursuant to the terms of the warrants, upon a cash tender offer in which 50% or more of the outstanding shares of common stock participate, the holders of the warrants shall be entitled to redeem the warrants and receive the highest amount of cash, securities, or other property to which such holder would have been entitled as a stockholder if the holder of the warrants had exercised the warrants prior to the expiration of such tender offer and accepted such tender offer. Upon the occurrence of such event, which is outside of the control of the Company, the warrants would be net cash settled and not all holders of the common stock may receive cash (assuming not all outstanding shares accepted the tender offer). The Company recognized that ASC 815 precludes the classification of a freestanding financial instrument within stockholder’s equity when an event that is outside the entity’s control could require net cash settlement in which not all of the holders of the underlying shares also receive cash.

 

Therefore, based on the results of the Company’s assessment, the Company has concluded that the warrants issued in September 2019 are freestanding instruments which should be accounted for as warrant liabilities rather than as a component of additional paid-in capital on the balance sheet, with any subsequent changes in the estimated fair value of the warrants reported in the statement of operations.

 

Impact of the Restatement

 

The impact of the restatement on the balance sheets, statements of operations, and statements of cash flows for the Affected Periods is presented below.

 

Impact of the Restatement – 2020

 

Balance Sheets

 

    December 31, 2020  
    As Reported     Adjustments     As Revised  
Warrant liabilities   $ -     $ 68,114,000     $ 68,114,000  
Total liabilities     8,693,966       68,114,000       76,807,966  
Class A common stock subject to possible redemption     218,710,925       (68,113,997 )     150,596,928  
Class A common stock     133       808       941  
Addition paid-in capital     4,152,440       55,688,213       59,840,653  
Retained earnings (accumulated deficit)     846,856       (55,689,024 )     (54,842,168 )
Total stockholders’ equity (deficit)     5,000,004       (3 )     5,000,001  

 

Statements of Operations

 

    For the Year Ended December 31, 2020  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities   $ -     $ (52,152,000 )   $ (52,152,000 )
Other income (expense), net     1,481,816       (52,152,000 )     (50,670,184 )
Net income (loss)     191,177       (52,152,000 )     (51,960,823 )
Weighted average shares outstanding, basic and diluted     7,008,667       1,589,875       8,598,542  
Basic and diluted net loss per common share   $ (0.12 )   $ (6.01 )   $ (6.13 )

 

Statements of Cash Flows

 

    For the Year Ended December 31, 2020  
    As Reported     Adjustments     As Revised  
Net income (loss)   $ 191,177     $ (52,152,000 )   $ (51,960,823 )
Change in fair value of warrant liabilities     -       52,152,000       52,152,000  
Non-cash investing and financing activities:                        
Change in value of shares subject to redemption     191,177       (52,152,000 )     (51,960,823 )

 

 

Balance Sheets

 

    September 30, 2020  
    As Reported     Adjustments     As Revised  
Warrant liabilities   $ -     $ 21,357,000     $ 21,357,000  
Total liabilities     8,310,507       21,357,000       29,667,507  
Class A common stock subject to possible redemption     219,259,970       (21,356,993 )     197,902,977  
Class A common stock     127       338       465  
Additional paid-in capital     3,603,401       8,931,679       12,535,080  
Retained earnings (accumulated deficit)     1,395,905       (8,932,024 )     (7,536,119 )
Total stockholders’ equity (deficit)     5,000,008       (7 )     5,000,001  

 

Statements of Operations

 

    Three Months Ended September 30, 2020  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities   $ -     $ (3,696,000 )   $ (3,696,000 )
Other income (expense), net     83,140       (3,696,000 )     (3,612,860 )
Net income (loss)     (55,049 )     (3,696,000 )     (3,751,049 )
Weighted average shares outstanding, basic and diluted     7,007,989       1,750,840       8,758,829  
Basic and diluted net loss per common share   $ (0.01 )   $ (0.42 )   $ (0.43 )

 

Statements of Operations

 

    Nine Months Ended September 30, 2020  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities   $ -     $ (5,395,000 )   $ (5,395,000 )
Other income (expense), net     1,429,005       (5,395,000 )     (3,965,995 )
Net income (loss)     740,226       (5,395,000 )     (4,654,774 )
Weighted average shares outstanding, basic and diluted     5,307,098       3,111,439       8,418,537  
Basic and diluted net loss per common share   $ (0.02 )   $ (0.64 )   $ (0.66 )

 

Statements of Cash Flows

 

