Recent Developments
On July 21, 2021, the Company entered into the Business Combination Agreement with Paylink Holdings Inc., a Delaware corporation (“Blocker”), Normandy Holdco LLC, a Delaware limited liability company, PubCo, Milestone Merger Sub Inc., MDH Merger Sub, CF OMS LLC, a Delaware limited liability company, and OP Group.
Pursuant to the Business Combination Agreement, among other transactions, MDH Merger Sub will merge with and into Company (the “MDH Merger”), with the Company surviving the MDH Merger as a wholly-owned subsidiary of PubCo. In connection with the MDH Merger, (i) each share of Class A common stock, par value $0.001 per share, and Class B common stock, par value $0.001 per share, of the Company outstanding immediately prior to the consummation of the MDH Merger will be converted into one share of Class A common stock, par value $0.001 per share, of PubCo (“PubCo Class A Common Stock”), and (ii) each Warrant of the Company outstanding as of immediately prior to the consummation of the MDH Merger will be exchanged for a warrant exercisable for shares of PubCo Class A Common Stock. The consummation of MDH Merger and the other transactions contemplated by the Business Combination Agreement will result in the reorganization of the combined post-business combination company into an umbrella partnership C corporation (or “Up-C”) structure. Under the Up-C structure, substantially all of the assets and the business of PubCo will be held by OP Group and its subsidiaries, and PubCo’s only assets will consist of its indirect ownership of OP Group common units through the Company and PubCo’s other wholly-owned subsidiaries.
In connection with the proposed business combination, PubCo entered into subscription agreements with certain investors who agreed to purchase in connection with the closing of the business combination an aggregate of 1,500,000 shares of PubCo Class A Common Stock for a purchase price of $10.00 per share, for an aggregate purchase price of $15,000,000 (the “PIPE Investment”). The obligations of each party to consummate the PIPE Investment are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through September 30, 2021 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination and activities in connection with the proposed acquisition of Blocker and OP Group. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.
For the three months ended September 30, 2021, we had a net income of $4,630,619, which consisted of a change in fair value of warrant liabilities of $6,362,300 and income earned on our marketable securities held in the Trust Account of $3,552, partially offset by operational costs of $1,735,233.
For the nine months ended September 30, 2021, we had a net income of $3,942,023, which consisted of a change in fair value of warrant liabilities of $7,660,500 and income earned on our marketable securities held in the Trust Account of $23,886, partially offset by transaction costs allocable to warrant liabilities of $727,230 and operational costs of $3,015,133.
For the period from July 9, 2020 (inception) through September 30, 2020, we had net loss of $1,000, which consisted of formation and operational costs.
Liquidity and Capital Resources
On February 4, 2021, we consummated the Initial Public Offering of 27,600,000 Units, at a price of $10.00 per Unit, which included the full exercise by the underwriters of their over-allotment option in the amount of 3,600,000 Units, generating gross proceeds of $276,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,550,000 Private Placement Warrants to the Sponsor at a price of $1.00 per Private Placement Warrant generating gross proceeds of $6,550,000.
For the nine months ended September 30, 2021, cash used in operating activities was $564,949. Net income of $3,942,023 was affected by interest earned on marketable securities held in the Trust Account of $23,886, the change in fair value of warrant liabilities of