NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND
BUSINESS OPERATIONS
Revolution Acceleration Acquisition Corp
(formerly known as Acceleration Acquisition Corporation) (the “Company”) is a blank check company incorporated in Delaware
on September 10, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”).
The Company has one subsidiary, Pickup Merger
Corp, a direct, wholly-owned subsidiary of the Company incorporated in Delaware on February 19, 2021 (“Merger Sub”)
(see Note 10).
As of March 31, 2021, the Company had not yet
commenced any operations. All activity for the period from September 10, 2020 (inception) through March 31, 2021 relates to the Company’s
formation and the initial public offering (the “Initial Public Offering”), which is described below, identifying a target
company for a Business Combination and activities in connection with the proposed acquisition of Berkshire Grey, Inc., a Delaware corporation
(“BG”) (see Note 10).
The registration statement for the Company’s
Initial Public Offering was declared effective on December 7, 2020. On December 10, 2020, the Company consummated the Initial Public
Offering of 28,750,000 units (the “Units” and, with respect to the shares of Class A common stock included in
the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option
in the amount of 3,750,000 Units, at $10.00 per Unit, generating gross proceeds of $287,500,000, which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 5,166,667 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 RAAC
Management LLC (the “Sponsor”), generating gross proceeds of $7,750,000, which is described in Note 4.
Transaction costs amounted to $16,242,914,
consisting of $5,750,000 of underwriting fees, $10,062,500 of deferred underwriting fees and $430,414 of other offering costs.
Following the closing of the Initial Public
Offering on December 10, 2020, an amount of $287,500,000 ($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 Warrants was placed in a trust account (the “Trust Account”),
and invested 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 any open-ended investment company that holds itself out as a money market fund
meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”),
as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution
of the funds in the Trust Account to the Company’s stockholders, as described below.
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 Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business
Combination. NASDAQ rules provide that the 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 on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination.
The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more 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 holders of
the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their
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. In connection with a proposed Business Combination, the
Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may
seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with
a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such
consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted
are voted in favor of the Business Combination.
If the Company seeks stockholder approval
of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption
rights with respect to 15% or more of the Public Shares without the Company’s prior written consent.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The public stockholders will be entitled
to redeem their shares for a pro rata portion of the amount then in the Trust Account (initially $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 underwriter (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.
If a stockholder vote is not required 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, offer such redemption pursuant to the tender offer rules of the Securities and Exchange
Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included
in a proxy statement with the SEC prior to completing a Business Combination.
The Company’s Sponsor, officers and directors
and other holders of Founder Shares and alignment shares (collectively, the “Initial Stockholders”) have agreed (a) to
vote Founder Shares (as defined in Note 5), alignment shares (as defined in Note 5) and any Public Shares they purchased during or after
the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s Amended and
Restated Certificate of Incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation
of a Business Combination unless the Company provides dissenting public stockholders with the opportunity to redeem their Public Shares
in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares and alignment shares) and Private
Placement Warrants (including underlying securities) they hold into the right to receive cash from the Trust Account in connection with
a stockholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination
if the Company does not seek stockholder approval in connection therewith) or a vote to amend the provisions of the Amended and Restated
Certificate of Incorporation relating to stockholders’ rights of pre-Business Combination activity and (d) that the Founder
Shares, alignment shares and Private Placement Warrants (including underlying securities) shall not participate in any liquidating distributions
upon winding up if a Business Combination is not consummated. However, the Initial Stockholders will be entitled to liquidating distributions
from the Trust Account with respect to any Public Shares they may have purchased during or after the Initial Public Offering if the Company
fails to complete its Business Combination.
If the Company is unable to complete a Business
Combination by December 10, 2022 (the “Combination Period”), the Company will (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem
the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest earned on the funds held in the Trust Account and not previously released to us to pay 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 liquidation distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the
remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal
dissolution of the Company, subject in each case to its obligations under Delaware law to provide for claims of creditors and the
requirements of applicable law. The underwriter has agreed to waive its rights to the deferred underwriting commission held in
the Trust Account in the event the Company does not complete 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 assets remaining available
for distribution will be less than the Initial Public Offering price per Unit ($10.00).
