UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-39760
FINTECH ACQUISITION CORP. V
(Exact Name of Registrant as Specified in Its Charter)
Delaware |
|
84-4794021 |
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification Number)
|
2929
Arch Street, Suite 1703, Philadelphia, PA |
|
19104 |
(Address
of Principal Executive Offices) |
|
(Zip
Code) |
(215) 701-9555
(Issuer’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
|
|
|
|
|
Class
A Common Stock, par value $0.0001 per share |
|
FTCV |
|
Nasdaq
Capital Market |
Warrants,
each to purchase one share of Class A Common Stock |
|
FTCVW |
|
Nasdaq
Capital Market |
Units,
each consisting of one share of Class A Common Stock and one-third
of one Warrant |
|
FTCVU |
|
Nasdaq
Capital Market |
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company or an emerging growth company. See
definitions of “large accelerated filer”, “accelerated filer”,
“smaller reporting company”, and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
Non-accelerated
filer |
☒ |
Smaller
reporting company |
☒ |
|
Emerging
growth company |
☒ |
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes ☒ No ☐
As of May 13, 2022, there were 25,640,000 shares of Class A common
stock, $0.0001 par value, and 8,546,667 shares of Class B common
stock, $0.0001 par value, issued and outstanding.
FINTECH ACQUISITION CORP. V
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2022
TABLE OF CONTENTS
FINTECH ACQUISITION CORP. V
CONDENSED BALANCE SHEETS
|
|
March 31,
2022
|
|
|
December 31,
2021
|
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash |
|
$ |
339,814 |
|
|
$ |
36,042 |
|
Prepaid expenses |
|
|
217,761 |
|
|
|
239,706 |
|
Total Current Assets |
|
|
557,575 |
|
|
|
275,748 |
|
|
|
|
|
|
|
|
|
|
Marketable securities held in Trust Account |
|
|
250,030,644 |
|
|
|
250,008,357 |
|
TOTAL ASSETS |
|
$ |
250,588,219 |
|
|
$ |
250,284,105 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES, CLASS A COMMON STOCK SUBJECT
TO POSSIBLE
REDEMPTION AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accrued
expenses |
|
$ |
2,377,637 |
|
|
$ |
2,452,673 |
|
Promissory note – related party |
|
|
1,150,000 |
|
|
|
300,000 |
|
Total Current Liabilities |
|
|
3,527,637 |
|
|
|
2,752,673 |
|
|
|
|
|
|
|
|
|
|
Warrant liabilities |
|
|
8,366,800 |
|
|
|
12,791,867 |
|
Deferred underwriting fee payable |
|
|
10,640,000 |
|
|
|
10,640,000 |
|
Total Liabilities |
|
|
22,534,437 |
|
|
|
26,184,540 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
common stock subject to possible redemption, $0.0001 par value;
25,000,000 shares as of March 31, 2022 and December 31, 2021
(at $10.00 per
share redemption value) |
|
|
250,000,000 |
|
|
|
250,000,000 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit |
|
|
|
|
|
|
|
|
Preferred
shares, $0.0001 par value; 1,000,000 shares authorized;
no
shares issued or outstanding |
|
|
—
|
|
|
|
—
|
|
Class A common stock, $0.0001 par value; 100,000,000 shares
authorized; 640,000 shares issued and outstanding at March 31, 2022
and December 31, 2021 |
|
|
64 |
|
|
|
64 |
|
Class B common stock, $0.0001 par value; 10,000,000 shares
authorized; 8,546,667 shares issued and outstanding at March 31,
2022 and December 31, 2021 |
|
|
855 |
|
|
|
855 |
|
Accumulated deficit |
|
|
(21,947,137 |
) |
|
|
(25,901,354 |
) |
Total Stockholders’ Deficit |
|
|
(21,946,218 |
) |
|
|
(25,900,435 |
) |
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO
POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
|
$ |
250,588,219 |
|
|
$ |
250,284,105 |
|
The accompanying notes are an integral part of these condensed
financial statements.
FINTECH ACQUISITION CORP. V
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
Three
Months Ended
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
General and administrative expenses |
|
$ |
493,137 |
|
|
$ |
1,547,408 |
|
Loss from operations |
|
|
(493,137 |
) |
|
|
(1,547,408 |
) |
|
|
|
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
|
|
|
|
Change in fair value of warrant
liabilities |
|
|
4,425,067 |
|
|
|
(3,422,667 |
) |
Interest earned
on marketable securities held in Trust Account |
|
|
22,287 |
|
|
|
6,165 |
|
Other income (expense), net |
|
|
4,447,354 |
|
|
|
(3,416,502 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,954,217 |
|
|
$ |
(4,963,910 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Class A common stock |
|
|
25,640,000 |
|
|
|
25,640,000 |
|
Basic and diluted net income (loss) per share, Class A common
stock |
|
$ |
0.12 |
|
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Class B common stock |
|
|
8,546,667 |
|
|
|
8,546,667 |
|
Basic and diluted net income (loss) per share, Class B common
stock |
|
$ |
0.12 |
|
|
$ |
(0.15 |
) |
The accompanying notes are an integral part of these unaudited
condensed financial statements.
FINTECH ACQUISITION CORP. V
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2022
|
|
Class A
Common Stock |
|
|
Class B
Common Stock |
|
|
Additional
Paid-in |
|
|
Accumulated |
|
|
Total
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
Balance – January 1, 2022 |
|
|
640,000 |
|
|
$ |
64 |
|
|
|
8,546,667 |
|
|
$ |
855 |
|
|
$ |
—
|
|
|
$ |
(25,901,354 |
) |
|
$ |
(25,900,435 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
— |
|
|
|
—
|
|
|
|
— |
|
|
|
—
|
|
|
|
—
|
|
|
|
3,954,217 |
|
|
|
3,954,217 |
|
Balance – March 31, 2022 (unaudited) |
|
|
640,000 |
|
|
$ |
64 |
|
|
|
8,546,667 |
|
|
$ |
855 |
|
|
$ |
—
|
|
|
$ |
(21,947,137 |
) |
|
$ |
(21,946,218 |
) |
THREE MONTHS ENDED MARCH 31, 2021
|
|
Class A
Common Stock |
|
|
Class B
Common Stock |
|
|
Additional
Paid-in |
|
|
Accumulated |
|
|
Total
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
Balance – January 1, 2021 |
|
|
640,000 |
|
|
$ |
64 |
|
|
|
8,546,667 |
|
|
$ |
855 |
|
|
$ |
—
|
|
|
$ |
(26,447,919 |
) |
|
$ |
(26,447,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
— |
|
|
|
—
|
|
|
|
— |
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,963,910 |
) |
|
|
(4,963,910 |
) |
Balance – March 31, 2021 (unaudited) |
|
|
640,000 |
|
|
$ |
64 |
|
|
|
8,546,667 |
|
|
$ |
855 |
|
|
$ |
—
|
|
|
$ |
(31,411,829 |
) |
|
$ |
(31,410,910 |
) |
The accompanying notes are an integral part of these unaudited
condensed financial statements.
FINTECH ACQUISITION CORP. V
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
Three Months Ended
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,954,217 |
|
|
$ |
(4,963,910 |
) |
Adjustments to reconcile net income (loss) to net cash used in
operating activities: |
|
|
|
|
|
|
|
|
Interest earned on marketable securities held in Trust Account |
|
|
(22,287 |
) |
|
|
(6,165 |
) |
Change
in fair value of warrant liabilities |
|
|
(4,425,067 |
) |
|
|
3,422,667 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid
expenses |
|
|
21,945 |
|
|
|
28,574 |
|
Accrued expenses |
|
|
(75,036 |
) |
|
|
1,201,963 |
|
Net cash used in operating activities |
|
|
(546,228 |
) |
|
|
(316,871 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from promissory note - related party |
|
|
850,000 |
|
|
|
—
|
|
Net cash provided by financing activities |
|
|
850,000 |
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net Change in Cash |
|
|
303,772 |
|
|
|
(316,871 |
) |
Cash – Beginning |
|
|
36,042 |
|
|
|
1,054,211 |
|
Cash – Ending |
|
$ |
339,814 |
|
|
$ |
737,340 |
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Note 1 — Description of Organization and Business
Operations
FinTech Acquisition Corp. V (the “Company”) is a blank check
company incorporated in Delaware on April 22, 2019. The Company was
formed for the purpose of acquiring, through a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization
or other similar business transaction, one or more operating
businesses or assets (a “Business Combination”). The Company has
neither engaged in any operations nor generated significant revenue
to date.
