Item
1. Financial Statements.
PMV
CONSUMER ACQUISITION CORP.
CONDENSED BALANCE SHEETS
(As Restated)
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,626,583
|
|
|
$
|
2,005,228
|
|
Prepaid expenses
|
|
|
175,029
|
|
|
|
262,516
|
|
Total Current Assets
|
|
|
1,801,612
|
|
|
|
2,267,744
|
|
|
|
|
|
|
|
|
|
|
Cash and marketable securities held in Trust Account
|
|
|
175,075,533
|
|
|
|
175,040,510
|
|
TOTAL ASSETS
|
|
$
|
176,877,145
|
|
|
$
|
177,308,254
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Current liability - accrued expenses
|
|
$
|
149,525
|
|
|
$
|
214,025
|
|
|
|
|
|
|
|
|
|
|
Deferred underwriting fee payable
|
|
|
6,125,000
|
|
|
|
6,125,000
|
|
Derivative warrant liabilities
|
|
|
13,503,035
|
|
|
|
15,198,000
|
|
Total Liabilities
|
|
|
19,777,560
|
|
|
|
21,537,025
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption, 17,500,000 shares at redemption value of $10.00 per share
|
|
|
175,000,000
|
|
|
|
175,000,000
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity (Deficit)
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding
|
|
|
—
|
|
|
|
—
|
|
Class A common stock, $0.0001 par value; 75,000,000 shares authorized
|
|
|
—
|
|
|
|
—
|
|
Class B convertible common stock, $0.0001 par value; 10,000,000 shares authorized; 4,375,000 shares issued and outstanding (1)
|
|
|
437
|
|
|
|
437
|
|
Additional paid-in capital
|
|
|
66
|
|
|
|
66
|
|
Accumulated deficit
|
|
|
(17,900,918
|
)
|
|
|
(19,229,274
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
|
(17,900,415
|
)
|
|
|
(19,228,771
|
)
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
$
|
176,877,145
|
|
|
$
|
177,308,254
|
|
(1)
|
On August 3, 2020, the Company effected a 1.4-for-1 forward stock split
of its issued and outstanding shares of Class B convertible common stock. All shares and associated amounts have been retroactively restated
to reflect the forward stock split (see Note 6).
|
The
accompanying notes are an integral part of the unaudited condensed financial statements.
PMV
CONSUMER ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(As Restated)
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020 (1)
|
|
General and administrative expenses
|
|
$
|
121,062
|
|
|
$
|
—
|
|
|
$
|
288,490
|
|
|
$
|
525
|
|
Franchise tax expense
|
|
|
63,169
|
|
|
|
—
|
|
|
|
113,143
|
|
|
|
—
|
|
Loss from operations
|
|
|
(184,231
|
)
|
|
|
—
|
|
|
|
(401,633
|
)
|
|
|
(525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest earned on marketable securities held in Trust Account
|
|
|
1,954
|
|
|
|
—
|
|
|
|
35,024
|
|
|
|
—
|
|
Fair value adjustment on derivative warrant liabilities
|
|
|
1,931,465
|
|
|
|
—
|
|
|
|
1,694,965
|
|
|
|
—
|
|
Other income (expense)
|
|
|
1,933,419
|
|
|
|
—
|
|
|
|
1,729,989
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before provision for income taxes
|
|
|
1,749,188
|
|
|
|
—
|
|
|
|
1,328,356
|
|
|
|
(525
|
)
|
Provision for income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net income (loss)
|
|
$
|
1,749,188
|
|
|
$
|
—
|
|
|
$
|
1,328,356
|
|
|
$
|
(525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, of Class A common stock
|
|
|
17,500,000
|
|
|
|
—
|
|
|
|
17,500,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per share, Class A common stock
|
|
$
|
0.08
|
|
|
$
|
—
|
|
|
$
|
0.06
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, of Class B convertible common stock(2)
|
|
|
4,375,000
|
|
|
|
4,375,000
|
|
|
|
4,375,000
|
|
|
|
4,375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per share, Class B convertible common stock
|
|
$
|
0.08
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.06
|
|
|
$
|
(0.00
|
)
|
(1)
|
For the period from March 18, 2020 (inception) to June 30, 2020
|
(2)
|
On August 3, 2020, the Company effected a 1.4-for-1 forward stock split
of its issued and outstanding shares of Class B convertible common stock. All shares and associated amounts have been retroactively restated
to reflect the forward stock split (see Note 6).
|
The
accompanying notes are an integral part of the unaudited condensed financial statements.
PMV
CONSUMER ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2021
(Unaudited)
(As Restated)
|
|
Class A
Common Stock
|
|
|
Class B Convertible
Common Stock
|
|
|
Additional Paid-in
|
|
|
Accumulated
|
|
|
Total Stockholders’
Equity
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares(1)
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
(Deficit)
|
|
Balance – December 31, 2020
|
|
|
—
|
|
|
$
|
—
|
|
|
|
4,375,000
|
|
|
$
|
437
|
|
|
$
|
66
|
|
|
$
|
(19,229,274
|
)
|
|
$
|
(19,228,771
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(420,832
|
)
|
|
|
(420,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – March 31, 2021 (Unaudited)
|
|
|
—
|
|
|
$
|
—
|
|
|
|
4,375,000
|
|
|
$
|
437
|
|
|
$
|
66
|
|
|
$
|
(19,650,106
|
)
|
|
$
|
(19,649,603
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,749,188
|
|
|
|
1,749,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – June 30, 2021 (Unaudited)
|
|
|
—
|
|
|
$
|
—
|
|
|
|
4,375,000
|
|
|
$
|
437
|
|
|
$
|
66
|
|
|
$
|
(17,900,918
|
)
|
|
$
|
(17,900,415
|
)
|
(1)
|
On August 3, 2020, the Company effected a 1.4-for-1 forward stock split
of its issued and outstanding shares of Class B convertible common stock. All shares and associated amounts have been retroactively restated
to reflect the forward stock split (see Note 6).
|
The
accompanying notes are an integral part of the unaudited condensed financial statements.
