MOTION ACQUISITION
CORP.
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
June 30,
2021
|
|
|
December 31,
2020
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
234,160
|
|
|
$
|
878,653
|
|
Prepaid expenses and other current assets
|
|
|
222,896
|
|
|
|
168,877
|
|
Total Current Assets
|
|
|
457,056
|
|
|
|
1,047,530
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account
|
|
|
115,007,460
|
|
|
|
115,020,078
|
|
Total Assets
|
|
$
|
115,464,516
|
|
|
$
|
116,067,608
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
25,052
|
|
|
$
|
11,658
|
|
Franchise tax payable
|
|
|
68,743
|
|
|
|
78,192
|
|
Other accrued liabilities
|
|
|
70,000
|
|
|
|
70,000
|
|
Total Current Liabilities
|
|
|
163,795
|
|
|
|
159,850
|
|
|
|
|
|
|
|
|
|
|
Deferred underwriting commissions in connection with initial public offering
|
|
|
4,025,000
|
|
|
|
4,025,000
|
|
Warrant liabilities
|
|
|
9,486,332
|
|
|
|
9,040,670
|
|
Total Liabilities
|
|
|
13,675,127
|
|
|
|
13,225,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 5)
|
|
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value; 50,000,000 shares authorized; 9,678,938 and 9,784,208 shares subject to possible redemption at $10.00 per share as of June 30, 2021 and December 31, 2020, respectively
|
|
|
96,789,380
|
|
|
|
97,842,080
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding
|
|
|
-
|
|
|
|
-
|
|
Class A common stock, $0.0001 par value; 50,000,000 shares authorized; 1,821,062 and 1,715,792 shares issued and outstanding (excluding 9,678,938 and 9,784,208 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively
|
|
|
182
|
|
|
|
172
|
|
Class B common stock, $0.0001 par value; 12,500,000 shares authorized; 2,875,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020
|
|
|
288
|
|
|
|
288
|
|
Additional paid-in capital
|
|
|
10,275,771
|
|
|
|
9,223,081
|
|
Accumulated deficit
|
|
|
(5,276,232
|
)
|
|
|
(4,223,533
|
)
|
Total Stockholders’ Equity
|
|
|
5,000,009
|
|
|
|
5,000,008
|
|
Total Liabilities and Stockholders’ Equity
|
|
$
|
115,464,516
|
|
|
$
|
116,067,608
|
|
The accompanying notes
are an integral part of these condensed consolidated financial statements.
MOTION ACQUISITION
CORP.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Three
Months Ended
June 30,
2021
|
|
|
Six Months Ended
June 30,
2021
|
|
General and administrative expenses
|
|
$
|
245,345
|
|
|
$
|
628,161
|
|
Loss from operations
|
|
|
(245,345
|
)
|
|
|
(628,161
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest earned on investments held in Trust Account
|
|
|
4,110
|
|
|
|
21,124
|
|
Change in fair value of warrant liabilities
|
|
|
(2,801,332
|
)
|
|
|
(445,662
|
)
|
Total other income (expense)
|
|
|
(2,797,222
|
)
|
|
|
(424,538
|
)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,042,567
|
)
|
|
$
|
(1,052,699
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of Class A common shares outstanding, basic and diluted
|
|
|
11,500,000
|
|
|
|
11,500,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per Class A common share
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of Class B common shares outstanding, basic and diluted
|
|
|
2,875,000
|
|
|
|
2,875,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per Class B common share
|
|
$
|
(1.06
|
)
|
|
$
|
(0.37
|
)
|
The accompanying notes
are an integral part of these unaudited condensed consolidated financial statements.
MOTION ACQUISITION
CORP.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Three and Six
Months Ended June 30, 2021
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Paid-In
|
|
|
Accumulated
|
|
|
Stockholders ’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance – December 31, 2020
|
|
|
1,715,792
|
|
|
$
|
172
|
|
|
|
2,875,000
|
|
|
$
|
288
|
|
|
$
|
9,223,081
|
|
|
$
|
(4,223,533
|
)
|
|
$
|
5,000,008
|
|
Class A common shares subject to possible redemption
|
|
|
(198,987
|
)
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,989,850
|
)
|
|
|
|
|
|
|
(1,989,870
|
)
|
Net income
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,989,868
|
|
|
|
1,989,868
|
|
Balance – March 31, 2021
|
|
|
1,516,805
|
|
|
|
152
|
|
|
|
2,875,000
|
|
|
|
288
|
|
|
|
7,233,231
|
|
|
|
(2,233,665
|
)
|
|
|
5,000,006
|
|
Class A common shares subject to possible redemption
|
|
|
304,257
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
3,042,540
|
|
|
|
|
|
|
|
3,042,570
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,042,567
|
)
|
|
|
(3,042,567
|
)
|
Balance – June 30, 2021
|
|
|
1,821,062
|
|
|
$
|
182
|
|
|
|
2,875,000
|
|
|
$
|
288
|
|
|
$
|
10,275,771
|
|
|
$
|
(5,276,232
|
)
|
|
$
|
5,000,009
|
|
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
MOTION ACQUISITION
CORP.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months
Ended June 30, 2021
Cash flows from operating activities:
|
|
|
|
Net loss
|
|
$
|
(1,052,699
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
Interest earned on investments held in Trust Account
|
|
|
(21,124
|
)
|
Change in fair value of warrant liabilities
|
|
|
445,662
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Prepaid expenses
|
|
|
(53,719
|
)
|
Other current assets
|
|
|
(300
|
)
|
Accounts payable
|
|
|
13,394
|
|
Franchise taxes payable
|
|
|
(9,449
|
)
|
Net cash used in operating activities
|
|
|
(678,235
|
)
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Interest released from Trust Account
|
|
|
33,742
|
|
Net cash provided by investing activities
|
|
|
33,742
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
(644,193
|
)
|
|
|
|
|
|
Cash - beginning of the period
|
|
|
878,653
|
|
Cash - end of the period
|
|
$
|
234,160
|
|
|
|
|
|
|
Supplemental disclosure of noncash activities:
|
|
|
|
|
Change in value of Class A common shares subject to possible redemption
|
|
$
|
(1,052,700
|
)
|
The accompanying notes
are an integral part of these unaudited condensed consolidated financial statements.