As of March 31, 2022, the Company had not commenced operations. All
activity through March 31, 2022 relates to the Company’s formation,
the Initial Public Offering (as defined below), and, subsequent to
the Initial Public Offering, identifying a target company for a
Business Combination.
The registration statement for the Company’s Initial Public
Offering was declared effective on December 3, 2020. On December 8,
2020, the Company consummated the Initial Public Offering of
25,000,000 units (the “Units” and, with respect to the Class A
common stock included in the Units sold, the “Public Shares”),
which includes the partial exercise by the underwriters of their
over-allotment option in the amount of 3,200,000 Units, at $10.00
per Unit, generating gross proceeds of $250,000,000 which is
described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the
Company consummated the sale of 640,000 units (the “Private
Placement Units”) at a price of $10.00 per Private Placement Unit
in a private placement to FinTech Investor Holdings V, LLC, that
closed simultaneously with the Initial Public Offering, generating
gross proceeds of $6,400,000, which is described in Note 4. The
manager of FinTech Investor Holdings V, LLC is Cohen Sponsor
Interests V, LLC.
Transaction costs amounted to $15,461,590, consisting of $4,360,000
in cash underwriting fees, $10,640,000 of deferred underwriting
fees and $461,590 of other offering costs.
Following the closing of the Initial Public Offering on December 8,
2020, an amount of $250,000,000 ($10.00 per Unit) from the net
proceeds of the sale of the Units in the Initial Public Offering
and the sale of the Private Placement Units was placed in a trust
account (the “Trust Account”) and invested in U.S. government
securities, within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940, as amended, or the Investment
Company Act, with a maturity of 185 days or less, or in money
market funds meeting certain conditions under Rule 2a-7 of the
Investment Company Act, which invest only in direct U.S. government
treasury obligations, until the earlier of: (i) the
consummation of a Business Combination; (ii) the redemption of
any Public Shares in connection with a stockholder vote to amend
the Company’s Amended and Restated Certificate of Incorporation
(a) to modify the substance or timing of the Company’s
obligation to redeem 100% of its Public Shares if it does not
complete an initial Business Combination by December 8, 2022 (the
“Combination Period”) or (b) with respect to any other
provisions relating to stockholders’ rights or pre-initial Business
Combination activity; or (iii) the distribution of the Trust
Account, as described below, except that interest earned on the
Trust Account can be released to pay the Company’s tax obligations,
if the Company is unable to complete an initial Business
Combination within the Combination Period or upon any earlier
liquidation of the Company.
The Company’s 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 Units, although
substantially all of the net proceeds are intended to be applied
generally toward consummating a Business Combination. Nasdaq
Capital Market (“NASDAQ”) rules provide that the Company’s initial
Business Combination must be with one or more target businesses
that together have a fair market value equal to at least 80% of the
balance in the Trust Account (less any deferred underwriting
commissions and taxes payable on interest earned) at the time of
the signing a definitive agreement in connection with a Business
Combination. However, the Company will only complete a Business
Combination if the post-Business Combination company owns or
acquires a majority of the outstanding 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. There is no assurance
that the Company will be able to successfully effect a Business
Combination.
The Company will provide its stockholders with the opportunity to
redeem all or a portion of the Public Shares upon the completion of
a Business Combination either (i) in connection with a
stockholder meeting called to approve the Business Combination or
(ii) by means of a tender offer. The decision as to whether
the Company will seek stockholder approval of a Business
Combination or conduct a tender offer will be made by the Company,
solely in its discretion. The stockholders will be entitled to
redeem their shares for a pro rata portion of the amount then on
deposit in the Trust Account (initially approximately $10.00 per
share, plus any pro rata interest earned on the funds held in the
Trust Account and not previously released to the Company to pay its
tax obligations). The per-share amount to be distributed to
stockholders who redeem their shares will not be reduced by the
deferred underwriting commissions the Company will pay to the
representative (as discussed in Note 6). There will be no
redemption rights upon the completion of a Business Combination
with respect to the Company’s warrants.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
If a stockholder vote is not required by law and the Company does
not decide to hold a stockholder vote for business or other legal
reasons, the Company will, pursuant to its Amended and Restated
Certificate of Incorporation, conduct the redemptions pursuant to
the tender offer rules of the Securities and Exchange Commission
(“SEC”), and file tender offer documents with the SEC prior to
completing a Business Combination. If, however, stockholder
approval of the transaction is required by law, or the Company
decides to obtain stockholder approval for business or other legal
reasons, the Company will offer to redeem shares in conjunction
with a proxy solicitation pursuant to the proxy rules and not
pursuant to the tender offer rules. If the Company seeks
stockholder approval in connection with a Business Combination,
FinTech Investor Holdings V, LLC and FinTech Masala Advisors V, LLC
(collectively, the “Sponsor”) and the Company’s officers and
directors (together with the Sponsor, the “Insiders”) have agreed
to vote their Founder Shares (as defined in Note 5), the shares of
Class A common stock included in the Private Placement Units
(the “Private Placement Shares”) and any Public Shares held by them
in favor of approving a Business Combination.
The Company will have until the expiration of the Combination
Period to consummate its initial Business Combination. If the
Company is unable to consummate a Business Combination within the
Combination Period, the Company will (i) cease all operations
except for the purposes of winding up of its affairs;
(ii) distribute the aggregate amount then on deposit in the
Trust Account, including any amounts representing interest earned
on the Trust Account not previously released to the Company to pay
its franchise and income taxes and up to $100,000 to pay
dissolution expenses, pro rata to the public stockholders by way of
redemption of the Public Shares (which redemption would completely
extinguish such holders’ rights as stockholders, including the
right to receive further liquidation distributions, if any); and
(iii) as promptly as possible following such redemption,
dissolve and liquidate the balance of the Company’s net assets to
its remaining stockholders, as part of its plan of dissolution and
liquidation.
The Company will also provide its stockholders with the opportunity
to redeem all or a portion of their Public Shares in connection
with any stockholder vote to approve an amendment to the Company’s
Amended and Restated Certificate of Incorporation (i) that
would modify the substance or timing of the Company’s obligation to
redeem 100% of Public Shares if it does not complete an initial
Business Combination within the Combination Period or
(ii) with respect to any other provisions relating to
stockholders’ rights or pre-initial Business Combination activity.
The stockholders will be entitled to redeem their shares for a pro
rata portion of the amount then on deposit in the Trust Account
(initially approximately $10.00 per share, plus any pro rata
interest earned on the funds held in the Trust Account, net of
taxes payable). The per-share amount to be distributed to
stockholders who redeem their shares will not be reduced by the
deferred underwriting commissions the Company will pay to the
representative (as discussed in Note 6). There will be no
redemption rights with respect to the Company’s warrants in
connection with any stockholder vote to approve an amendment to the
Company’s Amended and Restated Certificate of Incorporation.
Notwithstanding the foregoing, the Company may not redeem shares in
an amount that would cause its net tangible assets to be less than
$5,000,001. The Insiders have agreed to vote any Founder Shares,
Private Placement Shares and any Public Shares held by them in
favor of any such amendment.
The Insiders have agreed to waive their redemption rights with
respect to any Founder Shares and Private Placement Shares, as
applicable, (i) in connection with the consummation of a
Business Combination, (ii) in connection with a stockholder
vote to amend the Company’s Amended and Restated Certificate of
Incorporation (a) to modify the substance or timing of the
Company’s obligation to redeem 100% of its Public Shares if it does
not complete its initial Business Combination within the
Combination Period or (b) with respect to any other provisions
relating to stockholders’ rights or pre-initial Business
Combination activity, and (iii) if the Company fails to
consummate a Business Combination within the Combination Period.