PMV CONSUMER ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED JUNE 30, 2020
AND FOR THE PERIOD FROM MARCH 18, 2020
(INCEPTION) THROUGH JUNE 30, 2020
(Unaudited)
(As Restated)
|
|
Class
A
Common Stock
|
|
|
Class
B Convertible
Common Stock
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total
Stockholders’
Equity
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares(1)
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
(Deficit)
|
|
Balance
– March 18, 2020 (Inception)
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of Founder Shares to Sponsor
|
|
|
—
|
|
|
|
—
|
|
|
|
5,031,250
|
|
|
$
|
503
|
|
|
|
24,497
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(525
|
)
|
|
|
(525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
– March 31, 2020 (Unaudited)
|
|
|
—
|
|
|
$
|
—
|
|
|
|
5,031,250
|
|
|
$
|
503
|
|
|
$
|
24,497
|
|
|
$
|
(525
|
)
|
|
$
|
24,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
– June 30, 2020 (Unaudited)
|
|
|
—
|
|
|
$
|
—
|
|
|
|
5,031,250
|
|
|
$
|
503
|
|
|
$
|
24,497
|
|
|
$
|
(525
|
)
|
|
$
|
24,475
|
|
(1)
|
Includes an aggregate of up to 656,250 shares subject to forfeiture
if the over-allotment option is not exercised in full or in part by the underwriters (See Note 6). On August 3, 2020, the Company effected
a 1.4-for-1 forward stock split of its issued and outstanding shares of Class B common stock. All shares and associated amounts have been
retroactively restated to reflect the forward stock split (see Note 6)
|
The
accompanying notes are an integral part of the unaudited condensed financial statements.
PMV
CONSUMER ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(As Restated)
|
|
For the Six Months
Ended
June 30,
|
|
|
|
2021
|
|
|
2020 (1)
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,328,356
|
|
|
$
|
(525
|
)
|
Adjustments to reconcile net Income (loss) to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Interest earned on marketable securities held in Trust Account
|
|
|
(35,023
|
)
|
|
|
—
|
|
Change in fair value of derivative warrant liability
|
|
|
(1,694,965
|
)
|
|
|
—
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
87,487
|
|
|
|
—
|
|
Accrued expenses
|
|
|
(64,500
|
)
|
|
|
525
|
|
Net cash used in operating activities
|
|
|
(378,645
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from maturity of securities in Trust Account
|
|
|
175,073,579
|
|
|
|
—
|
|
Investment of cash in Trust Account
|
|
|
(175,073,579
|
)
|
|
|
—
|
|
Net cash used in investing activities
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from sale of Founder Shares
|
|
|
—
|
|
|
|
25,000
|
|
Net cash provided by financing activities
|
|
|
—
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
Net Change in Cash
|
|
|
(378,645
|
)
|
|
|
25,000
|
|
Cash and cash equivalents – Beginning of period
|
|
|
2,005,228
|
|
|
|
—
|
|
Cash and cash equivalents – End of period
|
|
$
|
1,626,583
|
|
|
$
|
25,000
|
|
(1)
|
For the period from March 18, 2020 (inception) through June 30, 2020
|
The
accompanying notes are an integral part of the unaudited condensed financial statements.
PMV
CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
PMV
Consumer Acquisition Corp. (the “Company”) was incorporated in Delaware on March 18, 2020. The Company was formed for the
purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business
combination with one or more businesses or entities (the “Business Combination”).
Although
the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends
to focus its search on companies in the consumer industry. The Company is an early stage and emerging growth company and, as such, the
Company is subject to all of the risks associated with early stage and emerging growth companies.
As
of June 30, 2021, the Company had not commenced any operations. All activity through June 30, 2021, relates to the Company’s formation,
the initial public offering (“Initial Public Offering”) and simultaneous private sale of warrants (“Private Warrants”),
which is described below, and identifying a target for a Business Combination. The Company will not generate any operating revenues until
after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income
from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The
registration statement for the Company’s Initial Public Offering was declared effective on September 21, 2020. On September 24,
2020, the Company consummated the Initial Public Offering of 17,500,000 units (the “Units” and, with respect to the shares
of common stock included in the Units Sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $175,000,000,
which is described in Note 3.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 6,150,000 warrants (the “Private Warrants”)
at a price of $1.00 per Private Warrant in a private placement to PMV Consumer Acquisition Holding Company, LLC (the “Sponsor”),
generating gross proceeds of $6,150,000, which is described in Note 4.
Offering
costs amounted to $9,957,390, consisting of $3,500,000 of underwriting fees, $6,125,000 of deferred underwriting fees and $507,390 of
other offering costs, of which $175,000 was offset with a credit paid by the Underwriter. In addition, at June 30, 2021, $1,626,583 of
cash was held outside of the Trust Account (as defined below) and is available for working capital purposes.
Following
the closing of the Initial Public Offering on September 24, 2020, an amount of $175,000,000 ($10.00 per Unit) from the net proceeds of
the sale of the Units in the Initial Public Offering and the sale of the Private Warrants was placed in a trust account (the “Trust
Account”) located in the United States, which will only be invested in U.S. government securities, within the meaning set forth
in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of
180 days or less or in any open-end investment company that holds itself out as a money market fund selected by the Company meeting the
conditions of Rule 2a-7 of the Investment Company Act, 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.