MOTION ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Description of Organization
and Business Operations
Organization and General
Motion Acquisition Corp. (the “Company”)
was incorporated as a Delaware corporation on August 11, 2020. The Company was formed for the purpose of entering into a merger, share
exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses
or entities. The Company is not limited to a particular industry or geographic region for purposes of consummating a business combination.
The Company has neither engaged in any operations nor generated revenue to date.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of its initial public offering of units (the “Initial Public Offering”),
although substantially all of the net proceeds of the Initial Public Offering are intended to be generally applied toward completing a
business combination. Furthermore, there is no assurance that the Company will be able to successfully complete a business combination.
Sponsor and Financing
The Company’s sponsor is Motion Acquisition
LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial
Public Offering was declared effective on October 14, 2020. On October 19, 2020, the Company consummated its Initial Public
Offering of 11,500,000 units (the “Units” and, with respect to the Class A common stock included in the Units,
the “Public Shares” and with respect to the warrants included in the Units, the “Public Warrants”) at $10.00 per
Unit, generating gross proceeds of $115.0 million, and incurring offering costs of approximately $6.7 million, inclusive of
$4.0 million in deferred underwriting commissions (Note 3).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of 2,533,333 warrants (each,
a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private
Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $3.8 million (Note 4).
Trust Account
Upon the closing of the Initial Public Offering and
the Private Placement, $115.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and
Private Placement Warrants in the Private Placement were placed in a trust account (“Trust Account”) located in
the United States with Continental Stock Transfer & Trust Company acting as trustee. The proceeds held in the Trust Account are invested
only in 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 in money market funds meeting certain conditions under the Investment Company Act, which invest only
in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a business combination
and (ii) the distribution of the Trust Account as described below.
Pursuant to stock exchange listing rules, the
Company must complete an initial business combination with one or more target businesses that together have an aggregate fair market value
of at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes
payable on the income earned on the Trust Account) at the time of the agreement to enter into the initial business combination. However,
the Company will only complete a business combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required
to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
The Company’s amended and restated certificate
of incorporation provides that, other than the withdrawal of interest earned on the funds that may be released to the Company to pay taxes,
none of the funds held in the Trust Account will be released until the earliest of: (i) the completion of the business combination; (ii)
the redemption of any of Public Shares to its holders (the “Public Stockholders”) properly tendered in connection with a stockholder
vote to amend certain provisions of the Company’s amended and restated certificate of incorporation prior to an initial business
combination and (iii) the redemption of 100% of the Public Shares if the Company does not complete a business combination within 24 months
from the closing of the Initial Public Offering (such 24 month period, the “Combination Period”).
Proposed Business Combination
On March 8, 2021, the Company entered into a merger
agreement (the “Merger Agreement”) with Ambulnz, Inc. dba DocGo (“DocGo”) pursuant to which DocGo would merge
with a newly incorporated subsidiary (“Merger Sub”) of the Company (the “Merger”), with DocGo being the surviving
entity of the Merger and becoming a wholly-owned subsidiary of the Company. The Merger is expected to be consummated following the receipt
of required approval by the stockholders of the Company and DocGo, required regulatory approvals, and the fulfillment of other conditions.
Upon consummation of the Merger, DocGo stockholders
will receive 83,600,000 shares of the Company’s Class A common stock as consideration and up to 5,000,000 additional shares of the
Company’s Class A common stock as earn-out consideration issuable in the future upon attainment of certain specified stock price
conditions. In addition, substantially concurrently with, and contingent upon, the consummation of the Merger, 12,500,000 shares of the
Company’s Class A common stock will be purchased at a price of $10.00 per share by certain third-party investors (collectively,
the “PIPE Investors”), for a total aggregate purchase price of $125,000,000 (the “PIPE Investment”). After giving
effect to placement agents’ fees in the aggregate amount of $4,375,000, the net proceeds of the PIPE Investment of $120,625,000,
together with the amounts remaining in the Company’s trust account, will be retained by DocGo upon the consummation of the Merger.