The Insiders have also agreed to waive their redemption rights with
respect to any Public Shares held by them in connection with the
consummation of a Business Combination and in connection with a
stockholder vote to amend the Company’s Amended and Restated
Certificate of Incorporation (i) to modify the substance or
timing of the Company’s obligation to redeem 100% of its Public
Shares if it does not complete its initial Business Combination
within the Combination Period or (ii) with respect to any
other provisions relating to stockholders’ rights or pre-initial
Business Combination activity. However, the Insiders will be
entitled to redemption rights with respect to Public Shares if the
Company fails to consummate a Business Combination or liquidates
within the Combination Period. The representative of the
underwriters has agreed to waive its rights to deferred
underwriting commissions held in the Trust Account in the event the
Company does not consummate a Business Combination within the
Combination Period and, in such event, such amounts will be
included with the funds held in the Trust Account that will be
available to fund the redemption of the Public Shares. In the event
of such distribution, it is possible that the per share value of
the residual assets remaining available for distribution (including
Trust Account assets) will be less than the initial public offering
price per Unit in the Initial Public Offering. Placing funds in the
Trust Account may not protect those funds from third party claims
against the Company. Although the Company will seek to have all
vendors, service providers, prospective target businesses or other
entities it engages (except for the Company’s independent
registered public accounting firm), execute agreements with the
Company waiving any claim of any kind in or to any monies held in
the Trust Account, there is no guarantee that such persons will
execute such agreements. FinTech Investor Holdings V, LLC has
agreed that it will be liable under certain circumstances to ensure
that the proceeds in the Trust Account are not reduced by the
claims of target businesses or vendors or other entities that are
owed money by the Company for service rendered, contracted for or
products sold to the Company to below (i) $10.00 per Public Share
or (ii) such lesser amount per Public Share held in the Trust
Account as of the date of the liquidation of the Trust Account due
to reductions in the value of the trust assets. However, it may not
be able to satisfy those obligations should they arise.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Notwithstanding the foregoing redemption rights, if the Company
seeks stockholder approval of its Business Combination and it does
not conduct redemptions in connection with its Business Combination
pursuant to the tender offer rules, the Amended and Restated
Certificate of Incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person
with whom such stockholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be
restricted from redeeming its shares with respect to an aggregate
of 15% or more of the shares sold in the Initial Public Offering.
However, there is no restriction on the Company’s stockholders’
ability to vote all of their shares for or against a Business
Combination.
Going Concern and Liquidity
As of March 31, 2022, the Company had $339,814 in its operating
bank accounts, $250,030,644 in securities held in the Trust Account
to be used for a Business Combination or to repurchase or redeem
its Public Shares in connection therewith and a working capital
deficit of $2,970,062. As of March 31, 2022, approximately $30,644
of the amount on deposit in the Trust Account represented interest
income, which is available to pay the Company’s tax
obligations.
If the Company is unable to raise additional capital, it may be
required to take additional measures to conserve liquidity, which
could include, but not necessarily be limited to, suspending the
pursuit of a Business Combination. The Company cannot provide any
assurance that new financing will be available to it on
commercially acceptable terms, if at all.
As a result of the above, in connection with the Company’s
assessment of going concern considerations in accordance with
Financial Accounting Standard Board’s (“FASB”) Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an
Entity’s Ability to Continue as a Going Concern,” management has
determined that the liquidity condition raises substantial doubt
about the Company’s ability to continue as a going concern. These
financial statements do not include any adjustments relating to the
recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to
continue as a going concern.
Note 2 — Summary of Significant Accounting
Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) for interim
financial information and in accordance with the instructions to
Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for
interim financial reporting. Accordingly, they do not include all
the information and footnotes necessary for a complete presentation
of financial position, results of operations, or cash flows. In the
opinion of management, the accompanying unaudited condensed interim
financial statements include all adjustments, consisting of a
normal recurring nature, which are necessary for a fair
presentation of the financial position, operating results and cash
flows for the periods presented.
The accompanying unaudited condensed financial statements should be
read in conjunction with the Company’s Annual Report on Form 10-K
for the year ended December 31, 2021 as filed with the SEC on
February 18, 2022, which contains the audited financial statements
and notes thereto. The interim results for the three months ended
March 31, 2022 are not necessarily indicative of the results to be
expected for the year ending December 31, 2022 or for any future
interim periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in
Section 2(a) of the Securities Act, as modified by the
Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and
it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are
not emerging growth companies, including, but not limited to, not
being required to comply with the independent registered public
accounting firm attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy
statements, and exemptions from the requirements of holding a
nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously
approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised
financial accounting standards until private companies (that is,
those that have not had a Securities Act registration statement
declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or
revised financial accounting standards. The JOBS Act provides that
a company can elect to opt out of the extended transition period
and comply with the requirements that apply to non-emerging growth
companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition
period, which means that when a standard is issued or revised and
it has different application dates for public or private companies,
the Company, as an emerging growth company, can adopt the new or
revised standard at the time private companies adopt the new or
revised standard. This may make comparison of the Company’s
financial statements with another public company which is neither
an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or
impossible because of the potential differences in accounting
standards used.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Use of Estimates
The preparation of condensed financial statements in conformity
with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
condensed financial statements and the reported amounts of revenues
and expenses during the reporting period.
Making estimates requires management to exercise significant
judgment. It is at least reasonably possible that the estimate of
the effect of a condition, situation or set of circumstances that
existed at the date of the condensed financial statements, which
management considered in formulating its estimate, could change in
the near term due to one or more future events. Accordingly, the
actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original
maturity of three months or less when purchased to be cash
equivalents. The Company did not have any cash equivalents as of
March 31, 2022 and December 31, 2021.
Marketable Securities Held in Trust Account
The Company’s portfolio of investments held in the Trust Account is
comprised of U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act, with a
maturity of 185 days or less, or investments in money market funds
that invest in U.S. government securities, or a combination
thereof. At March 31, 2022 and December 31, 2021, the assets held
in the Trust Account were held in money market funds which are
invested primarily in U.S. Treasury Securities.
Warrant Liabilities
The Company does not use derivative instruments to hedge exposures
to cash flow, market, or foreign currency risks. The Company
evaluates all of its financial instruments, including issued stock
purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant
to Accounting Standards Codification (“ASC”) Topic 480,
“Distinguishing Liabilities from Equity” (“ASC 480”) and FASB ASC
Topic 815, “Derivatives and Hedging” (“ASC 815”). The Company
accounts for the Public Warrants and Private Placement Warrants
(together with the Public Warrants, the “Warrants”) in accordance
with the guidance contained in ASC 815-40 under which the Warrants
do not meet the criteria for equity treatment and must be recorded
as liabilities. Accordingly, the Company classifies the Warrants as
liabilities at their fair value and adjusts them to fair value at
each reporting period. This liability is subject to re-measurement
at each balance sheet date until exercised, and any change in fair
value is recognized in the statements of operations. The Private
Placement Warrants are valued using a Modified Black-Scholes Option
Pricing model. A Monte Carlo simulation methodology was used in
estimating the fair value of the Public Warrants for periods where
no observable traded price was available. For periods subsequent to
the detachment of the Public Warrants from the Units, the Public
Warrant quoted market price was used as the fair value as of each
relevant date.
Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to
possible redemption in accordance with the guidance in ASC 480.
Class A common stock subject to mandatory redemption is classified
as a liability instrument and is measured at fair value.
Conditionally redeemable common stock (including common stock that
features redemption rights that are either within the control of
the holder or subject to redemption upon the occurrence of
uncertain events not solely within the Company’s control) is
classified as temporary equity. At all other times, common stock is
classified as stockholders’ equity. The Company’s Class A common
stock features certain redemption rights that are considered to be
outside of the Company’s control and subject to occurrence of
uncertain future events. Accordingly, at March 31, 2022 and
December 31, 2021, 25,000,000 shares of Class A common stock
subject to possible redemption are presented as temporary equity,
outside of the stockholders’ deficit section of the Company’s
condensed balance sheets.
The Company recognizes changes in redemption value immediately as
they occur and adjusts the carrying value of redeemable common
stock to equal the redemption value at the end of each reporting
period.
At March 31, 2022 and December 31, 2021, the Class A common stock
reflected in the condensed balance sheets is reconciled in the
following table:
Gross proceeds |
|
$ |
250,000,000 |
|
Less: |
|
|
|
|
Proceeds allocated to Public Warrants |
|
|
(15,583,335 |
) |
Class
A common stock issuance costs |
|
|
(15,038,973 |
) |
Plus: |
|
|
|
|
Accretion of carrying value to redemption value |
|
|
30,622,308 |
|
|
|
|
|
|
Class A common stock subject to possible redemption |
|
$ |
250,000,000 |
|
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Offering Costs
Offering costs consisted of underwriting, legal, accounting and
other expenses incurred through the closing date of the Initial
Public Offering that were directly related to the Initial Public
Offering. Offering costs are allocated to the separable financial
instruments issued in the Initial Public Offering based on a
relative fair value basis, compared to total proceeds received.
