References to the "Company," "Omnichannel Acquisition Corp.," "Omnichannel,"
"our," "us" or "we" refer to Omnichannel Acquisition Corp. The following
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the unaudited interim condensed
consolidated financial statements and the notes thereto contained elsewhere in
this report. Certain information contained in the discussion and analysis set
forth below includes forward-looking statements that involve risks and
uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act. We have based these forward-looking statements
on our current expectations and projections about future events. These
forward-looking statements are subject to known and unknown risks, uncertainties
and assumptions about us that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
SEC filings.
Overview
We are a blank check company incorporated in Delaware on September 9, 2020. We
were formed for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with
one or more businesses (the "Business Combination"). We are an emerging growth
company and, as such, the Company is subject to all of the risks associated with
emerging growth companies.
Our sponsor is Omnichannel Sponsor LLC, a Delaware limited liability company
(the "Sponsor"). The registration statement for our Initial Public Offering was
declared effective November 19, 2020. On November 24, 2020, we consummated our
Initial Public Offering of 20,000,000 units (the "Units") at $10.00 per Unit,
generating gross proceeds of $200.0 million, and incurring offering costs of
approximately $11.6 million, inclusive of approximately $7.0 million in deferred
underwriting commissions (Note 5). We granted the underwriters in the Initial
Public Offering (the "Underwriters") a 45-day option to purchase up to 3,000,000
additional units to cover over-allotments, if any. The Underwriters partially
exercised the over-allotment option and on November 30, 2020, the underwriters
purchased an additional 650,000 Units (the "Over-Allotment Units"), generating
gross proceeds of $6.5 million, and incurred additional offering costs of
$357,500 in underwriting fees (inclusive of $227,500 in deferred underwriting
fees) (the "Over-Allotment").
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 6,000,000 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants")
at a price of $1.00 per Private Placement Warrant to the Sponsor, generating
proceeds of $6.0 million (Note 4). Simultaneously with the closing of the
Over-Allotment on November 30, 2020, the Company consummated the second closing
of the Private Placement, resulting in the purchase of an aggregate of an
additional 130,000 Private Placement Warrants by the Sponsor, generating gross
proceeds to us of $130,000.
Upon the closing of the Initial Public Offering, the Over-Allotment and the
Private Placement, $206.5 million ($10.00 per Unit) of the net proceeds of the
sale of the Units in the Initial Public Offering, the Over-Allotment and of the
Private Placement Warrants in the Private Placement were placed in a trust
account ("Trust Account"), located in the United States with Continental Stock
Transfer & Trust Company acting as trustee, and invested only in U.S. government
treasury bills with a maturity of 185 days or less or in money market funds
investing solely in U.S. Treasuries and meeting certain conditions under Rule
2a-7 under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), as determined by us, until the earlier of (i) the completion of a
Business Combination and (ii) the distribution of the Trust Account as described
below.
Our management has broad discretion with respect to the specific application of
the net proceeds of the Initial Public Offering and the sale of the Private
Placement Warrants, although substantially all of the net proceeds are intended
to be applied generally toward consummating a Business Combination. There is no
assurance that the Company will be able to complete a Business Combination
successfully. We must complete one or more initial Business Combinations having
an aggregate fair market value of at least 80% of the net assets held in the
Trust Account net of amounts disbursed to management for working capital
purposes, if permitted, and excluding the amount of any deferred underwriting
commissions) at the time of the agreement to enter into the initial Business
Combination. However, we will only complete a Business Combination if the
post-business combination company owns or acquires 50% or more of the voting
securities of the target or otherwise acquires a controlling interest in the
target sufficient for it not to be required to register as an investment company
under the Investment Company Act.
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If we are unable to complete a Business Combination within 18 months from the
closing of the Initial Public Offering, or May 24, 2022 (the "Combination
Period"), we will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the Public Shares, at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account, including
interest earned on the funds held in the Trust Account and not previously
released to us to pay its taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding Public Shares,
which redemption will completely extinguish Public Stockholders' rights as
stockholders (including the right to receive further liquidating distributions,
if any), and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and the board of
directors, liquidate and dissolve, subject, in each case, to our obligations
under Delaware law to provide for claims of creditors and the requirements of
other applicable law.