The Sponsor has agreed that it will be
liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company,
or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar
agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00
per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the
Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided
that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any
and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims
under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor
to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient
funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore,
the Company cannot assure its stockholders that the Sponsor would be able to satisfy those obligations. None of the Company’s
officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors
and prospective target businesses. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the
Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s
independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements
with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
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 search for a target company, the specific impact is not
readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
Liquidity and Going Concern
As of Mach 31, 2021, the Company had $46,700 in
its operating bank accounts, $287,534,744 in securities held in the Trust Account to be used for a Business Combination or to repurchase
or redeem its common stock in connection therewith and a working capital deficit of $1,856,518.
Until the consummation of a Business Combination,
the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing
due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring,
negotiating and consummating the Business Combination.
If the Business Combination is not consummated,
the Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors,
or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time
to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital
needs. Accordingly, the Company may not be able to obtain additional financing. 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.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated
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 consolidated 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 consolidated
financial statements should be read in conjunction with Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the period
ended December 31, 2020, as filed with the SEC on May 13, 2021. The interim results for the three months ended March 31, 2021 are not
necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.
Principles of Consolidation
The accompanying condensed consolidated financial
statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions
have been eliminated in consolidation.
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 of 2002 (“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 statement 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.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
Use of Estimates
The preparation of the condensed consolidated
financial statements in conformity with GAAP requires the Company’s 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 consolidated
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 financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future confirming 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, 2021 and December 31, 2020.
Cash and Marketable Securities Held
in Trust Account
At March 31, 2021 and December 31, 2020,
substantially all of the assets held in the Trust Account were held in money market funds that invest in U.S. Treasury Bills.
Warrant Liability
The Company accounts for warrants as either
equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable
authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC
815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the
definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification
under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders
could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other
conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time
of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet
all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital
at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants
are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes
in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
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 Accounting Standards Codification (“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 is 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, Class A common stock subject to possible redemption is
presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed
consolidated balance sheets.
Income Taxes
The Company complies with the accounting
and reporting requirements of ASC Topic 740, “Income Taxes,” 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.
ASC Topic 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,
if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of
March 31, 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.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
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.
On March 27, 2020, President Trump signed
the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant
business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOL”)
and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend the excess business loss
rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest
limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts and
Jobs Act tax provisions. The Company does not believe that the CARES Act will have a significant impact on Company’s financial
position or statement of operations.
Net Income (Loss) Per Share
Net income (loss) per share is computed by dividing
net income (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered
the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 14,750,000 shares in the calculation
of diluted income (loss) per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion
of such warrants would be anti-dilutive.
The Company’s statement of operations includes
a presentation of income (loss) per share for common stock subject to possible redemption in a manner similar to the two-class method
of income (loss) per share. Net income (loss) per share, basic and diluted, for stock subject to possible redemption is calculated by
dividing the proportionate share of income (loss) on marketable securities held by the Trust Account by the weighted average number of
stock subject to possible redemption outstanding since original issuance.
Net loss per share, basic and diluted, for
non-redeemable common stock is calculated by dividing the net loss, adjusted for loss on marketable securities attributable to
Class A common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding
for the period.
Non-redeemable common stock includes Founder
Shares, alignment shares and non-redeemable Class A common stock as these shares do not have any redemption features. Non-redeemable
common stock participates in the loss on marketable securities based on non-redeemable Class A common stock’s proportionate
interest.