Offering costs associated with derivative warrant liabilities are
expensed as incurred, presented as non-operating expenses in the
statements of operations. Offering costs associated with the Public
Shares were charged to stockholders’ deficit upon the completion of
the Initial Public Offering. Offering costs amounted to
$15,461,590, of which $15,038,973 were charged to stockholders’
deficit upon the completion of the Initial Public Offering and
$422,617 were charged to the statements of operations.
Income Taxes
The Company accounts for income taxes under ASC Topic 740 “Income
Taxes” (“ASC 740”), which requires an asset and liability approach
to financial accounting and reporting for income taxes. Deferred
income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and
liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable
income. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be
realized.
The Company’s taxable income primarily consists of interest income
on the Trust Account. The Company’s general and administrative
costs are generally considered start-up costs and are not currently
deductible. The Company’s effective tax rate of 0% for the three
months ended March 31, 2022 differs from the expected income tax
rate primarily due to the start-up costs (discussed above), which
are not currently deductible, and to permanent differences mainly
attributable to the change in the fair value of the warrant
liabilities.
ASC 740 prescribes a recognition threshold and a measurement
attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For
those benefits to be recognized, a tax position must be more likely
than not to be sustained upon examination by taxing authorities.
The Company recognizes accrued interest and penalties related to
unrecognized tax benefits as income tax expense. There were no
unrecognized tax benefits and no amounts accrued for interest and
penalties as of March 31, 2022 and December 31, 2021. The
Company is currently not aware of any issues under review that
could result in significant payments, accruals or material
deviation from its position.
The Company may be subject to potential examination by federal,
state and city taxing authorities in the areas of income taxes.
These potential examinations may include questioning the timing and
amount of deductions, the nexus of income among various tax
jurisdictions and compliance with federal, state and city tax laws.
The Company’s management does not expect that the total amount of
unrecognized tax benefits will materially change over the next
twelve months. The Company is subject to income tax examinations by
major taxing authorities since inception.
Net Income (Loss) Per Common Share
The Company complies with accounting and disclosure requirements of
FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per
common share is computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding for
the period. The Company applies the two-class method in calculating
earnings per share. Accretion associated with the redeemable shares
of Class A common stock is excluded from earnings per share as the
redemption value approximates fair value.
The calculation of diluted income (loss) per common share does not
consider the effect of the warrants issued in connection with the
(i) Initial Public Offering, and (ii) the private placement since
the exercise of the warrants is contingent upon the occurrence of
future events. The warrants are exercisable to purchase 8,546,667
shares of Class A common stock in the aggregate. As of March 31,
2022 and 2021, the Company did not have any dilutive securities or
other contracts that could, potentially, be exercised or converted
into common stock and then share in the earnings of the Company. As
a result, diluted net income (loss) per common share is the same as
basic net income (loss) per common share for the periods
presented.
The following table reflects the calculation of basic and diluted
net income (loss) per common share (in dollars, except share
amounts):
|
|
Three Months Ended
March 31, 2022 |
|
|
Three Months Ended
March 31, 2021 |
|
|
|
Class A |
|
|
Class B |
|
|
Class A |
|
|
Class B |
|
Basic and diluted net income (loss)
per common share |
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income (loss), as adjusted |
|
$ |
2,965,663 |
|
|
$ |
988,554 |
|
|
$ |
(3,722,932 |
) |
|
$ |
(1,240,9781,487,055
|
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding |
|
|
25,640,000 |
|
|
|
8,546,667 |
|
|
|
25,640,000 |
|
|
|
8,546,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net income (loss) per common share |
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.15 |
) |
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Concentration of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist of a cash account in a
financial institution, which, at times, may exceed the Federal
Depository Insurance Corporation coverage limit of $250,000. The
Company has not experienced losses on this account and management
believes the Company is not exposed to significant risks on such
account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities which
qualify as financial instruments under ASC Topic 820, “Fair Value
Measurement,” approximate the carrying amounts represented in the
Company’s condensed balance sheets, primarily due to their
short-term nature other than warrant liabilities (see Note 9). As
of March 31, 2022 and December 31, 2021, the carrying values of
cash, accounts payable and accrued expenses approximate their fair
values due to the short-term nature of the instruments. The
Company’s portfolio of marketable securities held in the Trust
Account is comprised of investments in U.S. Treasury securities
with an original maturity of 185 days or less. The fair value for
trading securities is determined using quoted market prices in
active markets.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board issued
Accounting Standard Update (“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 other recently issued, but not
yet effective, accounting standards if currently adopted would have
a material effect on the Company’s condensed financial
statements.
Note 3 — Initial Public Offering
Pursuant to the Initial Public Offering, the Company sold
25,000,000 Units, which includes a partial exercise by the
underwriters of their over-allotment option in the amount of
3,200,000 Units, at a purchase price of $10.00 per Unit. Each Unit
consists of one share of Class A common stock and one-third of
one warrant (“Public Warrant”). Each whole Public Warrant entitles
the holder to purchase one share of Class A common stock at an
exercise price of $11.50, subject to adjustment (see Note 8).
Note 4 — Private Placement
Simultaneously with the closing of the Initial Public Offering,
FinTech Investor Holdings V, LLC purchased 640,000 Private
Placement Units at a price of $10.00 per Private Placement Unit, or
$6,400,000 in the aggregate in a private placement. Each Private
Placement Unit consists of one share of Class A common stock
and one-third of one warrant (the “Private Placement Warrant”).
Each whole Private Placement Warrant is exercisable for one whole
share of Class A common stock at a price of $11.50 per share,
subject to adjustment. The proceeds from the sale of the Private
Placement Units were added to the proceeds from the Initial Public
Offering held in the Trust Account. If the Company does not
complete a Business Combination within the Combination Period, the
proceeds from the sale of the Private Placement Units will be used
to fund the redemption of the Public Shares (subject to the
requirements of applicable law) and the Private Placement Warrants
will expire worthless. There will be no redemption rights or
liquidating distributions from the Trust Account with respect to
the Private Placement Warrants.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Note 5 — Related Party Transactions
Founder Shares
In June 2019, the Company issued an aggregate of 1,000 shares
of common stock to FinTech Investor Holdings V, LLC (the “Founder
Shares”) for an aggregate purchase price of $25,000. FinTech
Investor Holdings V, LLC paid for certain offering costs
on behalf of the Company in October 2020 in lieu of remitting
payment for the purchase of the Founder Shares to the Company.
In October 2020, the Company filed an amendment to its
certificate of incorporation to, among other things, create two
classes of common stock, Class A and Class B, and to
convert the outstanding Founder Shares into shares of Class B
common stock. The Founder Shares will automatically convert into
shares of Class A common stock upon consummation of a Business
Combination on a one-for-one basis, subject to certain adjustments,
as described in Note 8. Additionally, the Company completed an
approximate 8,455-for-1 forward stock split of its common stock and
a share dividend of 1.01360142. As a result of these transactions,
the Sponsor held 8,570,000 Founder Shares, of which 1,090,000
shares were subject to forfeiture to the extent that the
underwriters’ over-allotment option was not exercised in full or in
part, so that the Founder Shares would represent 25% of the
Company’s aggregate Founder Shares, Private Placement Shares and
issued and outstanding Public Shares after the Initial Public
Offering. As a result of the underwriters’ election to partially
exercise their over-allotment option and the forfeiture of their
remaining over-allotment option, 23,333 Founder Shares were
forfeited and 1,066,667 Founder Shares are no longer subject to
forfeiture, resulting in an aggregate of 8,546,667 Founder Shares
issued and outstanding.
The Insiders have agreed not to transfer, assign or sell any of
their Founder Shares (except to permitted transferees)
(i) with respect to 25% of such shares, until consummation of
the Company’s initial Business Combination, (ii) with respect
to 25% of such shares, until the closing price of the Class A
common stock exceeds $12.00 for any 20 trading days within a
30-trading day period following the consummation of a Business
Combination, (iii) with respect to 25% of such shares, until
the closing price of the Class A common stock exceeds $13.50
for any 20 trading days within a 30-trading day period following
the consummation of a Business Combination, and (iv) with
respect to 25% of such shares, until the closing price of the
Class A common stock exceeds $17.00 for any 20 trading days
within a 30-trading day period following the consummation of a
Business Combination or earlier, in any case, if, following a
Business Combination, the Company completes a liquidation, merger,
capital stock exchange, reorganization or other similar transaction
that results in all of the public stockholders having the right to
exchange their shares of common stock for cash, securities or other
property.