Proposed Business Combination
On July 19, 2021, we entered into a business combination agreement with
Omnichannel Merger Sub, Inc., a wholly-owned subsidiary of Omnichannel ("Merger
Sub"), and Kin Insurance, Inc., a Delaware corporation ("Kin") (as it may be
amended and/or restated from time to time, the "Business Combination
Agreement"). Upon the consummation of the transactions contemplated by the
Business Combination Agreement (the "Closing"), Merger Sub will merge with and
into Kin with Kin surviving the Merger as a wholly-owned subsidiary of
Omnichannel (the "Business Combination"). In addition, at the Closing,
Omnichannel will be renamed "Kin Holdings, Inc." References herein to "Pubco"
shall mean the Company as of the time following such change of name.
Pursuant to the Business Combination Agreement, (a) immediately prior to the
effectiveness of the Merger (the "Effective Time"), (i) each issued and
outstanding share of preferred stock of Kin will automatically convert into a
number of shares of common stock of Kin in accordance with Kin's certificate of
incorporation and (ii) each share of Class A common stock and Class B common
stock of the Company will be converted into one share of common stock of the
Company and (b) each share of common stock of Kin will be converted into 8.5881
shares of common stock of Pubco.
Effective as of the Effective Time, (i) each outstanding option to purchase
shares of Kin preferred stock or Kin common stock (each, a "Kin Option") that is
outstanding and unexercised immediately prior to the Effective Time, whether or
not then vested or exercisable, shall be assumed by Omnichannel and shall be
converted into an option to acquire shares of Pubco common stock with the same
terms and conditions as applied to the Kin Option immediately prior to the
Effective Time (a "Pubco Option"); provided that the number of shares underlying
such Pubco Options will be determined by multiplying the number of shares of Kin
common stock subject to such Kin Option immediately prior to the Effective Time
by 8.5881 (the "Exchange Ratio"), which product shall be rounded down to the
nearest whole number of shares, and the exercise price of each Pubco Option will
be determined by dividing the per share exercise price immediately prior to the
Effective Time by the Exchange Ratio, which quotient shall be rounded up to the
nearest whole cent.
Effective as of the Effective Time, each outstanding warrant to acquire shares
of Kin preferred stock or Kin common stock (each, a "Kin Warrant") that is
issued and outstanding immediately prior to the Effective Time and not
terminated pursuant to its terms, by virtue of the Business Combination and
without any action on the part of Omnichannel, Kin or the holder of any such Kin
Warrant, shall be assumed by Omnichannel and shall be converted into a warrant
to acquire shares of Pubco common stock with the same terms and conditions as
applied to the Kin Warrant immediately prior to the Effective Time (a "Pubco
Warrant"); provided that the number of shares underlying such Pubco Warrants
will be determined by multiplying the number of shares of Kin common stock or
Kin preferred stock subject to such Kin Warrant immediately prior to the
Effective Time by the Exchange Ratio, which product shall be rounded down to the
nearest whole number of shares, and the exercise price of each Pubco Warrant
will be determined by dividing the per share exercise price of such Kin Warrant
immediately prior to the Effective Time by the Exchange Ratio, which quotient
shall be rounded down to the nearest whole cent.
The consummation of the Business Combination is conditioned upon, among other
things, (a) Omnichannel having an aggregate cash amount of at least $200 million
available at Closing from the Company's trust account and PIPE Investors (the
"Minimum Cash Condition"), (b) the expiration or termination of the waiting
period (or any extension thereof) applicable under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the rules and regulations promulgated
thereunder (the "HSR Act"), and (c) the approval by the Florida Office of
Insurance Regulation of the Business Combination.
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The parties to the Business Combination Agreement have made customary
representations, warranties and covenants in the Business Combination Agreement,
including, among others, covenants with respect to the conduct of Omnichannel
and Kin and its subsidiaries prior to the closing of the Business Combination.
