The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our unaudited financial
statements and the condensed notes related thereto which are included in
"Item 1. Financial Statements" of this Quarterly Report on Form 10-Q.
Cautionary note regarding forward-looking statements
All statements other than statements of historical fact included in this
Quarterly Report on Form 10-Q including, without limitation, statements under
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. When used in this Quarterly Report on Form 10-Q,
words such as "anticipate," "believe," "estimate," "expect," "intend" and
similar expressions, as they relate to us or the Company's management, identify
forward-looking statements. Such forward-looking statements are based on the
beliefs of management, as well as assumptions made by, and information currently
available to, the Company's management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors detailed in our filings with the SEC. All subsequent written or oral
forward-looking statements attributable to us or persons acting on the Company's
behalf are qualified in their entirety by this paragraph.
Overview
Simon Property Group Acquisition Holdings, Inc. (the "Company") was incorporated
in Delaware on December 17, 2020. The Company was 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"). The Company is not limited to a particular industry or
sector for purposes of consummating a Business Combination. The Company is an
early stage and emerging growth company and, as such, the Company is subject to
all of the risks associated with early stage and emerging growth companies. We
completed our Public Offering on February 23, 2021. As of March 31, 2021, we had
not identified any business combination target.
We presently have no revenue and have had no operations other than the active
solicitation of a target business with which to complete a business combination.
We have relied upon the sale of our securities to fund our operations.
Since completing our Public Offering, we have reviewed, and continue to review,
a number of opportunities to enter into a Business Combination with an operating
business, but we are not able to determine at this time whether we will complete
a Business Combination with any of the target businesses that we have reviewed
or with any other target business. We intend to effectuate our Business
Combination using cash from the proceeds of our Public Offering and the sale of
the Private Placement Warrants, our capital stock, debt, or a combination of
cash, stock and debt.
Results of Operations
For the three months ended March 31, 2021, we had net income of $432,609,
primarily as a result of the non-cash favorable change in fair value of our
derivative liabilities of $1,925,000. Our business activities during the quarter
mainly consisted of identifying and evaluating prospective acquisition
candidates for a Business Combination. We believe that we have sufficient funds
available to complete our efforts to effect a Business Combination with an
operating business by February 23, 2023. However, if our estimates of the costs
of identifying a target business, undertaking in-depth due diligence and
negotiating 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.
As indicated in the accompanying unaudited financial statements, at March 31,
2021, we had $769,392 in cash and deferred underwriting discount of $12,075,000.
Further, we expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete our Business
Combination will be successful.
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Liquidity and Capital Resources
Prior to the completion of the Initial Public Offering, the Company lacked the
liquidity it needed to sustain operations for a reasonable period of time, which
is considered to be one year from the issuance date of the financial statements.
The Company has since completed its Initial Public Offering at which time
capital in excess of the funds deposited in the trust and/or used to fund
offering expenses was released to the Company for general working capital
purposes. Accordingly, management has since reevaluated the Company's liquidity
and financial condition and determined that sufficient capital exists to sustain
operations for a period of at least 12 months from the date this financial
statement is issued and therefore substantial doubt has been alleviated.
On December 28, 2020, the Sponsor purchased 8,625,000 Founder Shares for an
aggregate purchase price of $25,000, or approximately $0.003 per share. The
Founder Shares included an aggregate of up to 1,125,000 shares subject to
forfeiture to the extent that the underwriter's option to purchase additional
units was not exercised in full or in part, so that the number of Founder Shares
will equal, on an as-converted basis, approximately 20% of the Company's issued
and outstanding ordinary shares after the Initial Public Offering. As a result
of the underwriters' election to fully exercise their over-allotment option, no
Founder Shares are currently subject to forfeiture.
On December 28, 2020, the Sponsor issued an unsecured promissory note to the
Company (the "Promissory Note"), pursuant to which the Company may borrow up to
an aggregate principal amount of $300,000. The Promissory Note is non-interest
bearing and payable on the earlier of December 31, 2021 or the consummation of
the Initial Public Offering. As of February 23, 2021, there was $250 outstanding
under the Promissory Note. Of the outstanding balance under the Promissory
Note of $107,197, $106,947 was repaid at the closing of the Initial Public
Offering on February 23, 2021 and $250 was repaid on February 25, 2021.
On February 23, 2021, the Company consummated its Initial Public Offering of
34,500,000 Units at a price of $10.00 per Unit, including 4,500,000 Units as a
result of the underwriter's partial exercise of its over-allotment option,
generating gross proceeds of $345,000,000. On the Initial Public Offering
Closing Date, we completed the private sale of an aggregate of 5,933,333 Private
Placement Warrants, each exercisable to purchase one share of Common Stock at
$11.50 per share, to our Sponsor, at a price of $1.50 per Private Placement
Warrant, generating gross proceeds, before expenses, of $8,900,000. After
deducting the underwriting discounts and commissions (excluding the Deferred
Discount, which amount will be payable upon consummation of the Business
Combination, if consummated) and the estimated offering expenses, the total net
proceeds from our Public Offering and the sale of the Private Placement Warrants
were $346,464,342, of which $345,000,000 (or $10.00 per share sold in the
Initial Public Offering) was placed in the Trust Account. The amount of proceeds
not deposited in the Trust Account on February 23, 2021 was $770,292 at the
closing of our Public Offering. Interest earned on the funds held in the Trust
Account may be released to us to fund our Regulatory Withdrawals, for a maximum
of 24 months and/or additional amounts necessary to pay our franchise and income
taxes.
As of March 31, 2021, we had cash held outside of the Trust Account of
approximately $769,392, which is available to fund our working capital
requirements. Additionally, interest earned on the funds held in the Trust
Account may be released to us to fund our Regulatory Withdrawals, for a maximum
of 24 months and/or additional amounts necessary to pay our franchise and income
taxes. At March 31, 2021, the Company had current liabilities of $44,643 and
working capital of $1,410,336.
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We intend to use substantially all of the funds held in the Trust Account,
including interest (which interest shall be net of Regulatory Withdrawals and
taxes payable) to consummate our Business Combination. Moreover, we may need to
obtain additional financing either to complete a Business Combination or because
we become obligated to redeem a significant number of shares of our Common Stock
upon completion of a 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. To the extent
that our capital stock or debt is used, in whole or in part, as consideration to
consummate our Business Combination, the remaining proceeds held in our Trust
Account, if any, will be used as working capital to finance the operations of
the target business or businesses, make other acquisitions and pursue our growth
strategy.
Off-balance Sheet Financing Arrangements
We had no obligations, assets or liabilities which would be considered
off-balance sheet arrangements at 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 had not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or entered into any non-financial agreements involving assets.
Contractual Obligations
As of March 31, 2021, we did not have any long-term debt obligations, capital
lease obligations, operating lease obligations, purchase obligations or
long-term liabilities. The Company agreed, commencing on February 18, 2021
through the earlier of the Company's consummation of a Business Combination and
its liquidation, to pay an affiliate of the Sponsor a total of $9,500 per month
for office space, administrative and support services.
The underwriter is entitled to underwriting discounts and commissions of 5.5%
($18,975,000), of which 2.0% ($6,900,000) was paid at the closing of the Public
Offering, and 3.5% ($12,075,000) was deferred. The Deferred Discount will become
payable to the underwriter 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. The underwriter is not entitled to any
interest accrued on the Deferred Discount.
Recently Issued Accounting Pronouncements Not Yet Adopted
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
the Company's financial statements based on current operations of the Company.
The impact of any recently issued accounting standards will be re-evaluated on a
regular basis or if a business combination is completed where the impact could
be material.
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