Liquidity and Capital Resources
The accompanying unaudited condensed consolidated
financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things,
the realization of assets and satisfaction of liabilities in the normal course of business. As of June 30, 2021, the Company had
approximately $234,000 of cash in its operating account and approximately $293,000 of working capital.
Until the time of the
Company’s Initial Public Offering on October 19, 2020, the Company’s liquidity needs were satisfied through a payment of $25,000
from the Company’s Chief Executive Officer to fund certain offering costs in exchange for the issuance of the Founder Shares
(as defined below) to the Sponsor, and advances to the Company from the Sponsor of approximately $71,000 under a related party note payable
(the “Note Payable”) (see Note 4) to pay for other offering costs in connection with the Initial Public Offering. Subsequent
to October 19, 2020 through June 30, 2021, the liquidity needs have been satisfied from the net proceeds of the consummation of the Private
Placement not held in the Trust Account. The Company fully repaid the Note Payable on October 19, 2020. In addition, in order to finance
transaction costs in connection with a business combination, the Company’s officers, directors and initial stockholders may, but
are not obligated to, provide the Company Working Capital Loans (as defined in Note 4). To date, no Working Capital Loans have been made.
Based on the foregoing,
management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier
of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds to pay
existing accounts payable and to consummate our initial business combination.
Note 2 – Basis of Presentation and Significant
Accounting Policies
Basis of Presentation
The accompanying unaudited
condensed consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted
in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly,
they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed consolidated
financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the
balances and results for the period presented. Operating results for the three and six month periods ended June 30, 2021 are not necessarily
indicative of the results that may be expected for the full year ending December 31, 2021.
The accompanying unaudited
condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included
in the Company’s Annual Report on Form 10K/A filed with the SEC on May 28, 2021.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended (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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, 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 an emerging
growth 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 an 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.
Use of Estimates
The preparation of unaudited condensed consolidated
financial statements in conformity with U.S. 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 financial statements and the reported
amounts of revenue 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 unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change
in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these financial
statements is the determination of the fair value of the derivative warrant liabilities. Such estimates may be subject to change as more
current information becomes available. Accordingly, the actual results could differ significantly from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal
depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company
is not exposed to significant risks on such accounts.
Principles of Consolidation
The unaudited condensed consolidated financial
statements include the accounts of the Company and its wholly owned subsidiary, Merger Sub, as of June 30, 2021. Merger Sub had no assets
or liabilities as of June 30, 2021. All significant inter-company transactions and balances have been eliminated in consolidation.
Investments Held in the 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 and generally
have a readily determinable fair value, or a combination thereof. When the Company's investments held in the Trust Account are comprised
of U.S. government securities, the investments are classified as trading securities. When the Company's investments held in the Trust
Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money
market funds are presented on the consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting
from the change in fair value of these securities is included in income on investments held in Trust Account in the accompanying unaudited
condensed consolidated statement of operations. The estimated fair values of investments held in the Trust Account are determined using
available market information.
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 ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded
as liabilities or as equity, is reassessed at the end of each reporting period.
The Company accounts for its 6,366,666 warrants
issued in connection with its Initial Public Offering (3,833,333 Public Warrants) and Private Placement (2,533,333 Private Placement Warrants)
as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities
at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each
balance sheet date until exercised, and any change in fair value is recognized in the Company’s condensed consolidated statement
of operations.
Fair Value of Financial Instruments
Fair value is defined as the price that would
be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement
date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
|
●
|
|
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
|
●
|
|
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
|
●
|
|
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
As of June 30, 2021 and December 31, 2020,
the carrying values of cash, accounts payable, accrued expenses and franchise tax payable approximate their fair values due to the short-term
nature of the instruments. The Company’s investments held in Trust Account are comprised of investments in U.S. Treasury securities
with an original maturity of 185 days or less or investments in money market funds that comprise only U.S. treasury securities and are
recognized at fair value. The fair value of investments held in Trust Account is determined using quoted prices in active markets.
The fair value of Public Warrants and Private
Placement Warrants at December 31, 2020 was determined using a Monte Carlo simulation, and at June 30, 2021 was determined by reference
to the quoted price of the Public Warrants on the Nasdaq Stock Market.
Offering Costs Associated with the Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and
other costs incurred through 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 warrant liabilities were expensed as incurred and presented as non-operating
expenses in the statement of operations. Offering costs associated with the Class A common stock were charged to stockholders’
equity upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities
as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible
redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A
common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of
conditionally redeemable Class A common stock (including Class A common stock that feature redemption rights that are either
within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, shares of Class A common stock are 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 the occurrence of uncertain future events. Accordingly, at June 30, 2021 and December 31, 2020, 9,678,938
and 9,784,208 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’
equity section of the Company’s consolidated condensed balance sheets.