PMV
CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONT.)
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Units in the Initial
Public Offering and the sale of the Private Warrants, although substantially all of the net proceeds are intended to be applied generally
toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust
Account (excluding taxes payable on income earned on the Trust Account and deferred underwriting commissions) at the time of the agreement
to enter into an initial Business Combination. 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
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”). There is no assurance that the Company will be able to complete a Business Combination successfully.
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. The decision as to whether the Company will seek stockholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.00 per Public 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).
There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants, including
the Private Warrants. 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, solely if the Company seeks stockholder approval,
a majority of the shares voted are voted in favor of the Business Combination.
If
a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons,
the Company will, pursuant to its Certificate of Incorporation, as amended (the “Certificate of Incorporation”), conduct
the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) and file tender
offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required
by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares
in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks
stockholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote the Founder Shares (as
defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination
and not to convert any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company
in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares
irrespective of whether they vote for or against the proposed transaction, or do not vote at all.
Notwithstanding
the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Certificate of Incorporation will provide 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”, will be restricted from redeeming its
shares with respect to more than an aggregate of 20% or more of the Public Shares, without the prior consent of the Company.
PMV
CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONT.)
The
Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with
the completion of a Business Combination or an amendment to the Company’s Certificate of Incorporation described below, (b) to
waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to consummate
a Business Combination, and (c) not to propose an amendment to the Company’s Certificate of Incorporation to modify a public
stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance
or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination
within the required time period, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares
in conjunction with any such amendment.
The
Company will have until September 24, 2022, (or such later date as may be approved by the stockholders in an amendment to the Certificate
of Incorporation) to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not 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 the Company to pay franchise and income tax obligations and net of up to $50,000 of interest available to
be used for liquidation 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 the Company’s
remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s
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 the Company’s warrants, which will expire worthless if the Company fails to
complete a Business Combination within the Combination Period.
In order to protect the amounts
held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (except
for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective
target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account
to below (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the trust account as of the date of the 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, except as
to any claims by a third party who executed an agreement with the Company waiving any right, title, interest or claim of any kind they
may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters
of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not
be responsible to the extent of any liability for such third-party claims. 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 (except the
Company’s independent registered public accounting firm), 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.
PMV
CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
Accounting
for Class A common stock subject to possible redemption:
The Company concluded it should
restate its previously issued financial statements to classify all Class A common stock in temporary equity. In accordance with ASC 480-10-S99,
redemption provisions not solely within the control of the Company require shares subject to redemption to be classified outside of permanent
equity. The Company had previously classified a portion of its Class A common stock in permanent equity, or total stockholders’
equity. Although the Company did not specify a maximum redemption threshold, its charter currently provides that the Company will not
redeem its Class A common stock in an amount that would cause its net tangible assets to be less than $5,000,001. Also, in connection
with the change in presentation for the Class A common stock subject to possible redemption, the Company also revised its earnings
per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates
a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the
Company. As a result, the Company restated its previously filed financial statements to present all redeemable Class A common stock
as temporary equity and to recognize a re-measurement adjustment from the initial book value to redemption value at the time of its Initial
Public Offering.
Impact of the Restatements
The impact
of the restatements on the balance sheet, statements of operations and statement of cash flows for the Relevant Period is presented below.
The restatements had no impact on net cash flows from operating, investing or financing activities.
|
|
As of June 30, 2021
(Unaudited)
|
|
|
|
As Previously
Reported
|
|
|
Restatement
Adjustment
|
|
|
As Restated
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
176,877,145
|
|
|
$
|
-
|
|
|
$
|
176,877,145
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
$
|
149,525
|
|
|
$
|
-
|
|
|
$
|
149,525
|
|
Deferred underwriting commissions
|
|
|
6,125,000
|
|
|
|
-
|
|
|
|
6,125,000
|
|
Derivative warrant liabilities
|
|
|
13,503,035
|
|
|
|
-
|
|
|
|
13,503,035
|
|
Total liabilities
|
|
|
19,777,560
|
|
|
|
-
|
|
|
|
19,777,560
|
|
Class A common stock subject to possible redemption, at redemption value of $10.00 per share
|
|
|
152,099,575
|
|
|
|
22,900,425
|
|
|
|
175,000,000
|
|
Stockholders’ equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock- $0.0001 par value
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Class A common stock - $0.0001 par value
|
|
|
229
|
|
|
|
(229
|
)
|
|
|
-
|
|
Class B common stock - $0.0001 par value
|
|
|
437
|
|
|
|
-
|
|
|
|
437
|
|
Additional paid-in-capital
|
|
|
4,632,717
|
|
|
|
(4,632,651
|
)
|
|
|
66
|
|
Accumulated deficit
|
|
|
366,627
|
|
|
|
(18,267,545
|
)
|
|
|
(17,900,918
|
)
|
Total stockholders’ equity (deficit)
|
|
|
5,000,010
|
|
|
|
(22,900,425
|
)
|
|
|
(17,900,415
|
)
|
Total liabilities and stockholders’ equity (deficit)
|
|
$
|
176,877,145
|
|
|
$
|
-
|
|
|
$
|
176,877,145
|
|
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (CONT.)