The Business Combination Agreement may be terminated by Kin or Omnichannel under
certain circumstances, including, among others, (i) by mutual written consent of
Kin and Omnichannel, (ii) by either Kin or Omnichannel if the closing of the
Business Combination has not occurred on or before April 19, 2022 and (iii) by
Kin or Omnichannel if either Omnichannel or Kin has not obtained the required
approval of its stockholders.
The Business Combination Agreement contains representations, warranties and
covenants that the parties to the Business Combination Agreement made to each
other as of the date of the Business Combination Agreement or other specific
dates. The assertions embodied in those representations, warranties and
covenants were made for purposes of the contract among the parties and are
subject to important qualifications and limitations agreed to by the parties in
connection with negotiating the Business Combination Agreement. In particular,
the representations, warranties, covenants and agreements contained in the
Business Combination Agreement, which were made only for purposes of the
Business Combination Agreement and as of specific dates, were solely for the
benefit of the parties to the Business Combination Agreement, may be subject to
limitations agreed upon by the contracting parties (including being qualified by
confidential disclosures made for the purposes of allocating contractual risk
between the parties to the Business Combination Agreement instead of
establishing these matters as facts) and may be subject to standards of
materiality applicable to the contracting parties that differ from those
applicable to investors and reports and documents filed with the U.S. Securities
and Exchange Commission (the "SEC"). Investors should not rely on the
representations, warranties, covenants and agreements, or any descriptions
thereof, as characterizations of the actual state of facts or condition of any
party to the Business Combination Agreement. In addition, the representations,
warranties, covenants and agreements and other terms of the Business Combination
Agreement may be subject to subsequent waiver or modification. Moreover,
information concerning the subject matter of the representations and warranties
and other terms may change after the date of the Business Combination Agreement,
which subsequent information may or may not be fully reflected in the Company's
public disclosures.
Subscription Agreements
We entered into subscription agreements (the "Subscription Agreements"), each
dated as of July 19, 2021, with certain institutional investors (the "PIPE
Investors"), pursuant to which, among other things, the Company agreed to issue
and sell, in private placements to close immediately prior to the closing of the
Business Combination, an aggregate of 8,042,500 shares of Omnichannel Class A
common stock at $10.00 per share for aggregate gross proceeds of $80.43 million.
At the Closing of the Business Combination, each of the holders of shares of
Omnichannel Class A common stock issued pursuant to the Subscription Agreements
will automatically receive, on a one-for-one basis, shares of Pubco common stock
in exchange for such shares.
Registration Rights Agreement
In connection with the execution of the Business Combination Agreement, Kin
equityholders have entered into an Amended and Restated Registration Rights
Agreement (the "Registration Rights Agreement") with Omnichannel and Omnichannel
Sponsor, LLC (the "Sponsor"). Pursuant to the Registration Rights Agreement,
within 30 days of Closing, Pubco will file a registration statement registering
for resale (i) the Omnichannel common stock held by the Sponsor as converted
into Pubco common stock post-Closing, (ii) the Private Placement Warrants, (iii)
any Pubco common stock or warrants held by a holder signatory to the
Registration Rights Agreement, (iv) any Pubco common stock acquired by any
holder signatory to the Registration Rights Agreement upon the exercise of a
warrant or similar right, (v) any shares or warrants otherwise acquired by a
holder signatory to the Registration Rights Agreement, and (vi) any other equity
security issued with respect to any of (i)-(v) pursuant to a reorganization,
stock split, stock dividend or like transaction. Pubco thereafter is required to
maintain a registration statement that is continuously effective and to cause
the registration statement to regain effectiveness in the event that it ceases
to be effective. At any time that the registration statement is effective, any
holder signatory to the Registration Rights Agreement may request to sell all or
a portion of its securities that are registrable in an underwritten offering
pursuant to the registration statement; provided that the proposed offering
demanded by the holders(s) must be reasonably expected to exceed $35 million in
gross proceeds; provided furtherthat Pubco shall not be required to effect more
than two underwritten offerings in any 12-month period.