Net Income (Loss) Per Share of Common Stock
Net income (loss) per share of common stock is
computed by dividing net income (loss) applicable to each class of stockholders by the weighted average number of shares of common stock
outstanding during the periods. The calculation of diluted net income (loss) per common stock does not consider the effect of the warrants issued in connection with the
Initial Public Offering and Private Placement since the exercise of the warrants and the conversion of the rights into shares of common
stock is contingent upon the occurrence of future events.
In accordance with FASB ASC 260, “Earnings
Per Share” (“ASC 260”), shares of Class A common stock are treated as participating securities because such shares are
entitled to a pro rata share of trust earnings net of income tax and franchise tax expense, but do not otherwise share in the Company’s
net income or loss. Consequently, net income (loss) per share is calculated using the two-class method prescribed by ASC 260. Pursuant
to this method, net income per share for Class A common stock is calculated by dividing the investment income earned on assets held in
the Trust Account net of income and franchise taxes expense, by the weighted average number of Class A shares outstanding since original
issuance, and net income (loss) per share for Class B common stock is calculated by dividing the net income (loss), adjusted for investment
income allocated to the Class A shares net of taxes, by the weighted average number of Class B shares outstanding during the period. For
all periods presented, franchise tax expense exceeded trust investment income, so no net income was allocable to the Class A common shares.
The following table reflects the calculation of basic
and diluted net income (loss) per share:
|
|
Three Months
Ended
June 30,
2021
|
|
|
Six Months
Ended
June 30,
2021
|
|
Class A common stock
|
|
|
|
|
|
|
Numerator: Income attributable to Class A common stock
|
|
|
|
|
|
|
Investment income earned on marketable securities held in Trust Account
|
|
$
|
4,110
|
|
|
$
|
21,124
|
|
Less applicable Delaware franchise tax expense
|
|
|
(4,110
|
)
|
|
|
(21,124
|
)
|
Investment income attributable to Class A common stock
|
|
$
|
0
|
|
|
$
|
0
|
|
Denominator: Weighted average Class A common shares outstanding
|
|
|
|
|
|
|
|
|
Divided by basic and diluted weighted average shares outstanding, Class A common stock
|
|
|
11,500,000
|
|
|
|
11,500,000
|
|
Basic and diluted net income per share, Class A common Stock
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
Class B common stock
|
|
|
|
|
|
|
|
|
Numerator: Net loss excluding investment income attributable to Class A shares
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,042,567
|
)
|
|
$
|
(1,052,699
|
)
|
Investment income attributable to Class A common stock
|
|
|
0
|
|
|
|
0
|
|
Net loss applicable to Class B common stock
|
|
$
|
(3,042,567
|
)
|
|
$
|
(1,052,699
|
)
|
|
|
|
|
|
|
|
|
|
Denominator: Weighted average Class B common shares outstanding
|
|
|
|
|
|
|
|
|
Divided by basic and diluted weighted average shares outstanding, Class B common stock
|
|
|
2,875,000
|
|
|
|
2,875,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share, Class B common stock
|
|
$
|
(1.06
|
)
|
|
$
|
(0.37
|
)
|
Income Taxes
The Company follows the asset and liability method
of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income during the period that included the
enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
In assessing the realization of deferred tax assets,
management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary
differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income
and taxing strategies in making this assessment. Because the future realization of tax benefits is not considered to be more likely than
not, the Company provided a full valuation allowance for the deferred tax assets at June 30, 2021 and December 31, 2020.
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.
There were no unrecognized tax benefits as of June 30, 2021 or December 31, 2020. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of June
30, 2021 and December 31, 2020. 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 is subject to income tax examinations by major taxing authorities since
inception.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards 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. This 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.
The Company’s 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 accompanying
financial statements.
Note 3 – Initial Public Offering
On October 19, 2020, the Company consummated
its Initial Public Offering of 11,500,000 Units at $10.00 per Unit, generating gross proceeds of $115.0 million,
and incurring offering costs of approximately $6.7 million, inclusive of $4.0 million in deferred underwriting commissions.
Upon the closing of the Initial Public Offering and the Private Placement, $115.0 million ($10.00 per Unit) of the net proceeds of the
sale of the Units in the Initial Public Offering and the Private Placement Warrants in the Private Placement were placed in the Trust
Account.
Each Unit consists of one of the Company’s
shares of Class A common stock, $0.0001 par value, and one-third of one Public Warrant. Each whole Public Warrant entitles the holder
to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment under certain circumstances.