Impact of the Restatements
(Cont.)
|
|
For the Six Months Ended
June 30, 2021
(Unaudited)
|
|
|
|
As Previously Reported
|
|
|
Restatement Adjustment
|
|
|
As Restated
|
|
Unaudited Condensed Statement of Operations
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
$
|
(401,633
|
)
|
|
$
|
-
|
|
|
$
|
(401,633
|
)
|
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest earned on investments held in Trust Account
|
|
|
35,024
|
|
|
|
-
|
|
|
|
35,024
|
|
Change in fair value on derivative warrant liabilities
|
|
|
1,694,965
|
|
|
|
-
|
|
|
|
1,694,965
|
|
Total other (expense) income
|
|
|
1,729,989
|
|
|
|
-
|
|
|
|
1,729,989
|
|
Net loss
|
|
$
|
1,328,356
|
|
|
$
|
-
|
|
|
$
|
1,328,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding, of Class A common stock
|
|
|
17,500,000
|
|
|
|
-
|
|
|
|
17,500,000
|
|
Basic and Diluted net loss per share, Class A common stock
|
|
$
|
0.00
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
Weighted-average shares outstanding, of Class B convertible common stock
|
|
|
4,375,000
|
|
|
|
-
|
|
|
|
4,375,000
|
|
Basic and Diluted net loss per share, Class B convertible common stock
|
|
$
|
0.30
|
|
|
$
|
(0.24
|
)
|
|
$
|
0.06
|
|
|
|
For the Six Months Ended
June 30, 2021
|
|
|
|
As Previously Reported
|
|
|
Restatement Adjustment
|
|
|
As Restated
|
|
Unaudited Condensed Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
1,328,356
|
|
|
$
|
-
|
|
|
$
|
1,328,356
|
|
Adjustment to reconcile net loss to net cash used in operating activities
|
|
|
(1,729,988
|
)
|
|
|
-
|
|
|
|
(1,729,988
|
)
|
Net cash used in operating activities
|
|
|
22,987
|
|
|
|
-
|
|
|
|
22,987
|
|
Net cash used in investing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-Cash Investing and Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
1,328,355
|
|
|
$
|
(1,328,355
|
)
|
|
$
|
-
|
|
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (CONT.)
Going Concern
In connection with the Company’s
assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company
is unable to complete a Business Combination by September 24, 2022, then the Company will cease all operations except for the purpose
of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability
to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required
to liquidate after September 24, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date.
NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation
S-X of the SEC. Certain information or footnote disclosures normally included in the 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 financial statements include all adjustments, consisting
of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows
for the periods presented.
The accompanying unaudited
condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended
December 31, 2020 as filed with the SEC on May 14, 2021, which contains the audited financial statements and notes thereto. The financial
information as of December 31, 2020 is derived from the audited financial statements presented in the Company’s Annual Report on
Form 10-K/A for the year ended December 31, 2020. The interim results for the three and six months ended June 30, 2021, are not necessarily
indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods.
Emerging Growth Company
The Company is an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012
(the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the
independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Emerging Growth Company (Cont.)
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 standards 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 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 financial
statements and 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 June 30, 2021, and December 31, 2020.
Marketable
securities held in Trust Account
At
June 30, 2021, the assets were held in shares of a money market fund that invests primarily in U.S. Treasury Bills. At December 31, 2020,
the assets held in the Trust Account were held primarily in U.S. Treasury Bills.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Common
Stock Subject to Possible Redemption
The Company accounts for its
common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” 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
common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence
of uncertain future events. Accordingly, at March 31, 2021, 17,500,000 shares of Class A common stock subject to possible redemption,
are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed
balance sheets.
The Company has classified all of the shares of Class A common stock
as temporary equity. Immediately upon the closing of the Public Offering, the Company recognized the accretion from initial book value
to redemption amount value. The change in the carrying value of redeemable shares of Class A common stock resulted in charges against
additional paid-in capital and accumulated deficit.
The Class A common stock
subject to possible redemption reflected on the balance sheets as of June 30, 2021, and December 31, 2020, are reconciled in the
following table:
Gross proceeds
|
|
$
|
175,000,000
|
|
Less:
|
|
|
|
|
Proceeds allocated to public warrants
|
|
|
(8,837,500
|
)
|
Class A shares offering costs
|
|
|
(9,454,542
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
18,292,042
|
|
Class A common stock subject to possible redemption
|
|
$
|
175,000,000
|
|
Offering
Costs
Offering costs consist
of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that are directly related to the
Initial Public Offering. Offering costs were allocated on a relative fair value basis between stockholders’ equity and expense.
The portion of offering costs allocated to the public warrants has been charged to expense. The portion of the offering costs allocated
to the public shares has been charged to stockholders’ equity. On September 24, 2020, offering costs amounting to $9,957,390 (consisting
of $3,500,000 of underwriting fees, $6,125,000 of deferred underwriting fees and $507,390 of other offering costs, net of a $175,000
credit paid by the Underwriter), was allocated as follows, $502,848 in offering costs was charged to expense and $9,454,542 was charged
to stockholders’ equity.
PMV
CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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 stock, 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. The fair
value of the warrants was estimated using a Monte Carlo simulation approach (see Note 9).
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax
assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred 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 in 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.
ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits
as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021.
The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
There
were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021. The Company is currently not
aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company
is subject to income tax examinations by major taxing authorities since inception.
PMV
CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Income Taxes (Cont.)
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 (“NOLs”)
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.