    Nine Months Ended September 30, 2020  
    As Reported     Adjustments     As Revised  
Net income (loss)   $ 740,226     $ (5,395,000 )   $ (4,654,774 )
Change in fair value of warrant liabilities     -       5,395,000       5,395,000  
Non-cash investing and financing activities:                        
Change in value of shares subject to redemption     740,222       (4,491,271 )     (3,751,049 )

 

Balance Sheets

 

    June 30, 2020  
    As Reported     Adjustments     As Revised  
Warrant liabilities   $ -     $ 17,661,000     $ 17,661,000  
Total liabilities     8,256,307       17,661,000       25,917,307  
Class A common stock subject to possible redemption     219,315,022       (17,660,996 )     201,654,026  
Class A common stock     126       301       427  
Additional paid-in capital     3,548,350       5,235,719       8,784,069  
Retained earnings (accumulated deficit)     1,450,954       (5,236,024 )     (3,785,070 )
Total stockholders’ equity (deficit)     5,000,005       (4 )     5,000,001  

 

 

Statements of Operations

 

    Three Months Ended June 30, 2020  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities   $ -     $ (8,624,000 )   $ (8,624,000 )
Other income (expense), net     88,138       (8,624,000 )     (8,535,862 )
Net income (loss)     (51,977 )     (8,624,000 )     (8,675,977 )
Weighted average shares outstanding, basic and diluted     7,005,122       895,798       7,900,920  
Basic and diluted net loss per common share   $ (0.01 )   $ (1.09 )   $ (1.10 )

 

Statements of Operations

 

    Six Months Ended June 30, 2020  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities   $ -     $ (1,699,000 )   $ (1,699,000 )
Other income (expense), net     1,345,865       (1,699,000 )     (353,135 )
Net income (loss)     795,275       (1,699,000 )     (903,725 )
Weighted average shares outstanding, basic and diluted     7,004,380       1,242,141       8,246,521  
Basic and diluted net loss per common share   $ (0.03 )   $ (0.19 )   $ (0.22 )

 

Statements of Cash Flows

 

    Six Months Ended June 30, 2020  
    As Reported     Adjustments     As Revised  
Net income (loss)   $ 795,275     $ (1,699,000 )   $ (903,725 )
Change in fair value of warrant liabilities     -       1,699,000       1,699,000  
Non-cash investing and financing activities:                        
Change in value of shares subject to redemption     795,274       (9,471,251 )     (8,675,977 )

 

Balance Sheets

 

    March 31, 2020  
    As Reported     Adjustments     As Revised  
Warrant liabilities   $ -     $ 9,037,000     $ 9,037,000  
Total liabilities     8,548,277       9,037,000       17,585,277  
Class A common stock subject to possible redemption     219,367,001       (9,036,998 )     210,330,003  
Class A common stock     126       215       341  
Additional paid-in capital     3,496,371       (3,388,193 )     108,178  
Retained earnings     1,502,931       3,387,976       4,890,907  
Total stockholders’ equity (deficit)     5,000,003       (2 )     5,000,001  

 

Statements of Operations

 

    Three Months Ended March 31, 2020  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities   $ -     $ 6,925,000     $ 6,925,000  
Other income, net     1,257,727       6,925,000       8,182,727  
Net income     847,252       6,925,000       7,772,252  
Weighted average shares outstanding, basic and diluted     7,003,637       1,588,485       8,592,122  
Basic and diluted net income (loss) per common share   $ (0.01 )   $ 0.81     $ 0.80  

 

 

Statements of Cash Flows

 

    Three Months Ended March 31, 2020  
    As Reported     Adjustments     As Revised  
Net income   $ 847,252     $ 6,925,000     $ 7,772,252  
Change in fair value of warrant liabilities     -       (6,925,000 )     (6,925,000 )
Non-cash investing and financing activities:                        
Change in value of shares subject to redemption     847,253       6,924,999       7,772,252  

  

Impact of the Restatement – 2019

 

Balance Sheets

 

    December 31, 2019  
    As Reported     Adjustments     As Revised  
Warrant liabilities   $ -     $ 15,962,000     $ 15,962,000  
Total liabilities     8,319,433       15,962,000       24,281,433  
Class A common stock subject to possible redemption     218,519,748       (15,961,997 )     202,557,751  
Class A common stock     125       284       409  
Addition paid-in capital     4,343,625       3,536,737       7,880,362  
Retained earnings (accumulated deficit)     655,679       (3,537,024 )     (2,881,345 )
Total stockholders’ equity (deficit)     5,000,004       (3 )     5,000,001  

 

Statements of Operations

 

   