Note 4 – Related Party Transactions
Founder Shares
On August 12, 2020, the Company’s Chief
Executive Officer paid for certain offering costs for an aggregate price of $25,000 in exchange for issuance of 3,737,500 shares
of Class B common stock, par value $0.0001 per share (the “Founder Shares”), issued to the Sponsor. On
October 14, 2020, the Sponsor effected a surrender of 431,250 Founder Shares to the Company for no consideration, resulting in a decrease
in the total number of shares of Class B common stock outstanding from 3,737,500 to 3,306,250. All shares and associated amounts
were retroactively restated to reflect the share surrender. On November 16, 2020, the underwriter advised the Company that it would not
exercise its over-allotment option to purchase additional shares, and consequently 431,250 Founder Shares were forfeited, resulting in
a decrease in the total number of shares of Class B common stock outstanding from 3,306,250 to 2,875,000 such
that the Founder Shares represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering.
The Sponsor has agreed, subject to limited exceptions,
not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of the initial
business combination and (B) subsequent to the initial business combination, (x) if the last reported sale price of the Class A common
stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like)
for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or
(y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction
that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities
or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 2,533,333 Private Placement Warrants at a price of $1.50 per Private Placement
Warrant, generating gross proceeds of $3.8 million in the Private Placement. Each 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. A portion of the proceeds from the
sale of the Private Placement Warrants was added to the net 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 Private Placement Warrants will expire worthless.
The Private Placement Warrants are non-redeemable for cash (subject to certain exceptions) and exercisable on a cashless basis so
long as they are held by the Sponsor or its permitted transferees.
The Private Placement Warrants (and the Class
A common stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after
the completion of the initial business combination (subject to certain exceptions).
Related Party Loans
On August 18, 2020, the Sponsor agreed to loan
the Company up to $150,000 pursuant to an unsecured Note Payable to cover expenses related to the Initial Public Offering, pursuant to
which the Company borrowed approximately $71,000. This loan was payable without interest upon the completion of the Initial Public Offering.
The Company fully repaid the Note Payable on October 19, 2020, and this credit facility is no longer in effect. There were no related
party loans outstanding at June 30, 2021 or December 31, 2020.
Working Capital Loans
In order to fund working capital deficiencies
or finance transaction costs in connection with an intended initial business combination, the initial stockholders, officers and directors
and their affiliates may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”).
Except as may be precluded by the terms of a business combination definitive agreement, up to $1.5 million of such Working Capital
Loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender.
Such warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such loans, if any, have not
been determined and no written agreements exist with respect to such loans to date. No Working Capital Loans were outstanding at June
30, 2021 or December 31, 2020.
Note 5 – Commitments and Contingencies
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic on the healthcare industry, which its target company operates in, and has concluded that while it is reasonably
possible that the virus could have a negative effect on the Company’s financial position and results of its operations, the specific
impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
The Sponsor is entitled to registration rights
with respect to the Founder Shares, Private Placement Warrants and any additional warrants that may be issued upon conversion of working
capital loans pursuant to a registration rights agreement. The Sponsor will be entitled to make up to three demands, excluding short form
registration demands, that the Company register such securities for sale under the Securities Act. In addition, Sponsor will have “piggy-back”
registration rights to include their securities in other registration statements filed by the Company. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting Agreement
Pursuant to the underwriting agreement for the
Initial Public Offering, $0.35 per unit, or $4.0 million in the aggregate, will be payable to the underwriter for deferred underwriting
commissions. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that
the Company completes a business combination, subject to the terms of the underwriting agreement.
Other Commitments and Obligations
As of June 30, 2021, the Company did not have
any lease obligations or purchase commitments, and it had no long-term liabilities other than the warrant liabilities of $9.5 million
and the deferred underwriting commission of $4.0 million that is payable from the Trust Account upon consummating the initial business
combination. In addition, upon consummation of the Merger described herein, the Company would be obligated to pay an M&A advisory
fee to Barclays Capital Markets Inc. from the Trust Account in the amount of approximately $14.2 million.
Note 6 – Warrant Liabilities
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a business combination and (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 issuance of the shares of Class A common stock issuable upon exercise of the Public Warrants and a current
prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or
blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their Public Warrants on a cashless
basis under certain circumstances). The Company has agreed that as soon as practicable, but in no event later than 15 business days after
the closing of the initial business combination, the Company will use its reasonable best efforts to file, and within 60 business days
following the initial business combination to have declared effective, a registration statement under the Securities Act covering the
issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain the effectiveness of such registration
statement and a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed; provided
that, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it
satisfies 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 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, it will not be required to file or maintain in effect a registration statement,
but it will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption
is not available.
The warrants have an exercise price of $11.50
per share, subject to adjustment, and will expire five years after the completion of a business combination or earlier upon redemption
or liquidation.