Net
Income (Loss) per Common Share
Net income (loss) per common
share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. The
Company has not considered the effect of warrants to purchase 14,900,000 shares of Class A common stock that were sold in the Initial
Public Offering and the private placement in the calculation of diluted income (loss) per share, since the average market price of the
Company’s Class A common stock for the three and six months ended June 30, 2021 and the three months ended June 30, 2020 and the
period from March 18, 2020 (Inception) to June 30, 2020, was below the Warrants’ $11.50 exercise price and the exercise of the warrants
is contingent upon the occurrence of future events. As a result, diluted income (loss) per common share is the same as basic income (loss)
per common share for the period presented. The Company has two classes of shares, which are referred to as Class A common stock (the “Common
Stock”) and Class B convertible common stock (the “Founder Shares”). Earnings and losses are shared pro rata between
the two classes of shares as long as a business combination is consummated. Accretion associated with the redeemable shares of Class A
common stock is excluded from earnings per share as the redemption value approximates fair value.
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 and management believes the Company is not exposed to significant risks on such account.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value
Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due
to their short-term nature.
Recent
Accounting Pronouncements
Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material
effect on the Company’s financial statements.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
4—INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 17,500,000 Units, at $10.00 per Unit. Each Unit consists of one share of Class A common
stock and one-half of one redeemable warrant (“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 (see Note 8).
NOTE
5—PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,150,000 Private Warrants at a price of $1.00
per Private Warrant, for an aggregate purchase price of $6,150,000. Each Private Warrant is exercisable to purchase one share of Class
A common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 7). The proceeds from the Private Warrants will
be added to the proceeds from the Initial Public Offering to be 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 Warrants will be used to fund the redemption of
the Public Shares (subject to the requirements of applicable law), and the Private Warrants will expire worthless.
NOTE
6—RELATED PARTY TRANSACTIONS
Founder
Shares
On
March 20, 2020, the Sponsor purchased 3,593,750 shares of Class B convertible common stock (the “Founder Shares”) for an
aggregate price of $25,000, or approximately $0.007 per share. As used herein, unless the context otherwise requires, “Founder
Shares” shall be deemed to include the shares of Class A common stock issuable upon conversion thereof. On August 3, 2020, the
Company effected a 1.4-for-1 forward stock split of its issued and outstanding shares of Class B convertible common stock, resulting
in an aggregate of 5,031,250 Founder Shares being outstanding, of which an aggregate of up to 656,250 shares were subject to forfeiture
by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full or in part so that the Sponsor
would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming
the Sponsor did not purchase any Public Shares in the Initial Public Offering).
The over-allotment option was not exercised, and 656,250 Founder Shares
were forfeited. As of June 30, 2021, and December 31, 2020, the issued and outstanding shares of Class B convertible common stock is 4,375,000
shares.
The
Founder Shares are identical to the Class A common stock included in the Units sold in the Initial Public Offering except that the Founder
Shares automatically convert into shares of Class A common stock at the time of the Company’s Initial Business Combination, are
subject to certain transfer restrictions as described in more detail below, and prior to a Business Combination have the exclusive right
to elect, replace and remove the directors of the Company. Holders of Founder Shares may also elect to convert their shares of Class
B convertible common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 6—RELATED PARTY TRANSACTIONS (CONT.)
Founder Shares (Cont.)
The
Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares in connection with the completion of a Business
Combination or an amendment to the Company’s Certificate of Incorporation described below, (b) to waive its rights to liquidating
distributions from the Trust Account with respect to the Founder Shares if the Company fails to consummate a Business Combination, and
(c) not to propose an amendment to the Company’s Certificate of Incorporation to modify a public stockholders’ ability to
convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s
obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the required time period,
unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The
Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares following the Initial
Public Offering until the earlier to occur of: (A) one year after the completion of the Initial Business Combination or (B) subsequent
to the Initial Business Combination, (x) if the last sale price of the Company’s 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, 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 the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any
of their Private Placement Warrants until 30 days after the completion of the Initial Business Combination. The Sponsor and the Company’s
officers and directors have also agreed to vote any Founder Shares held by them and any public shares purchased after Initial Public
Offering (including in open market and privately negotiated transactions) in favor of a Business Combination.
Promissory
Note—Related Party
On
June 16, 2020, the Sponsor agreed to loan the Company up to an aggregate of $150,000 to cover expenses related to the Initial Public
Offering pursuant to a promissory note (the “Note”). This loan was non-interest bearing and payable on the earlier of (i)
June 16, 2021, (ii) the completion of the Initial Public Offering or (iii) the date on which the Company determines not to proceed with
the Initial Public Offering. On October 13, 2020, the balance of $150,000 was repaid in full. As of June 30, 2021, and December 31, 2020,
there was no outstanding balance under this promissory note.
Administrative
Support Agreement
The Company entered into an agreement
whereby, commencing September 24, 2020 through the earlier of the Company’s consummation of a Business Combination and its liquidation,
the Company will pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative
support. For the three and six months ended June 30, 2021 the Company incurred fees for these services of $30,000 and $60,000 respectively,
and for the three months ended June 30, 2020 and the period March 18, 2020 (inception) through June 30, 2020, the Company incurred fees
for these services of $0 and $0 respectively. Administrative support fees included in accounts payable and accrued expenses of the accompanying
condensed balance sheets at June 30, 2021 and December 31, 2020, were $92,000 and $32,000, respectively.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 6—RELATED PARTY TRANSACTIONS (CONT.)
Related
Party Loans
In order to finance transaction
costs in connection with a Business Combination, the Sponsor, the Company’s officers or directors or their affiliates may, but
are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would
be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or,
at the lender’s discretion, up to $1,500,000 of the notes may be converted upon consummation of a Business Combination into warrants
at a price of $1.00 per warrant. Such warrants would be identical to the Private Warrants. In the event that a Business Combination does
not close, the Company may use a portion of the 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. As of June 30, 2021 and December 31, 2020, there were no
Working Capital Loans outstanding.