In addition, the holders have certain "piggyback" registration rights with
respect to registrations initiated by Pubco or other stockholders of Pubco.
Pubco will bear the expenses incurred in connection with the filing of any
registration statements pursuant to the Registration Rights Agreement.
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Support Agreements
In connection with and following the execution of the Business Combination
Agreement, certain Kin stockholders (the "Kin Supporting Stockholders") entered
into transaction support agreements with the Company (the "Support Agreements").
Under the Support Agreements, each Kin Supporting Stockholder agreed, on (or
effective as of) the third business day following the SEC declaring effective
the registration statement relating to the approval by Omnichannel stockholders
of the Business Combination, to execute and deliver a written consent to adopt
the Business Combination Agreement and related documents, to waive stockholder
notice rights in connection with the Business Combination, and, if a holder of
preferred stock, to consent to the preferred stock conversion. In addition, the
Kin Supporting Stockholders agree, in the event of an annual or special meeting
of stockholders, to (i) appear or cause their shares to be counted present for
quorum purposes, (ii) vote in favor of the Business Combination and any other
matters reasonably requested by Kin to consummate the Business Combination,
(iii) vote against any proposal that would materially impede the Business
Combination and (iv) vote in favor of or consent to the Business Combination in
any other circumstance so required for completion of the Transaction. In
addition, the Support Agreements prohibit the Kin Supporting Stockholders from
engaging in activities that have the effect of soliciting a competing
acquisition proposal.
Sponsor Agreement
In connection with the execution of the Business Combination Agreement, the
Sponsor and certain insiders of Omnichannel entered into an Agreement (the
"Sponsor Letter Agreement") with Omnichannel and Merger Sub, pursuant to which
the Sponsor and such insiders agreed to vote all shares of Omnichannel common
stock beneficially owned by them in favor of the Business Combination and each
other proposal related to the Business Combination included on the agenda for
the special meeting of stockholders relating to the Business Combination, to
appear at such meeting or otherwise cause their shares to be counted as present
for purposes of establishing a quorum at such meeting, to vote against any
proposal that would impede the Business Combination and the other transactions
contemplated thereby and to vote against any change in business, management or
board of directors of Omnichannel other than in connection with the transaction,
and not to redeem any of their shares.
Also, in connection with the Business Combination, the Sponsor agreed to forfeit
774,375 Founder Shares and 1,226,000 Private Placement Warrants.
The Sponsor Letter Agreement also contains a provision for a lock-up of the
Founder Shares (or any shares of Omnichannel Class A common stock issuable upon
conversion thereof) following the Business Combination. The relevant provision
provides that the Sponsor and the insiders party to the agreement will not
transfer, except in limited circumstances, any Founder Shares (or any shares of
Omnichannel Class A common stock issuable upon conversion thereof) until the
earlier of (i) one year after the completion of the Business Combination, (ii)
any time during which the closing price of the Pubco common stock equals or
exceeds $12.00 per share (adjusted for any stock split, stock dividend, or the
like) for 20 days in any 30-day period (such period commencing at least 150 days
after the Business Combination), or (iii) the date on which Omnichannel
completes a liquidation, merger or similar transaction that results in all
Omnichannel stockholders having the right to exchange Class A common stock for
cash, securities or other property. In the event that Kin waives, releases, or
terminates the Lockup Agreement (such agreement discussed below) with respect to
any shares or holders, then the holders of the Founder Shares subject to the
Sponsor Letter Agreement will be granted a pro rata share in such waiver,
release or termination.
Pursuant to the Sponsor Letter Agreement, each Founder Share not forfeited will
be converted into one share of Pubco common stock in connection with the
Closing.
The insiders who are party to the Sponsor Letter Agreement include Omnichannel
directors and executive officers Matt Higgins, Christine Pantoya, Austin Simon,
Bobbi Brown, Albert Cary, Priya Dogra, Mark Gerson and Emmett Shine.