The following table reflects the calculation of
basic and diluted net income (loss) per share (in dollars, except per share amounts):
|
|
Three months
ended
March 31,
2021
|
|
Common stock subject to possible redemption
|
|
|
|
Numerator: Earnings allocable to Common stock subject to possible redemption
|
|
|
|
Interest earned on marketable securities held in Trust Account
|
|
$
|
35,885
|
|
Unrealized loss on marketable securities held in Trust Account
|
|
|
625
|
|
Less: Company’s portion available to pay taxes
|
|
|
(36,510
|
)
|
Net Income allocable to shares subject to redemption
|
|
$
|
—
|
|
Denominator: Weighted Average Class A common stock subject to possible redemption
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
25,098,791
|
|
Basic and diluted net income per share
|
|
$
|
0.00
|
|
|
|
|
|
|
Non-Redeemable Common Stock
|
|
|
|
|
Numerator: Net Loss minus Net Earnings
|
|
|
|
|
Net loss
|
|
$
|
(9,627,185
|
)
|
Add: Net income allocable to Class A common stock subject to possible redemption
|
|
|
—
|
|
Non-Redeemable Net Loss
|
|
$
|
(9,627,185
|
)
|
Denominator: Weighted Average Non-Redeemable Common Stock
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
13,234,542
|
|
Basic and diluted net loss per share
|
|
$
|
(0.73
|
)
|
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(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 of $250,000. The Company has not experienced losses on this 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,” approximates the carrying
amounts represented in the accompanying condensed consolidated balance sheet, primarily due to their short-term nature.
Fair Value Measurements
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 include:
|
●
|
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.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC
Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the
derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with
changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities
are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the
instrument could be required within 12 months of the balance sheet date.
Recent Accounting Standards
In August 2020, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 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)
(“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models
that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the
derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new
standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled
in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use
the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full
or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 as
of January 1, 2021 and the adoption did not have an impact on its financial position, results of operations or cash flows.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
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
consolidated financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering on December
10, 2020, the Company sold 28,750,000 Units, which includes a full exercise by the underwriter of the over-allotment option in the amount
of 3,750,000 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 redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A
common stock at an exercise price of $11.50 per whole share, subject to adjustment (see Note 8).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 5,166,667 Private Placement Warrants at a price of $1.50 per warrant ($7,750,000
in the aggregate), each exercisable to purchase one share of Class A common stock at a price of $11.50 per share, in a private
placement. The proceeds from the sale of the Private Placement Warrants were 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
proceeds from the sale of the Private Placement Warrants 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.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On September 15, 2020, the Sponsor paid
$25,000 to cover certain offering costs of the Company in consideration for 8,625,000 shares of Class B common stock (the
“Founder Shares”). On November 20, 2020, the Sponsor exchanged 4,791,667 Founder Shares, which were cancelled by the
Company, for 5,750,000 alignment shares. On November 20, 2020, the Sponsor transferred 16,000 Founder Shares and 24,000 alignment
shares to each of Mr. Museles, Ms. Caldwell and Mr. Fish, the Company’s independent directors, and 50,000 Founder Shares
and 50,000 alignment shares to Andrew Wallace, who will serve as an advisor to the Sponsor and provide it with services in connection
with the sourcing and completion of a Business Combination. Up to 500,000 Founder Shares and 750,000 alignment shares are subject
to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment is not exercised in full or in part so that
the Founder Shares and alignment shares will represent 10% and 15%, respectively, of the Company’s issued and outstanding
shares of common stock after the Initial Public Offering. The alignment shares are reflected as Class C common stock, have the
same rights and conditions are Class B common stock and are more fully described in Note 7. As a result of the underwriter’s
election to fully exercise the over-allotment option on December 10, 2020, no Founder Shares or alignment shares are currently
subject to forfeiture.
The Sponsor and other holders of Founder
Shares and alignment shares have agreed, subject to certain 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 a Business Combination or (B) subsequent to
a 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 a Business Combination, or (y) the date on which
the Company completes a liquidation, merger, capital stock exchange 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.
The Sponsor and other holders of Founder Shares and alignment
shares have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the alignment shares until the
earlier of: (A) their conversion into shares of Class A common stock; and (B) subsequent to the initial Business Combination, the
date on which the Company completes a merger, stock exchange, reorganization or other similar transaction that results in both
a change of control and all of the Company’s public stockholders having the right to exchange their shares of Class A common
stock for cash, securities or other property.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
Administrative Support Agreement
The Company entered into an agreement, commencing
on December 7, 2020, pursuant to which it will agree to pay the Sponsor a total of $10,000 per month for office space, administrative
and support services. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying
these monthly fees. For the three months ended March 31, 2021, the Company incurred $30,000 in fees for these services, of which
$10,000 is included in accrued expenses in the accompanying balance sheet.