NOTE 7—COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration
rights agreement entered into on September 24, 2020, the holders of the Founder Shares, Private Warrants (and their underlying securities)
and any warrants that may be issued upon conversion of working capital loans (“Working Capital Warrants”), if any, will be
entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock).
These holders will be entitled to certain demand and “piggyback” registration rights.
The holders of Founder Shares,
Private Warrants and Working Capital Warrants will not be able to sell these securities until the termination of the applicable lock-up
period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The underwriters are entitled
to a deferred fee of $0.35 per Unit, or $6,125,000. The deferred fee will be forfeited by the underwriters solely in the event that the
Company fails to complete a Business Combination within the Combination Period, subject to the terms of the underwriting agreement.
Risks
and Uncertainties
Management is continuing
to evaluate the impact of the COVID-19 pandemic on the industry 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 unaudited condensed financial statements. The unaudited condensed
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE
8—STOCKHOLDERS’ EQUITY
Preferred Stock—The
Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights
and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2021 and December 31, 2020,
there were no shares of preferred stock issued or outstanding.
Common
Stock—The authorized common stock of the Company includes up to 75,000,000 shares of Class A common stock and 10,000,000
shares of Class B convertible common stock. The shares of Class B convertible common stock will automatically convert into shares of
Class A common stock at the time of Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends,
reorganizations, recapitalizations and the like. In the case that additional shares of Class A common stock, or equity-linked securities
convertible or exercisable for shares of Class A common stock, are issued or deemed issued in excess of the amounts sold in the Initial
Public Offering and related to the closing of an initial Business Combination, the ratio at which the Class B convertible common stock
will convert into shares of Class A common stock will be adjusted so that the number of shares of Class A common stock issuable upon
conversion of all shares of Class B convertible common stock will equal, in the aggregate 20% of the sum of the shares outstanding upon
the completion of the Initial Public Offering plus the number of shares of Class A common stock and equity-linked shares issued or deemed
issued in connection with the initial Business Combination (net of conversions), excluding any shares of Class A common stock or equity-linked
securities issued to any seller in the initial Business Combination and any Private Warrants or warrants issued to the Sponsor, any of
the Company’s officers or directors, or any of their affiliates upon conversion of Working Capital Loans.
If
the Company enters into an initial Business Combination, it may (depending on the terms of such an initial Business Combination) be required
to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s
stockholders vote on the Business Combination, to the extent the Company seeks stockholder approval in connection with the Business Combination.
Holders of the Company’s common stock are entitled to one vote for each share of common stock.
At June 30, 2021, and December
31, 2020, there were 17,500,000 shares of Class A common stock issued and outstanding, including 17,500,000 shares of Class A common stock
subject to possible redemption which have been reflected as temporary equity on the condensed balance sheets. At June 30, 2021, and December
31, 2020 there were 4,375,000 shares of Class B convertible common stock issued and outstanding.
Warrants—Public
Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) September
24, 2021. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the
shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock.
Under the terms of the warrant agreement, 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 best efforts to file a registration statement under the Securities Act covering such shares and maintain a current
prospectus relating to the shares of Class A common stock issuable upon exercise of the warrants until the expiration of the warrants
in accordance with the provisions of the warrant agreement.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 8—STOCKHOLDERS’ EQUITY (CONT.)
Warrants (Cont.)—Notwithstanding
the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective
within 60 days following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration
statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants
on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available.
If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The
Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once
the warrants become exercisable, the Company may redeem the Public Warrants:
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per
warrant;
|
|
●
|
upon not less than 30 days’
prior written notice of redemption;
|
|
●
|
if, and only if, the reported
last sale price of the Company’s common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like and subject to adjustment as described below) for any 20 trading days within a 30-trading
day period ending on the third business day prior to the notice of redemption to the warrant holders; and
|
|
●
|
If, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.
|
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.
The
exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including
in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted
for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash
settle the 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 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.
The
Private Warrants will be identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private
Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable
until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants
will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by
the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchaser or
its permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as
the Public Warrants.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 8—STOCKHOLDERS’ EQUITY (CONT.)
In
addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection
with the closing of an initial Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 our sponsor, initial stockholders or their affiliates, without taking into account any founders’
shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 50% of the total
equity proceeds, and interest thereon, available for the funding of an initial Business Combination on the date of the consummation of
an initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the common stock during the
20 trading day period starting on the trading day prior to the day on which the Company consummated an 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 greater of (i) the Market Value or (ii) the price at which we issue the additional shares of common
stock or equity-linked securities, and the $18.00 per share redemption trigger price of the warrants will be adjusted (to the nearest
cent) to be equal to 180% of the greater of (i) the Market Value or (ii) the price at which we issue the additional shares of common
stock or equity-linked securities.
NOTE
9—INCOME TAX
The
Company’s net deferred tax asset at June 30, 2021, is as follows:
Deferred tax asset
|
|
|
|
Organizational costs/Start-up expenses
|
|
$
|
110
|
|
Federal Net Operating Loss
|
|
|
129,038
|
|
Total deferred tax asset
|
|
|
129,148
|
|
Valuation allowance
|
|
|
(129,148
|
)
|
Deferred tax asset, net of allowance
|
|
$
|
—
|
|
The
income tax benefit for the six months ended June 30, 2021, consists of the following:
Federal
|
|
|
|
Current
|
|
$
|
—
|
|
Deferred
|
|
|
(129,148
|
)
|
|
|
|
|
|
State
|
|
|
|
|
Current
|
|
$
|
—
|
|
Deferred
|
|
|
—
|
|
Change in valuation allowance
|
|
|
129,148
|
|
Income tax benefit
|
|
$
|
—
|
|
As of June 30, 2021 and December 31, 2020, the Company had U.S. federal
and state net operating loss carryovers (“NOLs”) of $616,944 and $248,381, respectively, available to offset future taxable
income. These NOLs carryforward indefinitely.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 9—INCOME TAX (CONT.)