In addition, if (x) the Company issues additional
shares or equity-linked securities for capital raising purposes in connection with the closing of the initial business combination
at an issue price or effective issue price of less than $9.20 per share (as adjusted for stock splits, stock dividends, rights issuances,
subdivisions, reorganizations, recapitalizations and the like) (with such issue price or effective issue price to be determined in good
faith by the Company’s board of directors, and in the case of any such issuance to the Company’s initial stockholders, officers,
directors or their affiliates, without taking into account any Founder Shares held by them prior to such issuance) (the “Newly Issued
Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest
thereon, available for the funding of the initial business combination on the date of the consummation of the initial business combination
(net of redemptions), and (z) the volume weighted average trading price of the Company’s shares of 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 initial business combination (such
price, the “Market Value”) is below $9.20 per share, the exercise price of each warrant will be adjusted (to the nearest cent)
such that the effective exercise price per full share will be equal to 115% of the higher of (i) the Market Value and (ii) the Newly Issued
Price, and the $18.00 per-share redemption trigger price described below will be adjusted (to the nearest cent) to be equal to 180%
of the higher of (i) the Market Value and (ii) the Newly Issued Price.
The Private Placement Warrants are identical to
the Public Warrants, except that (1) the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the
Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a business combination, subject
to certain limited exceptions, (2) the Private Placement Warrants are non-redeemable (subject to certain exceptions) and exercisable
on a cashless basis so long as they are held by the Sponsor or its permitted transferees and (3) the Sponsor and its permitted transferees
have certain registration rights related to the Private Placement Warrants (including the shares of Class A common stock issuable upon
exercise of the Private Placement Warrants). 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.
Once the warrants become exercisable, the Company
may redeem the outstanding warrants (except for the Private Placement Warrants):
|
➤
|
in whole and not in part;
|
|
➤
|
at a price of $0.01 per warrant;
|
|
➤
|
upon a minimum of 30 days’
prior written notice of redemption; and
|
|
➤
|
if, and only if, the last reported
sale price of the 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 commencing once the Warrants become exercisable
and ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
|
If the Company calls the Public Warrants for redemption,
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.
Commencing ninety days after the warrants become
exercisable, the Company may redeem the outstanding Warrants:
|
➤
|
in whole and not in part;
|
|
➤
|
at $0.10 per warrant upon a
minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless
basis prior to redemption and receive that number of shares of Class A common stock to be determined by reference to an agreed table
based on the redemption date and the “fair market value” of the Company’s Class A common stock;
|
|
➤
|
if, and only if, the last reported
sale price of the Company’s Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption
to the warrant holders;
|
|
➤
|
if, and only if, the Private
Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above;
and
|
|
➤
|
if, and only if, there is an
effective registration statement covering the issuance of the shares of Class A common stock (or a security other than the Class A common
stock into which the Class A common stock has been converted or exchanged for in the event the Company is not the surviving company in
the initial business combination) issuable upon exercise of the warrants and a current prospectus relating thereto available throughout
the 30-day period after written notice of redemption is given.
|
The “fair market value” of the Class
A common stock for this purpose shall mean the average last reported sale price of the Class A common stock for the 10 trading days ending
on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
In no event will the Company be required to net
cash settle any warrant. If the Company is unable to complete a business combination within the Combination Period and the Company liquidates
the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they
receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
Note 7 – Stockholders’ Equity
Class A Common Stock—The Company
is authorized to issue 50,000,000 shares of Class A common stock with a par shares value of $0.0001 per share. June 30, 2021 and
December 31, 2020, there were 11,500,000 shares of Class A common stock issued or outstanding. Of the outstanding shares of
Class A common stock, 9,678,938 and 9,784,208 were subject to possible redemption at June 30, 2021 and December 31, 2020, respectively,
and therefore classified outside of permanent equity.
Class B Common Stock—The Company
is authorized to issue 12,500,000 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. As of June
30, 2021 and December 31, 2020, 2,875,000 shares of Class B common stock were issued and outstanding.
The shares of Class B common stock will automatically
convert into shares of Class A common stock at the time of the initial business combination, or earlier at the option of the holder, on
a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and
subject to further adjustment as described herein). 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 issued in the Initial Public Offering and related to the closing of the initial business
combination (including pursuant to a specified future issuance), 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 then-outstanding shares of Class B common
stock agree to waive such adjustment with respect to any such issuance or deemed issuance, including pursuant to a specified future 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, 20% of the sum of the total number of all shares of common stock outstanding upon the completion
of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection
with our initial business combination (excluding any shares or equity-linked securities issued or issuable to any seller in the initial
business combination). The Sponsor waived such anti-dilution adjustments in connection with the proposed business
combination with DocGo.
Preferred stock—The Company
is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. As of June 30, 2021 and December 31,
2020, there were no shares of preferred stock issued or outstanding.
Note 8 – Fair Value Measurements
The following table presents information about
the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2021 and December 31,
2020 by level within the fair value hierarchy:
|
|
Fair Value Measured as of June 30,
2021
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - money market fund holding solely U.S. Treasury Securities
|
|
$
|
115,007,460
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
115,007,460
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public Warrant liabilities
|
|
$
|
5,711,666
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,711,666
|
|
Private Placement Warrant liabilities
|
|
|
—
|
|
|
|
3,774,666
|
|
|
|
—
|
|
|
|
3,774,666
|
|
Total Warrant liabilities
|
|
$
|
5,711,666
|
|
|
$
|
3,774,666
|
|
|
$
|
—
|
|
|
$
|
9,486,332
|
|
|
|
Fair Value Measured as of December 31, 2020
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - U.S.