Advance to Related Party
As of March 31, 2021, an aggregate of $25,000 of excess funding was
due to be repaid by the Sponsor. The balance was repaid on April 6, 2021.
Promissory Note — Related Party
On September 11, 2020, the Sponsor agreed
to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory
note (the “Promissory Note”). The Promissory Note is non-interest bearing and payable on the earlier of (i) June
30, 2021 or (ii) the consummation of the Initial Public Offering. As of March 31, 2021 and December 31, 2020, there was no
balance outstanding under the Promissory Note. The outstanding balance under the Promissory Note of $83,686 as of December 10,
2020 was repaid on December 15, 2020.
Related Party Loans
In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor or certain of the Company’s officers
and directors may, but are not obligated to, loan the Company funds on a non-interest basis as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of
the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds
held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds
held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay
the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined
and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business
Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible
into warrants at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration rights agreement
entered into on December 7, 2020, the holders of the Founder Shares, alignment shares, Private Placement Warrants and any warrants
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 and warrants that may be issued upon conversion of Working Capital Loans and upon conversion
of the Founder Shares and alignment shares) will be entitled to registration rights requiring the Company to register such securities
for resale (in the case of the Founder Shares and alignment shares, only after conversion to shares of our Class A common
stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration 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. However, the registration rights agreement
provides that the Company will not be required to effect or permit any registration or cause any registration statement to become
effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidating damages
or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear
the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter is entitled to a deferred
fee of $0.35 per Unit, or $10,062,500 in the aggregate. Of such amount, at the Company’s sole and absolute discretion, up
to $0.175 per Unit, or up to $5,031,250, may be paid to third parties not participating in the Initial Public Offering that assist
the Company in consummating its initial Business Combination. 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.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
Merger Agreement
On February 23, 2021, the Company entered
into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Pickup Merger Corp, a Delaware
corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), and Berkshire Grey, Inc., a Delaware
corporation (“Berkshire Grey”), relating to a proposed business combination with Berkshire Grey (the “Berkshire
Grey Business Combination”). Pursuant to the Merger Agreement, Merger Sub will merge with and into Berkshire Grey, with Berkshire
Grey being the surviving corporation of the merger and a direct, wholly owned subsidiary of the Company.
Subject to the terms and conditions of the
Merger Agreement, the consideration to be paid in respect of each share of common stock, par value $0.001 per share, of Berkshire
Grey (“Berkshire Grey Common Stock”) issued and outstanding immediately prior to the effective time of the Merger will
be a number of shares of newly-issued Class A common stock of the Company (with each share valued at $10.00), par value $0.0001
per share (“RAAC Class A Common Stock”), equal to (x) $2,250,000,000.00 divided by (y) the number of
shares of Aggregate Fully Diluted Company Stock (as defined in the Merger Agreement). Immediately prior to the closing of the Business
Combination (the “Closing”), all of the outstanding shares of each series of preferred stock of Berkshire Grey will
be converted into shares of Berkshire Grey Common Stock.
At the Closing, each outstanding option
to acquire Berkshire Grey Common Stock and each award of restricted Berkshire Grey Common Stock will be converted into the right
to receive an option relating to shares of Class A Stock and an award of restricted shares of Class A Stock, as applicable, upon
substantially the same terms and conditions, including with respect to vesting and termination-related provisions, as existed prior
to the Closing, except that the number of shares underlying such option and the exercise price and the number of shares subject
to restricted stock awards, in each case, shall be determined as set forth in the Merger Agreement.
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.
Concurrently with the execution of the Merger
Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors
(the “PIPE Investors”), pursuant to which the PIPE Investors have committed to purchase an aggregate amount of $165,000,000
in shares of Class A Stock at a purchase price of $10.00 per share, substantially concurrent with, and contingent upon, the Closing
(the “PIPE Investment”).
The Subscription Agreements for the PIPE
Investors provide for certain registration rights. In particular, the Company is required to, within 30 calendar days following
the Closing, file with the SEC a registration statement registering the resale of the securities issued pursuant to the Subscription
Agreements. Additionally, the Company is required to use its commercially reasonable efforts to have such registration statement
declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 90th calendar day
following the filing date thereof and (ii) the 10th business day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further
review.