The NOLs may become subject
to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year
period in excess of 50%, as defined under Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state
tax provisions. The amount of the annual limitation, if any, will generally be determined based on the value of the Company immediately
prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.
In
assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies
in making this assessment. After consideration of all of the information available, management determined that a full valuation allowance
was required.
A
reconciliation of the income tax rate to the Company’s effective tax rate at June 30, 2021 is as follows:
Statutory federal income tax rate
|
|
|
21.0
|
%
|
State taxes, net of federal tax benefit
|
|
|
0.0
|
%
|
Permanent Book/Tax Differences
|
|
|
(23.2
|
)%
|
Valuation allowance
|
|
|
2.2
|
%
|
Income tax provision
|
|
|
0.0
|
%
|
The
Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination
by the various taxing authorities. The Company’s tax returns since inception remain open and subject to examination.
NOTE
10—FAIR VALUE MEASUREMENTS
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.
|
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 10—FAIR VALUE MEASUREMENTS (CONT.)
The
following tables present information about the Company’s assets that are measured at fair value on a recurring basis at June 30,
2021, and December 31, 2020, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair
value.
Description
|
|
June 30,
2021
|
|
|
Quoted
Prices
in Active
Markets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and marketable securities held in Trust Account
|
|
$
|
175,075,533
|
|
|
$
|
175,075,533
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
$
|
7,962,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,962,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability – Private Placement Warrants
|
|
$
|
5,540,535
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,540,535
|
|
Description
|
|
December 31,
2020
|
|
|
Quoted Prices
in Active
Markets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and marketable securities held in Trust Account
|
|
$
|
175,040,510
|
|
|
$
|
175,040,510
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
$
|
8,925,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,925,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability – Private Placement Warrants
|
|
$
|
6,273,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,273,000
|
|
Level 3 financial liabilities consist of the Public Warrant and Private
Placement Warrant liability for which there is little or no current market for these securities such that the determination of fair value
requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy
are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.
The
Company utilizes a Monte Carlo simulation model to value the warrants at each reporting period, with changes in fair value recognized
in the statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a binomial
options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend
yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life
of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar
to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual
term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. However, inherent uncertainties
are involved. If factors or assumptions change, the estimated fair values could be materially different.
PMV CONSUMER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 10—FAIR VALUE MEASUREMENTS (CONT.)
The
aforementioned warrant liabilities are not subject to qualified hedge accounting. There were no transfers between levels within the
fair value hierarchy during the quarter ended June 30, 2021.
The
following table provides quantitative information regarding Level 3 fair value measurements:
|
|
As of
June 30,
2021
|
|
|
As of
December 31,
2020
|
|
Stock price
|
|
$
|
9.72
|
|
|
$
|
9.49
|
|
Strike price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Term (in years)
|
|
|
5.0
|
|
|
|
5.0
|
|
Volatility
|
|
|
22.99
|
%
|
|
|
25.00
|
%
|
Risk-free rate
|
|
|
0.07
|
%
|
|
|
0.54
|
%
|
Dividend yield
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
Probability of completing a Business Combination
|
|
|
70.00
|
%
|
|
|
70.00
|
%
|
The
following table presents the changes in the fair value of warrant liabilities:
|
|
Private
Placement
|
|
|
Public
|
|
|
Warrant
Liabilities
|
|
Fair value as of March 18, 2020 (inception)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Initial measurement on September 30, 2020(1)
|
|
|
6,027,000
|
|
|
|
8,837,500
|
|
|
|
14,864,500
|
|
Change in fair value recognized in earnings
|
|
|
246,000
|
|
|
|
87,500
|
|
|
|
333,500
|
|
Fair value as of December 31, 2020
|
|
|
6,273,000
|
|
|
|
8,925,000
|
|
|
|
15,198,000
|
|
Change in fair value recognized in earnings
|
|
|
61,500
|
|
|
|
175,000
|
|
|
|
236,500
|
|
Fair value as of March 31, 2021
|
|
|
6,334,500
|
|
|
|
9,100,000
|
|
|
|
15,434,500
|
|
Change in fair value recognized in earnings
|
|
|
(793,965
|
)
|
|
|
(1,137,500
|
)
|
|
|
(1,931,465
|
)
|
Fair value as of June 30, 2021
|
|
$
|
5,540,535
|
|
|
$
|
7,962,500
|
|
|
$
|
13,503,035
|
|
|
(1)
|
There
was no measurable difference in fair value between the date of our Initial Public Offering on September 24, 2020 and September 30, 2020.
|
NOTE
11—SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed
financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required
adjustment or disclosure in the unaudited condensed financial statements, other than the restatement discussed in Note 2.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References
in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to PMV Consumer
Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors,
and references to the “Sponsor” refer to PMV Consumer Acquisition Holdings Company, LLC. The following discussion and analysis
of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and
the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and uncertainties.