Treasury Securities
|
|
$
|
115,024,797
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
115,024,797
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public Warrant liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,443,335
|
|
|
$
|
5,443,335
|
|
Private Placement Warrant liabilities
|
|
|
—
|
|
|
|
—
|
|
|
|
3,597,335
|
|
|
|
3,597,335
|
|
Total Warrant liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,040,670
|
|
|
$
|
9,040,670
|
|
The Company utilized a Monte Carlo simulation
to estimate the fair value of the Public Warrants and Private Placement Warrants at December 31, 2020, and used the quoted price
of the Public Warrants on the Nasdaq Stock Market at June 30, 2021 to estimate the fair value of both the Public Warrants and Private
Placement Warrants at that date.
Transfers to/from Levels 1, 2 and 3 are recognized
at the end of the reporting period. Effective March 31, 2021, the fair value of the Public Warrant liabilities was reclassified from Level
3 to Level 1, and the fair value of the Private Placement Warrants was reclassified from Level 3 to Level 2.
Level 1 assets include investments in money market
funds that invest solely in U.S. Treasury securities. The Company uses inputs such as actual trade data, quoted market prices from dealers
or brokers, and other similar sources to determine the fair value of its investments.
The following table presents the changes in the fair value of warrant
liabilities measured using Level 3 inputs during the six months ended June 30, 2021:
|
|
Public
Warrants
|
|
|
Private
Placement
Warrants
|
|
|
Total
Warrant
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Fair value as of December 31, 2020
|
|
$
|
5,443,335
|
|
|
$
|
3,597,335
|
|
|
$
|
9,040,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfers to Levels 1 and 2
|
|
|
(5,443,335
|
)
|
|
|
(3,597,335
|
)
|
|
|
(9,040,670
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value as of June 30, 2021
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Note 9 – Subsequent Events
Management has evaluated subsequent events to
determine if events or transactions occurring through the date the unaudited condensed consolidated financial statements were issued required
potential adjustment to or disclosure in the unaudited condensed consolidated financial statements and has concluded that all such events
that would require recognition or disclosure have been recognized or disclosed.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the
“Company,” “Motion Acquisition Corp.,” “Motion,” “our,” “us” or “we”
refer to Motion Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations
should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere
in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
Cautionary Note Regarding
Forward-Looking Statements
This Quarterly Report
on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events.
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual
results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance
or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by
terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,”
“anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other
similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in
our other SEC filings.
Overview
We are a blank check
company incorporated as a Delaware corporation on August 11, 2020 for the purpose of effecting a merger, share exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses. On October 19, 2020, we consummated our initial
public offering (“Initial Public Offering”) of units (the “Units” and, with respect to the Class A common
stock included in the Units, the “Public Shares” and with respect to the warrants included in the Units, the “Public
Warrants”) and simultaneous private placement (“Private Placement”) of warrants (“Private Placement Warrants”),
which is summarized in Note 3 to the accompanying unaudited condensed consolidated financial statements. Upon the closing of the Initial
Public Offering and the Private Placement, $115.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial
Public Offering and Private Placement Warrants in the Private Placement were placed in a trust account (“Trust Account”)
located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
As more fully described
in Note 1 to the accompanying unaudited condensed consolidated financial statements, on March 8, 2021, the Company entered into a merger
agreement (the “Merger Agreement”) with Ambulnz, Inc. dba DocGo (“DocGo”) pursuant to which DocGo would merge
with and into a newly incorporated subsidiary of the Company (the “Merger”), with DocGo being the surviving entity of the
Merger and becoming a wholly-owned subsidiary of the Company. The Merger is expected to be consummated following the receipt of required
approval by the stockholders of the Company and DocGo, required regulatory approvals, and the fulfillment of other conditions. Concurrently
with the execution of the Merger Agreement, we entered into a series of subscription agreements with accredited investors providing for
the purchase by such investors of an aggregate of 12,500,000 shares of Class A common stock at a price per share of $10.00, for gross
proceeds of $125 million (collectively, the “PIPE”). The closing of the PIPE is conditioned upon the consummation of the Merger.
Our amended and restated certificate of incorporation
provides that we have until October 19, 2022 (24 months from the closing of our Initial Public Offering) to complete our initial business
combination. If we are unable to complete our initial business combination within such period and stockholders do not otherwise approve
an amendment to our charter to extend such date, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and
not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of
then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject
in the case of clauses (ii) and (iii) to our obligations under Delaware law to provide for claims of creditors and the requirements of
other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire
worthless if we fail to complete our initial business combination within the 24-month time period.
Liquidity and Capital Resources
As of June 30, 2021,
we had approximately $234,000 of cash in our operating bank account and approximately $293,000 of working capital.
