References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to FTAC Olympus Acquisition Corp. References to our "management"
or our "management team" refer to our officers and directors, references to
collectively the "Sponsor" refer to FTAC Olympus Sponsor, LLC and FTAC Olympus
Advisors, 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" 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
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/A 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 incorporated on June 2, 2020 as a Cayman Islands
exempted company for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with
one or more businesses or entities. We intend to effectuate our initial business
combination using cash from the proceeds of the Initial Public Offering and the
sale of the placement units, our shares, debt or a combination of cash, equity
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.
Recent Developments
On February 3, 2021, we entered into an Agreement and Plan of Reorganization
(the "Reorganization Agreement") by and among us, New Starship Parent Inc., a
Delaware corporation ("New Starship"), Starship Merger Sub I Inc., a Delaware
corporation and a direct, wholly-owned subsidiary of New Starship ("First Merger
Sub"), Starship Merger Sub II Inc., a Delaware corporation and a direct,
wholly-owned subsidiary of New Starship ("Second Merger Sub" and, together with
First Merger Sub, the "Merger Subs") and Payoneer Inc., a Delaware corporation
("Payoneer", and together with us, New Starship and the Merger Subs, the
"Parties").
Pursuant to the Reorganization Agreement, the Parties have agreed that, on the
terms and subject to the conditions set forth therein, at the Closing (as
defined in the Reorganization Agreement), (i) First Merger Sub will merge with
and into the Company (the "FTOC Merger"), with the Company surviving as a direct
wholly owned subsidiary of New Starship and (ii) immediately thereafter, Second
Merger Sub will merge with and into Payoneer (the "Payoneer Merger" and,
together with the FTOC Merger, the "Mergers") with Payoneer surviving as a
direct wholly owned subsidiary of New Starship (the transactions contemplated by
the Reorganization Agreement, the "Reorganization").
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from inception to March 31, 2021 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 a Business Combination and the potential acquisition, as more fully
described above. We do not expect to generate any operating revenues until after
the completion of our Business Combination. We generate non-operating income in
the form of interest income on marketable securities 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 for due diligence
expenses in connection with completing a Business Combination.
For the three months ended March 31, 2021, we had a net loss of $9,048,908,
which consisted of operating expenses of $3,114,786 and a change in fair value
of the warrant liability of $5,952,734, offset by interest earned on investments
held in the Trust Account of $18,612.
Liquidity and Capital Resources
Until the consummation of the Initial Public Offering, the Company's only source
of liquidity was an initial purchase of Class B ordinary shares by our Sponsor
and loans from our Sponsor.
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On August 28, 2020, we consummated the Initial Public Offering of 75,000,000
Units, at a price of $10.00 per Unit, generating gross proceeds of $750,000,000.
Simultaneously with the closing of the Initial Public Offering, we consummated
the sale of an aggregate of 2,170,000 Placement Units to our Sponsor at a price
of $10.00 per unit, generating gross proceeds of $21,170,000.
On September 23, 2020, the underwriters exercised their over-allotment option in
part, resulting in an additional 474,376 Units issued for total gross proceeds
of $4,743,760. A total of $4,743,760 was deposited into the Trust Account,
bringing the aggregate proceeds held in the Trust Account to $754,743,760.
Following the Initial Public Offering, the exercise of the over-allotment option
and the sale of the Placement Units, a total of $754,743,760 was placed in the
Trust Account. We incurred $45,956,853 in transaction costs, including
$15,000,000 of underwriting fees, $30,284,626 of deferred underwriting fees and
$672,227 of other offering costs in connection with the Initial Public Offering
and the sale of the Placement Units.
For the three months ended March 31, 2021, net cash used in operating activities
was $1,099,214. Net loss of $9,048,908 was impacted by interest earned on
investments of $18,612 and a change in fair value of the warrant liability of
$5,952,734. Changes in operating assets and liabilities used $2,015,572 of cash
from operating activities.
At March 31, 2021 and December 31, 2020, we had investments held in the Trust
Account of $754,787,779 and $754,769,167, respectively. 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 (if
applicable) and deferred underwriting commissions) to complete our Business
Combination. To the extent that our shares 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 post-Business Combination entity, make other acquisitions and
pursue our growth strategies.
At March 31, 2021 and December 31, 2020, we had cash of $4,003,154 and
$5,102,368 respectively, 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, properties 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, our Sponsor or an affiliate of our
Sponsor or certain of our officers and directors may, but are not obligated to,
loan us funds as may be required. If we complete a Business Combination, we
would repay such loaned amounts. In the event that a Business Combination does
not close, we may use a portion of the working capital held outside the Trust
Account to repay such loaned amounts but no proceeds from our Trust Account
would be used for such repayment. Up to $1,500,000 of such loans may be
convertible into units identical to the Placement Units, at a price of $10.00
per unit at the option of the lender.