Administrative Services Agreement
The Company agreed, commencing on December 4, 2020 through the
earlier of the Company’s consummation of a Business Combination and
its liquidation, to pay the Sponsor or an affiliate of the Sponsor
$20,000 per month for office space, administrative and shared
personnel support services. For the three months ended March 31,
2022 and 2021, the Company incurred and paid $60,000 for
administrative services. As of March 31, 2022 and December 31,
2021, there were no amounts accrued for administrative service fees
in the accompanying condensed balance sheets.
Promissory Note – Related Party
In order to finance transaction costs in connection with a Business
Combination, the Sponsor, members of the Company’s management team
or any of their respective affiliates or other third parties may,
but are not obligated to, loan the Company funds as may be required
(“Working Capital Loans”), which will be repaid only upon the
consummation of a Business Combination. If the Company does not
consummate a Business Combination, the Company may use a portion of
any funds held outside the Trust Account to repay the Working
Capital Loans; however, no proceeds from the Trust Account may be
used for such repayment. If such funds are insufficient to repay
the Working Capital Loans, the unpaid amounts would be forgiven. On
September 15, 2021, the Company issued a promissory note to FinTech
Masala, LLC, pursuant to which the Company could borrow up to an
aggregate principal amount of $750,000, which was subsequently
amended on October 27, 2021 to remove the conversion option. The
promissory note was further amended on January 6, 2022 to increase
the Maximum Principal Amount from $750,000 to $2,000,000. The
promissory note is non-interest bearing, unsecured and due upon the
completion of the Initial Business Combination. As of March 31,
2022 and December 31, 2021, the Company had $1,150,000 and $300,000
of outstanding borrowings under this promissory note,
respectively.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Note 6 — Commitments and Contingencies
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19
pandemic and has concluded that while it is reasonably possible
that the virus could have a negative effect on the Company’s
financial position, results of its operations and/or the close of
an initial business combination, the specific impact is not readily
determinable as of the date of these condensed financial
statements. The condensed financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Registration Rights
Pursuant to a registration rights agreement entered into on
December 3, 2020, the holders of the Founder Shares, Private
Placement Units (including securities contained therein) and the
units that may be issued upon conversion of the Working Capital
Loans (and any shares of Class A common stock issuable upon
the exercise of the Private Placement Warrants or the warrants
included in the units issued upon conversion of the Working Capital
Loans) will be entitled to registration rights, requiring the
Company to register such securities for resale (in the case of the
Founder Shares, only after conversion to our Class A common
stock). The holders of the majority of these securities are
entitled to make up to three demands, excluding short form demands,
that the Company register such securities. In addition, the holders
have certain “piggy-back” registration rights with respect to
registration statements filed subsequent to the completion of a
Business Combination and rights to require the Company to register
for resale such securities pursuant to Rule 415 under the
Securities Act. The registration rights agreement does not contain
liquidated damages or other cash settlement provisions resulting
from delays in registering our securities. The Company will bear
the expenses incurred in connection with the filing of any such
registration statements.
Underwriting Agreement
Cantor Fitzgerald & Co., as representative of the several
underwriters, is entitled to a deferred fee of (i) 4.0% of the
gross proceeds of the initial 21,800,000 Units sold in the Initial
Public Offering, or $8,720,000, and (ii) 6% of the gross proceeds
from the Units sold pursuant to the over-allotment option, or
$1,920,000. The deferred fee will become payable to the
representative 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.
Merger Agreement
On March 16, 2021, the Company entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with eToro Group Ltd., a company
organized under the laws of the British Virgin Islands (“eToro”),
Buttonwood Merger Sub Corp., a Delaware corporation and a direct,
wholly-owned subsidiary of eToro (“Merger Sub”), and the Company,
which provides for, among other things, the merger of Merger Sub
with and into the Company (the “Merger”), with the Company
surviving as a wholly-owned subsidiary of eToro (the “Business
Combination”). At the closing of the Business Combination and the
effective time of the Merger (the “Effective Time”), the
stockholders of the Company will receive certain of the common
stock, no par value, of eToro (“eToro Common Stock”), and eToro
will list as a publicly traded company on Nasdaq and will continue
to conduct the social trading platform business conducted by eToro
prior to the Business Combination.
The Merger Agreement contains customary representations, warranties
and covenants by the parties thereto and the closing is subject to
certain conditions as further described in the Merger
Agreement.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Note 7 — Stockholders’ Equity
Preferred Stock — On December 4, 2020, the
Company filed its amended and restated certificate of
incorporation, pursuant to which it is authorized to issue
1,000,000 shares of preferred stock with a par value of $0.0001 per
share with such designations, rights and preferences as may be
determined from time to time by the Company’s Board of Directors.
At March 31, 2022 and December 31, 2021, there were no shares of
preferred stock issued or outstanding.
Class A Common Stock — On December 4, 2020,
the Company filed its amended and restated certificate of
incorporation, pursuant to which it is authorized to issue
100,000,000 shares of Class A common stock with a par value of
$0.0001 per share. Holders of Class A common stock are
entitled to one vote for each share. At March 31, 2022 and December
30, 2021, there were 640,000 shares of Class A common stock
issued and outstanding, excluding 25,000,000 shares of Class A
common stock subject to possible redemption which are accounted for
as temporary equity.
Class B Common Stock — On December 4, 2020,
the Company filed its amended and restated certification of
incorporation, pursuant to which it is authorized to issue
10,000,000 shares of Class B common stock with a par value of
$0.0001 per share. Holders of the Company’s Class B common
stock are entitled to one vote for each share. At March 31, 2022
and December 31, 2021, there were 8,546,667 shares of Class B
common stock issued and outstanding.
Holders of Class B common stock will vote on the election of
directors prior to the consummation of a Business Combination.
Holders of Class A common stock and Class B common stock
will vote together as a single class on all other matters submitted
to a vote of stockholders except as required by law.
The shares of Class B common stock will automatically convert
into shares of Class A common stock at the time of a Business
Combination on a one-for-one basis, subject to adjustment. In the
case that additional shares of Class A common stock or
equity-linked securities are issued or deemed issued in excess of
the amounts offered in the Initial Public Offering and related to
the closing of a Business Combination, the ratio at which shares of
Class B common stock shall convert into shares of Class A
common stock will be adjusted (unless the holders of a majority of
the outstanding shares of Class B common stock agree to waive
such adjustment with respect to any such issuance or deemed
issuance) so that the number of shares of Class A common stock
issuable upon conversion of all shares of Class B common stock
will equal, in the aggregate, on an as-converted basis, 25% of the
sum of the total number of all shares of common stock issued and
outstanding upon completion of the Initial Public Offering,
including Private Placement Shares, plus all shares of Class A
common stock and equity-linked securities issued or deemed issued
in connection with a Business Combination (excluding any shares or
equity-linked securities issued, or to be issued, to any seller in
a Business Combination). Holders of Founder Shares may also elect
to convert their shares of Class B common stock into an equal
number of shares of Class A common stock, subject to
adjustment as provided above, at any time.
Note 8 – Warrant Liabilities
Warrants — Public Warrants may only be exercised
for a whole number of shares. No fractional shares will be issued
upon exercise of the Public Warrants. The Public Warrants will
become exercisable on the later of (a) 30 days after the
completion of a Business Combination or (b) 12 months from the
closing of the Initial Public Offering; provided in each case that
the Company has an effective registration statement under the
Securities Act covering the shares of common stock issuable upon
exercise of the Public Warrants and a current prospectus relating
to them is available. At March 31, 2022 and December 31, 2021,
there were 8,546,667 warrants outstanding (8,333,334 Public
Warrants and 213,333 Private Placement Warrants).
The Company will not be obligated to deliver any Class A
common stock pursuant to the exercise of a Public Warrant and will
have no obligation to settle such Public Warrant exercise unless a
registration statement under the Securities Act with respect to the
shares of Class A common stock underlying the Public Warrants
is then effective and a current prospectus relating thereto is
available, subject to the Company satisfying its obligations with
respect to registration. No Public Warrant will be exercisable for
cash or on a cashless basis, and the Company will not be obligated
to issue any shares to holders seeking to exercise their Public
Warrants, unless the issuance of the shares upon such exercise is
registered, qualified or deemed exempt under the securities laws of
the state of the exercising holder.