Lockup Agreement
In connection with the execution of the Business Combination Agreement, certain
Kin stockholders have entered into lockup agreements (the "Lockup Agreements")
with Omnichannel. Pursuant to the Lockup Agreements, each stockholder may not,
with limited exceptions, transfer shares until the earlier of (i) 180 days after
Closing, and (ii) the date on which Omnichannel completes a liquidation, merger
or similar transaction that results in all Omnichannel stockholders having the
right to exchange Class A common stock for cash, securities or other property.
In the event that Pubco waives, releases, or terminates the lockup provision in
the Sponsor Letter Agreement (such agreement discussed above) with respect to
any shares held by Sponsors, then the holders of the common stock subject to
this Lockup Agreement will be granted a pro rata share in such waiver, release
or termination.
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Director Nomination Agreement
In connection with the Closing, Pubco and the Sponsor will enter into a director
nomination agreement (the "Director Nomination Agreement"). Pursuant to the
Director Nomination Agreement, the Sponsor will hold certain rights to nominate
a member of the board of directors of Pubco, effective as of the Closing Date,
subject to the conditions set forth in the Director Nomination Agreement. The
Sponsor's initial nominee to the board is expected to be Matt Higgins. Until
fifteen (15) months after the Director Nomination Agreement, Sponsor has the
right to name a second board member who is independent under NYSE listing rules
and for audit committee purposes, provided that such nominee is reasonably
acceptable to Pubco. The Director Nomination Agreement will terminate as of the
date that is twenty-four (24) months after the Closing.
Liquidity and Going Concern
As of September 30, 2021, we had approximately $288,000 in cash and working
capital deficit of approximately $2.7 million.
Our liquidity needs had been satisfied through a capital contribution of $25,000
from the Sponsor to purchase the Founder Shares (as defined below), the loan
under the Note from the Sponsor of approximately $105,000 (see Note 4) to us,
and the net proceeds from the consummation of the Private Placement not held in
the Trust Account. We fully repaid the Note, or our officers and directors may,
but are not obligated to, provide us Working Capital Loans (see Note 4).
On September 10, 2021, the Sponsor agreed to loan us an aggregate of up to
$300,000 (see Note 4) to cover expenses related to the Business Combination
pursuant to a convertible promissory note (the "Convertible Note"). This loan is
non-interest bearing and payable on the earlier of (i) November 19, 2022 and
(ii) the effective date of a Business Combination. We borrowed $300,000 under
the Convertible Note and there was $300,000 outstanding as of September 30, 2021
(see Note 4).
In connection with our assessment of going concern considerations in accordance
with FASB ASC Topic 205-40, "Presentation of Financial Statements - Going
Concern," management has determined that the liquidity condition, mandatory
liquidation date and subsequent dissolution raises substantial doubt about our
ability to continue as a going concern. If we are unable to complete a business
combination by May 24, 2022, then we will cease all operations except for the
purpose of liquidating. No adjustments have been made to the carrying amounts of
assets or liabilities should we be required to liquidate after May 24, 2022.
Management continues to evaluate the impact of the COVID-19 pandemic and has
concluded that the specific impact is not readily determinable as of the date of
the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity since inception up to September 30, 2021 was in preparation
for our formation and the Initial Public Offering. We will not be generating any
operating revenues until the closing and completion of our initial Business
Combination.
For the three months ended September 30, 2021, we had net gain of approximately
$1.9 million which consisted of an approximately $3.0 million in change fair
value of derivative warrant liabilities, approximately $3,000 of income from our
investments held in the Trust Account, which were partially offset by $1.0
million in general and administrative expenses, $12,000 in general and
administrative expenses - related party and approximately $50,000 in franchise
tax.
For the nine months ended September 30, 2021, we had net income of approximately
$3.3 million which consisted of an approximately $7.4 million gain in change
fair value of derivative warrant liabilities and approximately $77,000 of income
from our investments held in the Trust Account, partially offset by $4.0 million
in general and administrative expenses, $36,000 in general and administrative
expenses - related party and approximately $149,000 in franchise tax.
For the period from September 9, 2020 (inception) through September 30, 2020, we
had a net loss of $2,000 consisting of general and administrative expenses.