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 and consummating 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. Subject
to compliance with applicable securities laws, we would only complete such
financing simultaneously with the completion of our Business Combination. If we
are unable to complete our Business Combination because we do not have
sufficient funds available to us, we will be forced to cease operations and
liquidate the Trust Account. In addition, following our Business Combination, if
cash on hand is insufficient, we may need to obtain additional financing in
order to meet our obligations.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of March 31, 2021. 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 of the sponsor a monthly fee of $25,000 for office space,
administrative and shared personnel support services. We began incurring these
fees on August 26, 2020 and will continue to incur these fees monthly until the
earlier of the completion of the business combination or the Company's
liquidation.
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Pursuant to a registration rights agreement entered into on August 25, 2020, the
holders of the Founder Shares, Placement Units (including securities contained
therein) and warrants that may be issued upon conversion of Working Capital
Loans (and any Class A ordinary shares issuable upon the exercise of the
Placement Warrants and warrants that may be issued upon conversion of Working
Capital Loans) are entitled to registration rights to require us to register a
sale of any securities held by them (in the case of the Founder Shares, only
after conversion to Class A ordinary shares). The holders of these securities
will be entitled to make up to three demands, excluding short form demands, that
we register such securities for sale under the Securities Act. In addition,
these holders will have "piggy-back" registration rights to include such
securities in other registration statements filed by us and rights to require us
to register for resale such securities pursuant to Rule 415 under the Securities
Act. However, the registration rights agreement provides that we will not permit
any registration statement filed under the Securities Act to become effective
until termination of the applicable lock-up period. We will bear the expenses
incurred in connection with the filing of any such registration statements.
Citigroup Global Markets Inc. and Cantor Fitzgerald & Co., as representatives of
the several underwriters, are entitled to a deferred fee of $30,284,626. The
deferred fee will become payable to the representatives 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 condensed 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
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 480,
Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and
Hedging ("ASC 815"). The assessment considers whether the warrants are
freestanding financial instruments pursuant to ASC 480, meet the definition of a
liability pursuant to ASC 480, and whether the warrants meet all of the
requirements for equity classification under ASC 815, including whether the
warrants are indexed to the Company's own ordinary shares and whether the
warrant holders could potentially require "net cash settlement" in a
circumstance outside of the Company's control, among other conditions for equity
classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
additional paid-in capital at the time of issuance. For issued or modified
warrants that do not meet all the criteria for equity classification, the
warrants are required to be recorded as a derivative liability at their initial
fair value on the date of issuance, and each balance sheet date thereafter.
Changes in the estimated fair value of the warrants are recognized as a non-cash
gain or loss on the statements of operations. The fair value of the Public
Warrants was initially measured using a binomial / lattice model with subsequent
periods measured at the trading price, whereas the Private Placement Warrants
were initially and subsequently measured using the Black-Scholes Option Pricing
Model. (see Note 8). In accordance with ASC 825-10 "Financial Instruments",
offering costs attributable to the issuance of the derivative warrant
liabilities are recognized in the statement of operations as incurred.
One of the more significant accounting estimates included in these unaudited
condensed financial statements is the determination of the fair value of the
warrant liability. Such estimates may be subject to change as more current
information becomes available and accordingly the actual results could differ
significantly from those estimates.
Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance
with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity."
Ordinary shares subject to mandatory redemption is classified as a liability
instrument and is measured at fair value. Conditionally redeemable ordinary
shares (including ordinary shares that feature 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, ordinary shares are classified as shareholders'
equity. Our ordinary shares feature certain redemption rights that are
considered to be outside of our control and subject to occurrence of uncertain
future events. Accordingly, ordinary shares subject to possible redemption is
presented as temporary equity, outside of the shareholders' equity section of
our condensed balance sheet.
Net Income (Loss) Per Ordinary Share
We apply the two-class method in calculating earnings per share. Net income per
ordinary share, basic and diluted for Class A redeemable ordinary shares is
calculated by dividing the interest income earned on the Trust Account by the
weighted average number of Class A redeemable ordinary shares outstanding since
original issuance. Net loss per common share, basic and diluted for Class A and
Class B non-redeemable ordinary shares is calculated by dividing the net income
(loss), less income attributable to Class A redeemable ordinary shares, by the
weighted average number of Class A and Class B non-redeemable ordinary shares
outstanding for the periods presented.
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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. The ASU also removes certain settlement conditions
that are required for equity-linked contracts to qualify for the derivative
scope exception, and it simplifies the diluted earnings per share calculation in
certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of
the ASU did not impact the Company's financial position, results of operations
or cash flows.
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on the
Company's unaudited condensed financial statements.
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