For the Period From May 28, 2019 (inception)

through December 31, 2019

  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities     -       (3,053,000 )     (3,053,000 )
Issuance costs allocated to warrant liabilities     -       (484,024 )     (484,024 )
Other income (expense), net     1,214,831       (3,537,024 )     (2,322,193 )
Net income (loss)     655,679       (3,537,024 )     (2,881,345 )
Weighted average shares outstanding, basic and diluted     6,075,732       35,752       6,111,484  
Basic and diluted net loss per common share   $ (0.04 )   $ (0.57 )   $ (0.61 )

 

Statements of Cash Flows

 

   

For the Period From May 28, 2019 (inception)

through December 31, 2019

  
    As Reported     Adjustments     As Revised  
Operating Activities:                        
Net income (loss)   $ 655,679     $ (3,537,024 )   $ (2,881,345 )
Change in fair value of warrant liabilities     -       3,053,000       3,053,000  
Net cash used in operating activities     (420,945 )     (484,024 )     (904,969 )
Financing Activities:                        
Proceeds from sale of Units, net of underwriting discounts paid     225,400,000       484,024       225,884,024  
Net cash provided by financing activities     230,914,073       484,024       231,398,097  
Non-cash investing and financing activities:                        
Initial classification of ordinary shares subject to redemption     217,862,910       (12,909,000 )     204,953,910  
Change in value of shares subject to redemption     656,838       (3,052,997 )     (2,396,159 )

 

Balance Sheets

 

    September 30, 2019  
    As Reported     Adjustments     As Revised  
Warrant liabilities   $ -     $ 13,085,000     $ 13,085,000  
Total liabilities     8,125,774       13,085,000       21,210,774  
Class A common stock subject to possible redemption     217,950,740       (13,085,000 )     204,865,740  
Class A common stock     122       253       375  
Additional paid-in capital     4,912,636       659,771       5,572,407  
Retained earnings (accumulated deficit)     86,668       (660,024 )     (573,356 )

  

Statements of Operations

 

    Three Months Ended September 30, 2019  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities     -       (176,000 )     (176,000 )
Issuance costs allocated to warrant liabilities     -       (484,024 )     (484,024 )
Other income (expense), net     205,420       (660,024 )     (454,604 )
Net income (loss)     87,761       (660,024 )     (572,263 )
Weighted average shares outstanding, basic and diluted     5,307,098       228,499       5,535,597  
Basic and diluted net income (loss) per common share   $ (0.02 )   $ (0.11 )   $ (0.13 )

 

Statements of Operations

 

   

For the Period From May 28, 2019 (inception)

through September 30, 2019

  
    As Reported     Adjustments     As Revised  
Changes in fair value of warrant liabilities     -       (176,000 )     (176,000 )
Issuance costs allocated to warrant liabilities     -       (484,024 )     (484,024 )
Other income (expense), net     205,420       (660,024 )     (454,604 )
Net income (loss)     86,668       (660,024 )     (573,356 )
Weighted average shares outstanding, basic and diluted     5,274,301       (760,101 )     4,514,200  
Basic and diluted net income (loss) per common share   $ (0.02 )   $ (0.14 )   $ (0.16 )

 

Statements of Cash Flows

 

   

For the Period From May 28, 2019 (inception)

through September 30, 2019

  
    As Reported     Adjustments     As Revised  
Operating Activities:                        
Net income (loss)   $ 86,668     $ (660,024 )   $ (573,356 )
Change in fair value of warrant liabilities     -       176,000       176,000  
Net cash used in operating activities     (208,689 )     (484,024 )     (692,713 )
Financing Activities:                        
Proceeds from sale of Units, net of underwriting discounts paid     225,400,000       484,024       225,884,024  
Net cash provided by financing activities     230,914,073       484,024       231,398,097  
Non-cash investing and financing activities:                        
Initial classification of ordinary shares subject to redemption     217,862,910       (12,908,991 )     204,953,919  
Change in value of shares subject to redemption     87,830       (176,009 )     (88,179 )

 

Balance Sheets

 

    September 13, 2019  
    As Reported     Adjustments     As Revised  
Warrant liabilities   $ -     $ 11,370,000     $ 11,370,000  
Total liabilities     8,084,093       11,370,000       19,454,093  
Class A common stock subject to possible redemption     188,912,910       (11,369,991 )     177,542,919  
Class A common stock     111       114       225  
Additional paid-in capital     5,000,477       423,676       5,424,153  
Retained earnings (accumulated deficit)     (1,153 )     (423,799 )     (424,952 )
Total stockholders’ equity (deficit)     5,000,010       (9 )     5,000,001