Contractual Obligations
Registration and Stockholder Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans, if any (and any shares of
Class A common stock issuable upon the exercise of the Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital
Loans), are entitled to registration rights pursuant to a registration rights
agreement. The holders of these securities are entitled to make up to three
demands, excluding short form demands, that we register such securities. In
addition, the holders have certain "piggy-back" registration rights with respect
to registration statements filed subsequent to the completion of the initial
Business Combination. We will bear the expenses incurred in connection with the
filing of any such registration statements.
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Administrative Services Agreement
We entered into an agreement that provided that, commencing on the effective
date of the prospectus through the earlier of consummation of the initial
Business Combination and our liquidation, we agreed to pay the Sponsor a total
of $4,000 per month for office space, secretarial, expense for period and
administrative services provided to members of our management team.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per Unit, or
$4.0 million in the aggregate, paid upon the closing of the Initial Public
Offering. In addition, the underwriters are entitled to a deferred fee of $0.35
per Unit, or approximately $7.0 million in the aggregate. The deferred fee will
become payable to the underwriters from the amounts held in the Trust Account
solely in the event that we complete a Business Combination, subject to the
terms of the underwriting agreement.
In connection with the consummation of the Over-Allotment on November 30, 2020,
the underwriters were entitled to an additional fee of $130,000 paid upon
closing, and $227,500 in deferred underwriting commissions.
Critical Accounting Policies
Derivative Warrant Liabilities
We do not use derivative instruments to hedge its exposures to cash flow, market
or foreign currency risks. Management evaluates all of the Company's financial
instruments, including issued warrants to purchase its Class A common stock, to
determine if such instruments are derivatives or contain features that qualify
as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815,
"Derivatives and Hedging" ("ASC 815"). The classification of derivative
instruments, including whether such instruments should be recorded as
liabilities or as equity, is re-assessed at the end of each reporting period.
The warrants issued in connection with the Initial Public Offering (the "Public
Warrants") and the Private Placement Warrants are recognized as derivative
liabilities in accordance with ASC 815. Accordingly, the Company recognizes the
warrant instruments as liabilities at fair value and adjusts the instruments to
fair value at each reporting period. The liabilities are subject to
re-measurement at each balance sheet date until exercised, and any change in
fair value is recognized in the statement of operations. The fair value of
Public Warrants and Private Warrants was estimated at December 31, 2020 using a
binomial / lattice model that assumes optimal exercise of the Company's
redemption option, including the make whole table, at the earliest possible
date. The fair value of Public Warrants and Private Warrants was measured at
September 30, 2021 by reference to the listed price in an active market for the
Public Warrants. The determination of the fair value of the warrant liability
may be subject to change as more current information becomes available and
accordingly the actual results could differ significantly. Derivative warrant
liabilities are classified as non-current liabilities as their liquidation is
not reasonably expected to require the use of current assets or require the
creation of current liabilities.
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 (if any) is
classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A common stock (including Class A common stock
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) are classified as temporary equity. At all other times,
Class A common stock is classified as stockholders' equity. Our Class A common
stock feature certain redemption rights that are considered to be outside of our
control and subject to the occurrence of uncertain future events. Accordingly,
as of September 30, 2021 and December 31, 2020, 20,650,000 shares of Class A
common stock subject to possible redemption are presented at redemption value as
temporary equity, outside of the stockholders' equity section of our condensed
consolidated balance sheets.
Effective with the closing of the Initial Public Offering (including exercise of
the over-allotment option), we recognized the accretion from initial book value
to redemption amount, which resulted in charges against additional paid-in
capital (to the extent available) and accumulated deficit.
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Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an "emerging growth company" and
under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As a result, the financial statements may not
be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditor's report
providing additional information about the audit and the financial statements
(auditor discussion and analysis) and (iv) disclose certain executive
compensation related items such as the correlation between executive
compensation and performance and comparisons of the CEO's compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our Initial Public Offering or until we are no
longer an "emerging growth company," whichever is earlier.
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