Each Subscription Agreement will terminate
with no further force and effect upon the earliest to occur of: (a) such date and time as the Merger Agreement is terminated in
accordance with its terms; (b) the mutual written agreement of the parties to such Subscription Agreement; (c) if any of the conditions
to closing set forth in the Subscription Agreements are not satisfied on or prior to the closing of the PIPE Investment and, as
a result thereof, the transactions contemplated by such Subscription Agreement fail to occur; and (d) if the consummation of the
Berkshire Grey Business Combination has not occurred by the Outside Date.
NOTE 7. STOCKHOLDERS’ EQUITY
Preferred Stock —
The Company is authorized to issue up to 1,000,000 shares of $0.0001 par value preferred stock. At March 31, 2021 and December 31,
2020, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock —
On November 19, 2020, the Company amended its Certificate of Incorporation such that it is now authorized to issue up to 75,000,000
shares of Class A, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for
each share. At March 31, 2021, there were 4,613,928 shares of Class A common stock issued and outstanding, excluding 24,136,072
shares of Class A common stock subject to possible redemption. At December 31, 2020, there were 3,651,209 shares of Class A
common stock issued and outstanding, excluding 25,098,791 shares of Class A common stock subject to possible redemption.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
Class B Common Stock —
On November 19, 2020, the Company amended its Certificate of Incorporation such that it is now authorized to issue up to 10,000,000
shares of Class B, $0.0001 par value common stock. Holders of the Company’s Class B common stock are entitled to one
vote for each share. At March 31, 2021 and December 31, 2020, there were 3,833,333 shares of Class B common stock issued
and outstanding.
Class C Common Stock —
On November 19, 2020, the Company amended its Certificate of Incorporation such that it is now authorized to issue up to 15,000,000
shares of Class C, $0.0001 par value common stock. Holders of the Company’s Class C common stock are entitled to one vote
for each share. At March 31, 2021 and December 31, 2020, there were 5,750,000 shares of Class C common stock issued or outstanding.
The Class C common stock will automatically
convert into shares of Class A common stock at the earlier of (i) a time after the completion of a Business Combination in
which the sale price of shares of the Class A common stock equals or exceeds $15.25 if occurring before the third anniversary of
a Business Combination, $23.00 if occurring before the sixth anniversary of a Business Combination or $35.00 if occurring before
the ninth anniversary of a Business Combination, and (ii) subsequent to the completion of the Business Combination, the date on
which the Company completes a merger, stock exchange, reorganization or other similar transaction that results in both a change
of control and all of its public stockholders having the right to exchange their shares of Class A common stock for cash, securities
or other property, in each case, on a one-for-one basis, subject to adjustment. The Class C common stock shares will be returned
to the Company for cancellation in the event that they have not converted into shares of Class A common stock nine years after
a Business Combination.
Holders of Class A common stock, Class B
common stock and Class C 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. The shares of Class C common stock will automatically convert into shares of Class A common stock if the
Company meets certain stock price performance thresholds following the completion 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 issued in this offering and related to the closing of a Business Combination, the ratio
at which the shares of Class B common stock and Class C common stock will convert into shares of Class A common stock
will be adjusted (unless the holders of a majority of the issued and outstanding shares of Class B common stock and Class
C common stock agree to waive such anti-dilution 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 and Class C common stock
will equal, in the aggregate, on an as-converted basis, 25% of the sum of all common stock issued and 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 a Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller
in a Business Combination.
NOTE 8. WARRANT LIABILITY
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 consummation of a Business Combination or (b) 12 months from the closing of the Initial Public
Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.
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 covering the issuance of the Class A common stock issuable
upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying
its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares
of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has
been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder
of the warrants.
The Company has agreed that as soon as
practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its commercially
reasonable 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 warrants, and the Company will use its commercially reasonable efforts to cause the
same to become effective within 60 business days after the closing of a Business Combination and to maintain the effectiveness
of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance
with the provisions of the warrant agreement. Notwithstanding the above, if the shares of Class A common stock are, at the
time of any exercise of a 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 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 commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent
an exemption is not available.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
Redemption of Warrants When the Price
per share of Class A common stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company
may redeem the outstanding Public Warrants:
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per Public Warrant;
|
|
●
|
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
|
|
●
|
if, and only if, the last reported sale price of the Class A common stock for any 20-trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company send the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted).
|
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.