The Company has agreed that as soon as practicable, but in no event
later than 20 business days, after the closing of a Business
Combination, it will use its best efforts to file with the SEC a
registration statement covering the issuance, under the Securities
Act, of the Class A common stock issuable upon exercise of the
Public Warrants. The Company will use its best efforts to cause the
same to become effective within 60 business days after the closing
of the Business Combination and to maintain the effectiveness of
such registration statement, and a current prospectus relating
thereto, until the expiration of the Public Warrants in accordance
with the provisions of the warrant agreement. Notwithstanding the
above, if the Class A common stock are, at the time of any
exercise of a Public Warrant, not listed on a national securities
exchange such that they satisfy the definition of a “covered
security” under Section 18(b)(1) of the Securities Act, the
Company may, at its option, require holders of Public Warrants who
exercise their Public Warrants to do so on a “cashless basis” in
accordance with Section 3(a)(9) of the Securities Act and, in
the event the Company so elects, the Company will not be required
to file or maintain in effect a registration statement, but will
use its best efforts to qualify the shares under applicable blue
sky laws to the extent an exemption is not available.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Redemption of warrants for Cash. Once the Public Warrants
become exercisable, the Company may redeem the Public Warrants:
|
● |
in
whole and not in part; |
|
|
|
|
● |
at a
price of $0.01 per warrant; |
|
|
|
|
● |
upon
not less than 30 days’ prior written notice of redemption to
each warrant holder; and |
|
|
|
|
● |
if,
and only if, the reported last sale price of the Company’s
Class A common stock equals or exceeds $18.00 per share (as
adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within a
30-trading day period ending three business days prior to the date
on which the Company sends the notice of redemption to the warrant
holders. |
If and when the warrants become redeemable by the Company, the
Company may exercise its redemption right even if it is unable to
register or qualify the underlying securities for sale under all
applicable state securities laws.
If the Company calls the Public Warrants for redemption for cash,
management will have the option to require all holders that wish to
exercise the Public Warrants to do so on a “cashless basis,” as
described in the warrant agreement. The exercise price and number
of shares of Class A common stock issuable upon exercise of
the warrants may be adjusted in certain circumstances including in
the event of a stock dividend, or recapitalization, reorganization,
merger or consolidation. Additionally, in no event will the Company
be required to net cash settle the warrants.
In addition, if (x) the Company issues additional Class A
common stock or equity-linked securities for capital raising
purposes in connection with the closing of a Business Combination
at an issue price or effective issue price of less than $9.20 per
Class A common stock (with such issue price or effective issue
price to be determined in good faith by the Company and, in the
case of any such issuance to the Sponsor or its affiliates, without
taking into account any Founder Shares held by the initial
stockholders or such affiliates, as applicable, prior to such
issuance) (the “Newly Issued Price”), (y) the aggregate gross
proceeds from such issuances represent more than 50% of the total
equity proceeds, and interest thereon, available for the funding of
a Business Combination on the date of the consummation of a
Business Combination (net of redemptions), and (z) the volume
weighted average trading price of its Class A common stock
during the 20 trading day period starting on the trading day prior
to the day on which the Company consummates its Business
Combination (such price, the “Market Value”) is below $9.20 per
share, the exercise price of the warrants will be adjusted (to the
nearest cent) to be equal to 115% of the higher of the Market Value
and the Newly Issued Price, and the $18.00 per share redemption
trigger price will be adjusted (to the nearest cent) to be equal to
180% of the higher of the Market Value and the Newly Issued
Price.
The Private Placement Warrants are identical to the Public Warrants
underlying the Units sold in the Initial Public Offering, except
that the Private Placement Warrants and the Class A common
stock issuable upon the exercise of the Private Placement Warrants
will not be transferable, assignable or salable until 30 days
after the completion of a Business Combination, subject to certain
limited exceptions. Additionally, the Private Placement Warrants
will be non-redeemable so long as they are held by the Sponsor or
its permitted transferees. If the Private Placement Warrants are
held by someone other than the Sponsor or its permitted
transferees, the Private Placement Warrants will be redeemable by
the Company and exercisable by such holders on the same basis as
the Public Warrants.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Note 9 — Fair Value Measurements
At March 31, 2022 and December 31, 2021, assets held in the Trust
Account were comprised of $250,030,644 and $250,008,357,
respectively, in money market funds which are invested primarily in
U.S. Treasury securities.
The Company classifies its U.S. Treasury and equivalent securities
as held-to-maturity in accordance with ASC Topic 320 “Investments -
Debt and Equity Securities.” Held-to-maturity securities are those
securities which the Company has the ability and intent to hold
until maturity. Held-to-maturity treasury securities are recorded
at amortized cost on the accompanying condensed balance sheets and
adjusted for the amortization or accretion of premiums or
discounts.
The fair value of the Company’s assets and liabilities that are
re-measured and reported at fair value at each reporting period,
and non-financial assets and liabilities that are re-measured and
reported at fair value at least annually are reported under ASC
Topic 820, “Fair Value Measurement.”
The fair value of the Company’s financial assets and liabilities
reflects management’s estimate of amounts that the Company would
have received in connection with the sale of the assets or paid in
connection with the transfer of the liabilities in an orderly
transaction between market participants at the measurement date. In
connection with measuring the fair value of its assets and
liabilities, the Company seeks to maximize the use of observable
inputs (market data obtained from independent sources) and to
minimize the use of unobservable inputs (internal assumptions about
how market participants would price assets and liabilities). The
following fair value hierarchy is used to classify assets and
liabilities based on the observable inputs and unobservable inputs
used in order to value the assets and liabilities:
Level
1: |
Quoted
prices in active markets for identical assets or liabilities. An
active market for an asset or liability is a market in which
transactions for the asset or liability occur with sufficient
frequency and volume to provide pricing information on an ongoing
basis. |
Level
2: |
Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs
include quoted prices in active markets for similar assets or
liabilities and quoted prices for identical assets or liabilities
in markets that are not active. |
Level
3: |
Unobservable
inputs based on the Company’s assessment of the assumptions that
market participants would use in pricing the asset or
liability. |
The following table presents information about the Company’s assets
and liabilities that are measured at fair value on a recurring
basis at March 31, 2022 and December 31, 2021 and indicates the
fair value hierarchy of the valuation inputs the Company utilized
to determine such fair value:
Description |
|
Level |
|
March 31,
2022
|
|
|
December 31,
2021
|
|
Assets: |
|
|
|
|
|
|
|
|
Marketable securities held in Trust Account – U.S. Treasury
Securities Money Market Fund |
|
1 |
|
$ |
250,030,644 |
|
|
$ |
250,008,357 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
Warrant liabilities – Public
Warrants |
|
1 |
|
$ |
7,916,667 |
|
|
$ |
12,250,001 |
|
Warrant liabilities – Private
Placement Warrants |
|
3 |
|
$ |
450,133 |
|
|
$ |
541,866 |
|
The Warrants were accounted for as liabilities in accordance with
ASC 815-40 and are presented within warrant liabilities on the
Company’s condensed balance sheets. The warrant liabilities are
measured at fair value at inception and on a recurring basis, with
changes in fair value presented within change in fair value of
warrant liabilities in the condensed statements of operations.
The Private Placement Warrants were valued using a Modified Black
Scholes Option Pricing Model. The Private Placement Warrants are
considered to be a Level 3 fair value measurement due to the use of
unobservable inputs. The Modified Black Scholes Option Pricing
Model’s primary unobservable input utilized in determining the fair
value of the Private Placement Warrants is the expected volatility
of the common stock as well as the probability of consummation of a
Business Combination. The probability assigned to the consummation
of the Business Combination was 90% as of March 31, 2022 and
December 31, 2021, respectively, which was determined based on the
observed success rates of business combinations for special purpose
acquisition companies. The expected volatility as of the Initial
Public Offering date was derived from observable public warrant
pricing on comparable ‘blank-check’ companies without an identified
target. The expected volatility as of subsequent valuation dates
will be implied from the Company’s own public warrant pricing. A
Monte Carlo simulation methodology was used in estimating the fair
value of the Public Warrants for periods where no observable traded
price was available, using the same expected volatility as was used
in measuring the fair value of the Private Placement Warrants. For
periods subsequent to the detachment of the warrants from the
Units, including March 31, 2022, the closing price of the Public
Warrants was used as the fair value as of each relevant date.