Until the time of our
Initial Public Offering on October 19, 2020, our liquidity needs were satisfied through a payment of $25,000 from our Chief Executive
Officer to fund certain offering costs in exchange for the issuance of shares of Class B common stock, par value $0.0001 per share
(the “Founder Shares”) to Motion Acquisition LLC, a Delaware limited liability company (the “Sponsor”), and
advances to us from our Sponsor of approximately $71,000 under a related party note payable to pay for other offering costs in connection
with the Initial Public Offering. Subsequent to October 19, 2020 through June 30, 2021, our liquidity needs have been satisfied from the
net proceeds of the consummation of the Private Placement not held in the Trust Account. We fully repaid the note payable on October 19,
2020. In addition, in order to finance transaction costs in connection with a business combination, our officers, directors and initial
stockholders may, but are not obligated to, provide us with loans (“Working Capital Loans”). As of June 30, 2021, there were
no Working Capital Loans outstanding.
Based on the foregoing,
our management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the
consummation of a business combination or one year from this filing. Over this time period, we will be using these funds to pay existing
accounts payable and to consummate our initial business combination.
Results of Operations
Our entire activity since
inception up to June 30, 2021 has been in preparation for our formation, our Initial Public Offering, and, since the closing of our Initial
Public Offering, the search for business combination candidates and negotiating the terms of a merger with our selected target company.
We will not be generating any operating revenues until the closing and completion of our initial business combination.
For the three months ended June 30, 2021, we had a net loss of approximately
$3.0 million, which included a non-operating loss of approximately $2.8 million arising from the change in fair value of warrant
liabilities and general and administrative expenses totaling approximately $0.2 million.
For the six months ended June 30, 2021, we had a net loss of approximately
$1.1 million, which included a non-operating loss of approximately $0.4 million arising from the change in fair value of warrant
liabilities and general and administrative expenses totaling approximately $0.6 million.
Contractual Obligations
Registration Rights
The Sponsor is entitled to registration rights
pursuant to a registration rights agreement. The Sponsor will be entitled to make up to three demands, excluding short form registration
demands, that we register the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of working
capital loans for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to
include their securities in other registration statements filed by us. We will bear the expenses incurred in connection with the filing
of any such registration statements.
Commitments and Other Obligations
As of June 30, 2021, we did not have any lease
obligations or purchase commitments, and we had no long-term liabilities other than the warrant liabilities of $9.5 million and the deferred
underwriting commission of $4.0 million that is payable from the Trust Account upon consummating our initial business combination. In
addition, upon consummation of the Merger described herein, we would be obligated to pay an M&A advisory fee to Barclays Capital Inc.
from the Trust Account in the amount of approximately $14.2 million.
Critical Accounting Policies
The preparation of financial statements in accordance
with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company has
identified the following as its critical accounting policies:
Redeemable Shares
All of the 11,500,000 Public
Shares sold as part of our Initial Public Offering contain a redemption feature as described in this Annual Report. In accordance with
FASB ASC 480, “Distinguishing Liabilities from Equity”, redemption provisions not solely within the control of the Company
require the security to be classified outside of permanent equity. Our amended and restated certificate of incorporation provides a minimum
net tangible asset threshold of $5,000,001. We recognize changes in redemption value immediately as they occur and will adjust the carrying
value of the security to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount
of redeemable shares are effected by recording offsetting adjustments to additional paid-in capital. At June 30, 2021, there were 11,500,000
Public Shares outstanding, of which 9,678,938 were recorded as redeemable shares and classified outside of permanent equity, and 1,821,062
were classified as Class A common stock in stockholders’ equity.
Warrant Liabilities
We account for the warrants
issued in connection with our Initial Public Offering and Private Placement 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 and adjust the warrants 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 statement of operations. The fair value of the warrants was
determined using Monte Carlo simulations at the Initial Public Offering date and at December 31, 2020, and by reference to the quoted
price of the Public Warrants on the Nasdaq Stock Market at March 31, 2021 and June 30, 2021.
Net Income (Loss) per
Common Share:
In accordance with FASB ASC 260, “Earnings
Per Share” (“ASC 260”), shares of Class A common stock are treated as participating securities because such shares are
entitled to a pro rata share of trust earnings net of income tax and franchise tax expense, but do not otherwise share in the Company’s
net income or loss. Consequently, net income (loss) per share is calculated using the two-class method prescribed by ASC 260. Pursuant
to this method, net income per share for Class A common stock is calculated by dividing the interest income earned on investments held
in the Trust Account net of income and franchise taxes expense, by the weighted average number of shares of Class A common stock outstanding
since original issuance, and net income (loss) per share for Class B common stock is calculated by dividing the net income (loss), adjusted
for investment income allocated to the Class A shares net of taxes, by the weighted average number of shares of Class B common stock outstanding
during the period.
Off-Balance Sheet
Arrangements
As of June 30, 2021,
we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with
new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay
the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the
relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the unaudited condensed
consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public
company effective dates.
Additionally, we are
in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we
may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over
financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted
by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about
the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items
such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee
compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until
we are no longer an “emerging growth company,” whichever is earlier.