Redemption of Warrants When the Price
per share of Class A common stock Equals or Exceeds $10.00 — Once 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 based on the redemption date and the “fair market value” of our Class A common stock;
|
|
●
|
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted); and
|
|
●
|
if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
The exercise price and number of Class A
common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a
share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described
below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the Public Warrants. 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
Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution
from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public
Warrants may expire worthless.
In addition, if (x) the Company issues
additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the
closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A
common stock (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 Sponsor or its affiliates, without taking into account any Founder Shares and alignment
shares held by the Sponsor or such affiliates, as applicable, 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 Company’s initial Business Combination on the date of the consummation of such initial Business Combination
(net of redemptions), and (z) the volume weighted average trading price of the Company’s 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 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 and $10.00 per
share redemption trigger prices described above will be adjusted (to the nearest cent) to be equal to 180% and 100%, respectively,
of the higher of the Market Value and the Newly Issued Price.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
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 will
and the common shares 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 exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers
or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their
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.
NOTE 9. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC
Topic 820 for its financial 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.
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 our 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 December 31, 2020,
and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
|
|
|
March 31,
|
|
December 31,
|
|
Description
|
|
Level
|
|
2020
|
|
2020
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Marketable securities held in Trust Account
|
|
1
|
|
$
|
287,534,744
|
|
$
|
287,491,254
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
1
|
|
$
|
18,975,000
|
|
$
|
14,854,167
|
|
Warrant Liability – Private Placement Warrants
|
|
2
|
|
$
|
10,230,001
|
|
$
|
8,008,334
|
|
The Warrants were accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities on our balance sheet. 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 statement of operations.
The Public Warrants and Private Placement Warrants
were initially valued using a binomial Monte Carlo simulation model, which is considered to be a Level 3 fair value measurement. The Monte
Carlo model’s primary unobservable input utilized in determining the fair value of the Private Warrants is the expected volatility
of the common stock. 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
was implied from the Company’s own public warrant pricing.
REVOLUTION ACCELERATION ACQUISITION
CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
MARCH 31, 2021
(Unaudited)
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 Warrants. For periods subsequent to the detachment of the warrants from
the Units, the close price of the Public Warrant price was used as the fair value of the Public Warrants and Private Placement Warrants
as of each relevant date.
The key inputs into the Monte Carlo simulation
model for the Private Placement Warrants and Public Warrants were as follows at December 31, 2020:
Input
|
|
December 31, 2020
|
|
Risk-free interest rate
|
|
|
0.36
|
%
|
Trading days per year
|
|
|
252
|
|
Expected volatility
|
|
|
29.0
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Stock Price
|
|
$
|
10.41
|
|
The following table presents the changes in the fair value of
warrant liabilities:
|
|
Private Placement
|
|
|
Public
|
|
|
Warrant Liabilities
|
|
Fair value as of December 31, 2020
|
|
$
|
8,008,334
|
|
|
$
|
14,854,167
|
|
|
$
|
22,862,501
|
|
Change in valuation inputs or other assumptions
|
|
|
2,221,667
|
|
|
|
4,120,833
|
|
|
|
6,342,500
|
|
Fair value as of March 31, 2021
|
|
$
|
10,230,001
|
|
|
$
|
18,975,000
|
|
|
$
|
29,205,001
|
|
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon
this review, except as noted below and in Note 2, the Company did not identify any subsequent events that would have required adjustment
or disclosure in the condensed consolidated financial statements.
On March 30, 2021, April 10, 2021, May 4, 2021
and May 6, 2021, four purported stockholders of RAAC sent demand letters requesting that RAAC provide additional disclosures in an amendment
to the registration statement filed in connection with the Berkshire Grey Business Combination. The Company believes that the allegations
in the demand letters are meritless and no additional disclosure is required in such registration statement.