FINTECH ACQUISITION CORP. V
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
The key inputs into the model for the Private Placement Warrants
were as follows at March 31, 2022 and December 31, 2021:
Input |
|
March 31,
2022
|
|
|
December 31,
2021
|
|
Stock price |
|
$ |
9.87 |
|
|
$ |
9.92 |
|
Strike price |
|
$ |
11.50 |
|
|
$ |
11.50 |
|
Term (in years) |
|
|
5.3 |
|
|
|
5.3 |
|
Volatility |
|
|
27.5 |
% |
|
|
35.0 |
% |
Risk-free rate |
|
|
2.4 |
% |
|
|
1.3 |
% |
Dividend yield |
|
|
0.0 |
% |
|
|
0.0 |
% |
The following table presents the changes in the fair value of Level
3 warrant liabilities for the three months ended March 31,
2022:
|
|
Placement |
|
Fair value of derivative warrant liabilities
as of December 31, 2021 |
|
$ |
541,866 |
|
Change in fair
value of derivative warrant liabilities |
|
|
(91,733 |
) |
Fair value of
derivative warrant liabilities as of March 31, 2022 |
|
$ |
450,133 |
|
The following table presents the changes in the fair value of
warrant liabilities for the three months ended March 31, 2021:
|
|
Placement |
|
|
Public |
|
|
Warrant Liabilities |
|
Fair value of derivative warrant liabilities
as of December 31, 2020 |
|
$ |
471,466 |
|
|
$ |
16,833,335 |
|
|
$ |
17,304,801 |
|
Change in fair
value of derivative warrant liabilities |
|
|
256,000 |
|
|
|
3,166,667 |
|
|
|
3,422,667 |
|
Fair value of derivative warrant
liabilities as of March 31, 2021 |
|
$ |
727,466 |
|
|
$ |
20,000,002 |
|
|
$ |
20,727,468 |
|
Transfers to/from Levels 1, 2 and 3 are recognized at the end of
the reporting period. There were no transfers between levels for
the three months ended March 31, 2022 and 2021 other than the
transfer of the Public Warrants from Level 3 to Level 1 following
the detachment of the Public Warrants from the Units on January 25,
2021.
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions that
occurred after the condensed balance sheet date up to the date that
the condensed financial statements were issued. Based upon this
review, the Company did not identify any subsequent events that
would have required adjustment or disclosure in the condensed
financial statements.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
References in this report (this “Quarterly Report”) to “we,”
“us” or the “Company” refer to FinTech Acquisition Corp. V.
References to our “management” or our “management team” refer to
our officers and certain of our directors. References to our
“sponsor” refer collectively to FinTech Investor Holdings V, LLC, a
Delaware limited liability company, and FinTech Masala Advisors V,
LLC, a Delaware limited liability company. The manager
of each entity is Cohen Sponsor Interests V, LLC, a Delaware
limited liability company. 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 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 as a Delaware corporation
and formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, recapitalization,
reorganization or similar business combination with one or more
target businesses. We intend to complete our business combination
using cash from the proceeds of the initial public offering and the
sale of the private placement units that occurred simultaneously
with the completion of the initial public offering, our capital
stock, debt or a combination of cash, stock 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 March 16, 2021, we entered into an Agreement and Plan of Merger
(the “Merger Agreement”) with eToro Group Ltd., a company organized
under the laws of the British Virgin Islands (“eToro”), Buttonwood
Merger Sub Corp., a Delaware corporation and a direct, wholly-owned
subsidiary of eToro (“Merger Sub”), and the Company, which provides
for, among other things, the merger of Merger Sub with and into the
Company (the “Merger”), with the Company surviving as a
wholly-owned subsidiary of eToro (the “Business Combination”). At
the closing of the Business Combination and the effective time of
the Merger (the “Effective Time”), the stockholders of the Company
will receive certain of the common stock, no par value, of eToro
(“eToro Common Stock”), and eToro will list as a publicly traded
company on Nasdaq and will continue to conduct the social trading
platform business conducted by eToro prior to the Business
Combination.
The Merger Agreement contains customary representations, warranties
and covenants by the parties thereto and the closing is subject to
certain conditions as further described in the Merger
Agreement.
Results of Operations
We have neither engaged in any operations (other than searching for
a Business Combination after our Initial Public Offering) nor
generated any revenues to date. Our only activities from inception
to March 31, 2022 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 described
above. We do not expect to generate any operating revenues until
after the completion of our Business Combination at the earliest.
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, 2022, we had net income of
$3,954,217, which consists of the interest earned on marketable
securities held in the Trust Account of $22,287 and change in the
fair value of warrant liabilities of $4,425,067, partially offset
by operating expenses of $493,137.
For the three months ended March 31, 2021, we had a net loss of
$4,963,910, which consists of the operating expenses of $1,547,408
and a change in the fair value of warrant liabilities of
$3,422,667, partially offset by interest earned on marketable
securities held in the Trust Account of $6,165.
Liquidity and Capital Resources
On December 8, 2020, we consummated the Initial Public Offering of
25,000,000 units (the “Units” and, with respect to the Class A
common stock included in the Units sold, the “Public Shares”),
which includes the partial exercise by the underwriters of their
over-allotment option in the amount of 3,200,000 Units, at $10.00
per Unit, generating gross proceeds of
$250,000,000.
Simultaneously with the closing of the Initial Public Offering, we
consummated the sale of 640,000 units (the “Private Placement
Units”) at a price of $10.00 per Private Placement Unit in a
private placement to FinTech Investor Holdings V, LLC, generating
gross proceeds of $6,400,000.
Transaction costs amounted to $15,461,590, consisting of $4,360,000
in cash underwriting fees, $10,640,000 of deferred underwriting
fees and $461,590 of other offering costs.
For the three months ended March 31, 2022, net cash used in
operating activities was $546,228. Net income of $3,954,217 was
affected by interest earned on marketable securities held in the
Trust Account of $22,287 and a change in fair value of warrant
liabilities of $4,425,067. Changes in operating assets and
liabilities used $53,091 of cash from operating activities.
For the three months ended March 31, 2021, net cash used in
operating activities was $316,871. Net loss of $4,963,910 was
affected by interest earned on marketable securities held in the
Trust Account of $6,165 and a change in fair value of warrant
liabilities of $3,422,667. Changes in operating assets and
liabilities provided $1,230,537 of cash from operating
activities.
At March 31, 2022, we had investments held in the Trust Account of
$250,030,644. We intend to use substantially all of the funds held
in the Trust Account, including any amounts representing interest
earned on the Trust Account to complete our Business Combination.
We may withdraw interest to pay taxes. For the three months ended
March 31, 2022, we did not withdraw any interest income from the
Trust Account. To the extent that our capital stock 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 target business or businesses, make other acquisitions and
pursue our growth strategies.
At March 31, 2022, we had cash of $339,814 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. If such funds
are insufficient to repay the Working Capital Loans, the unpaid
amounts would be forgiven. The Working Capital Loans may be
converted into units at a price of $10.00 per unit at the option of
the lender. The units would be identical to the Private Placement
Units. At March 31, 2022 and December 31, 2021, $1,150,000 and
$300,000 of Working Capital Loans were outstanding, respectively.
As of October 26, 2021, the Company amended the Working Capital
Loans to remove the conversion feature.
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 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. If the Company is unable to raise
additional capital, it may be required to take additional measures
to conserve liquidity, which could include, but not necessarily be
limited to, curtailing operations, suspending the pursuit of a
potential transaction, and reducing overhead expenses. The Company
cannot provide any assurance that new financing will be available
to it on commercially acceptable terms, if at all. These conditions
raise substantial doubt about the Company’s ability to continue as
a going concern through one year from the date of these financial
statements if a Business Combination is not consummated. These
financial statements do not include any adjustments relating to the
recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to
continue as a going concern.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be
considered off-balance sheet arrangements as of March 31, 2022. 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 $20,000 for office space, administrative and shared
personnel support services. We began incurring these fees on
December 4, 2020 and will continue to incur these fees monthly
until the earlier of the completion of the business combination or
the Company’s liquidation.
Pursuant to a registration rights agreement entered into on
December 3, 2020, the holders of the Founder Shares, Private
Placement Units (including securities contained therein) and
warrants that may be issued upon conversion of Working Capital
Loans (and any 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 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 common stock). The holders of a
majority 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.
Cantor Fitzgerald & Co., as representative of the several
underwriters, is entitled to a deferred fee of $10,640,000. The
deferred fee will become payable to the representative 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
We do not use derivative instruments to hedge exposures to cash
flow, market, or foreign currency risks. We evaluate all of our
financial instruments, including issued stock purchase warrants, to
determine if such instruments are derivatives or contain features
that qualify as embedded derivatives, pursuant to Accounting
Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity” and ASC 815. We account for the Warrants
in accordance with the guidance contained in ASC 815-40 under which
the Warrants do not meet the criteria for equity treatment and must
be recorded as liabilities. Accordingly, we classify the Warrants
as liabilities at their fair value and adjust them to fair value at
each reporting period. This liability is subject to re-measurement
at each balance sheet date until exercised, and any change in fair
value is recognized in our statements of operations. The Warrants
for periods where no observable trading price was available are
valued using a Modified Black-Scholes Option Pricing model for the
Private Placement Warrants and a Monte Carlo simulation methodology
for the Public Warrants. For periods subsequent to the detachment
of the Public Warrants from the Units, the Public Warrant quoted
market price was used as the fair value as of each relevant
date.
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 is classified as a liability
instrument and is measured at fair value. Conditionally redeemable
common stock (including common stock that features 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, common stock is classified as stockholders’ equity. Our
Class A common stock features certain redemption rights that are
considered to be outside of our control and subject to occurrence
of uncertain future events. Accordingly, Class A common stock
subject to possible redemption is presented as temporary equity,
outside of the stockholders’ deficit section of our balance
sheets. Under ASC 480-10-S99, the Company has elected to
recognize changes in the redemption value immediately as they occur
and adjust the carrying value of the security to equal the
redemption value at the end of each reporting period. This method
would view the end of the reporting period as if it were also the
redemption date for the security.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net
income (loss) by the weighted average number of shares of common
stock outstanding for the period. The Company applies the two-class
method in calculating earnings per share. Accretion associated with
the redeemable shares of Class A common stock is excluded from
earnings per share as the redemption value approximates fair
value.
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 other recently issued, but not
yet effective, accounting standards, if currently adopted, would
have a material effect on our unaudited condensed financial
statements.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET
RISK
We are a smaller reporting company as defined by Rule 12b-2 of the
Exchange Act and are not required to provide the information
otherwise required under this item.
ITEM
4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to
be disclosed in our reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is accumulated
and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer or persons performing similar
functions, as appropriate, to allow timely decisions regarding
required disclosure.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer,
we conducted an evaluation of the effectiveness of our disclosure
controls and procedures as of the end of the three months ended
March 31, 2022, as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act. Based on this evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that
our disclosure controls and procedures were not effective, due
solely to the material weakness in our internal control over
financial reporting related to the company’s accounting for complex
financial instruments. In light of this material weakness, we
performed additional analysis as deemed necessary to ensure that
our financial statements were prepared in accordance with GAAP.
Notwithstanding the material weakness, management has concluded
that the financial statements included elsewhere in this Quarterly
Report present fairly, in all material respects, our financial
position, results of operations and cash flows in conformity with
GAAP.
Management has implemented remediation steps to improve our
internal control over financial reporting. Specifically, we
expanded and improved our review process for complex securities.
The elements of our remediation plan can only be accomplished over
time, and we can offer no assurance that these initiatives will
ultimately have the intended effects.
Changes in Internal Control Over Financial Reporting
Other than the matters described above, there were no changes in
our internal control over financial reporting that occurred during
the period covered by this Quarterly Report that have materially
affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
Factors that could cause our actual results to differ materially
from those in this Quarterly Report are any of the risks described
in our Annual Report on Form 10-K for the year ended December 31,
2021 as filed with the SEC on February 18, 2022. Any of these
factors could result in a significant or material adverse effect on
our results of operations or financial condition. Additional risk
factors not presently known to us or that we currently deem
immaterial may also impair our business or results of operations.
As of the date of this Quarterly Report, other than as set forth
below, there have been no material changes to the risk factors
disclosed in our Annual Report on Form 10-K for the year ended
December 31, 2021 as filed with the SEC on February 18, 2022.
Changes in laws or regulations or how such laws or regulations
are interpreted or applied, or a failure to comply with any laws or
regulations, may adversely affect our business, including our
ability to negotiate and complete our initial business combination,
and results of operations.
We are subject to laws and regulations enacted by national,
regional and local governments. We will be required to comply with
certain SEC and other legal requirements. Compliance with, and
monitoring of, applicable laws and regulations may be difficult,
time consuming and costly. Those laws and regulations and their
interpretation and application may also change from time to time
and those changes could have a material adverse effect on our
business, investments and results of operations. In addition, a
failure to comply with applicable laws or regulations, as
interpreted and applied, could have a material adverse effect on
our business, including our ability to negotiate and complete our
initial business combination and results of operations.
On March 30, 2022, the SEC issued proposed rules relating to, among
other items, disclosures in business combination transactions
involving SPACs (defined below) and private operating companies;
the financial statement requirements applicable to transactions
involving shell companies; the use of projections in SEC filings in
connection with proposed business combination transactions; the
potential liability of certain participants in proposed business
combination transactions; and the extent to which special purpose
acquisition companies (“SPACs”) could become subject to regulation
under the Investment Company Act, including a proposed rule that
would provide SPACs a safe harbor from treatment as an investment
company if they satisfy certain conditions that limit a SPAC’s
duration, asset composition, business purpose and activities. These
rules, if adopted, whether in the form proposed or in a revised
form, may increase the costs of and the time needed to negotiate
and complete an initial business combination, and may constrain the
circumstances under which we could complete an initial business
combination.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS FROM
REGISTERED SECURITES.
On December 8, 2020, we consummated our Initial Public Offering of
25,000,000 Units. The units sold in our initial public offering
were sold at a price of $10.00 per unit, generating gross proceeds
of $250,000,000. Each unit consists of one share of our Class A
common stock and one third of one warrant, where each whole warrant
entitles the holder to purchase one share of Class A common stock
at an exercise price of $11.50 per share, subject to adjustment.
Cantor Fitzgerald (as representative of the underwriters) and
Northland Capital Market served as the underwriters for the initial
public offering. The units sold in the initial public offering were
registered under the Securities Act on a registration statement on
Form S-1 (No. 333-249646), which was declared effective by the SEC
on December 3, 2020.
Simultaneously with the consummation of the initial public
offering, we consummated a private placement of 640,000 Private
Placement Units to FinTech Investor Holdings V, LLC at a price of
$10.00 per Private Placement Unit, generating total proceeds of
$6,400,000. Such securities were issued pursuant to the exemption
from registration contained in Section 4(a)(2) of the Securities
Act. Each Private Placement Unit consists of one share of Class A
common stock and one third of a Private Placement Warrant.
The Private Placement Warrants are identical to the warrants
included in the units issued in the initial public offering, except
that, if held by the sponsor or its permitted transferees, (a) they
are not redeemable by the Company, (b) they (including the
underlying Class A common stock) may not be transferred, assigned
or sold until 30 days after the consummation of the Company’s
initial business combination, subject to certain limited
exceptions, and (c) they may be exercised on a cashless basis.
Of the gross proceeds received from the Initial Public Offering and
private placement, an amount of $250,000,000 ($10.00 per unit) was
placed in the Trust Account.
We incurred a total of $15,461,590 in transaction costs related to
the initial public offering. We paid a total of $4,360,000 in
underwriting discounts and commissions and approximately $461,590
in other costs and expenses related to the initial public offering.
In addition, the underwriters agreed to defer $10,640,000 in
underwriting discounts and commissions (which is currently held in
the Trust Account), which will be payable only upon consummation of
an initial business combination.
For a description of the use of the proceeds generated in our
initial public offering, see Part I, Item 2 of this Quarterly
Report.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM
4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM
5. OTHER INFORMATION.
None.
ITEM
6. EXHIBITS.
The following exhibits are filed as part of, or incorporated by
reference into, this Quarterly Report on Form 10-Q.
* |
Filed
herewith. |
** |
Furnished. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
|
FINTECH
ACQUISITION CORP. V |
|
|
|
Date:
May 13, 2022 |
|
/s/
Daniel G. Cohen |
|
Name: |
Daniel
G. Cohen |
|
Title: |
Chief
Executive Officer |
|
|
(Principal
Executive Officer) |
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