Special
Note Regarding Forward-Looking Statements
This
Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to
differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for
future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,”
“intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify
such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s
current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in the forward-looking statements. For information identifying important
factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to
the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange
Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website
at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We
are a special purpose acquisition company formed under the laws of the State of Delaware on March 18, 2020 for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar Business Combination with one or
more businesses. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location,
although we are currently focusing our search for target businesses in the consumer industry. We intend to effectuate our initial business
combination using cash from the proceeds of the IPO and the sale of the Private Warrants, our capital stock, debt or a combination of
cash, stock and debt.
The
issuance of additional shares of our stock in a business combination:
|
●
|
may significantly reduce
the equity interest of our stockholders;
|
|
|
|
|
●
|
may subordinate the rights
of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of
common stock;
|
|
|
|
|
●
|
will likely cause a change
in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present
officers and directors; and
|
|
|
|
|
●
|
may adversely affect prevailing
market prices for our securities.
|
Similarly,
if we issue debt securities or otherwise incur significant indebtedness, it could result in:
|
●
|
default and foreclosure
on our assets if our operating revenues after a business combination are insufficient to pay our debt obligations;
|
|
|
|
|
●
|
acceleration of our obligations
to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants
that required the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation
of that covenant;
|
|
|
|
|
●
|
our immediate payment of
all principal and accrued interest, if any, if the debt security is payable on demand; and
|
|
|
|
|
●
|
our inability to obtain
additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing
while such security is outstanding.
|
Results
of Operations
We
have neither engaged in any operations nor generated any revenues to date. Our only activities through June 30, 2021, were organizational
activities, those necessary to prepare for the IPO, described below, and searching for a target business with which to complete a Business
Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate
non-operating income in the form of interest income on marketable securities held after the IPO. 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.
For the three and six months
ended June 30, 2021, we had a net income of $1,749,188 and $1,328,356, respectively, which consists of interest income on marketable
securities held in the Trust Account of $1,954 and $35,024, respectively, and a fair value adjustment on derivative liabilities of $1,931,465
and $1,694,965, respectively, offset by operating costs of $184,231 and $401,633, respectively. For the period March 18, 2020 (inception)
through March 31, 2020 and June 30, 2020 we had a net loss of $525, which consisted of formation costs.
Liquidity
and Capital Resources
On
September 24, 2020, we consummated the IPO of 17,500,000 Units at a price of $10.00 per Unit, generating gross proceeds of $175,000,000.
Simultaneously with the closing of the IPO, we consummated the sale of 6,150,000 Private Warrants to our Sponsor at a price of $1.00
per warrant, generating gross proceeds of $6,150,000.
Following
the IPO and the sale of the Private Warrants, a total of $175,000,000 was placed in the Trust Account. We incurred $9,957,390 in offering
costs, consisting of $3,500,000 of underwriting fees, $6,125,000 of deferred underwriting fees and $507,390 of other offering costs,
of which $175,000 was offset with a credit paid by the Underwriter.
As
of June 30, 2021, we had marketable securities held in the Trust Account of $175,075,533 (including $75,533 of interest income) consisting
of shares of a money market fund that invests primarily of U.S. treasury bills with a maturity of 180 days or less. Interest income on
the balance in the Trust Account may be used by us to pay taxes. Through June 30, 2021, we had not withdrawn any interest earned on the
Trust Account.
We
intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust
Account (less income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole
or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working
capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As
of June 30, 2021, we had cash of $1,626,583 held outside the Trust Account. We intend to use the funds held outside the Trust Account
primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and
from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents
and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
For
the six months ended June 30, 2021, cash used in operating activities was $378,645. Net income of $1,328,356 was affected by interest
earned on marketable securities held in the Trust Account of $35,023, a change in fair value of derivative warrant liabilities of $1,694,965,
and net decrease of changes in operating assets and liabilities of $22,987.
In
order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain
of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business
Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the
working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for
such repayment. Up to $1,500,000 of such loans may be convertible into warrants identical to the Private Warrants, at a price of $1.00
per warrant at the option of the lender.
We
do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However,
if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination
are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business
Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated
to redeem a significant number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional
equity securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws,
we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our
Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the
Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing
in order to meet our obligations.
Going Concern
In connection with the Company’s assessment
of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company
is unable to complete a Business Combination by September 24, 2022, then the Company will cease all operations except for the purpose
of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability
to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required
to liquidate after September 24, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date.
Off-Balance
Sheet Arrangements
We
did not have any off-balance sheet arrangements as of June 30, 2021.
Contractual
Obligations
We
do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement
to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. We
began incurring these fees on September 24, 2020 and will continue to incur these fees monthly until the earlier of the completion of
the Business Combination and our liquidation.
The
underwriters are entitled to deferred fee of $0.35 per Unit, or $6,125,000. The deferred fee will be forfeited by the underwriters solely
in the event that we fail to complete a Business Combination within the required time period, subject to the terms of the underwriting
agreement.
Critical
Accounting Policies
The
preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported.
Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Warrant
Liability
We
account for the warrants issued in connection with our IPO in accordance with the guidance contained in ASC 815 under which the warrants
do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities
at their fair value and adjust 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 estimated using a Monte Carlo simulation approach.
Class
A Common Stock Subject to Possible Redemption
We
account for common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”)
Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability
instrument and is measured at fair value.
Conditionally redeemable common stock (including
common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within our control) is classified as temporary equity. Changes in redemption value are reflected in additional
paid in capital, or in the absence of additional capital, in accumulated deficit. At all other times, common stock is classified as stockholders’
equity.
Our Class A common stock features certain redemption
rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, at March 31,
2021, 17,500,000 Class A common shares subject to possible redemption, respectively, are presented at redemption value as temporary equity,
outside of the stockholders’ equity section of our condensed balance sheets.
Net
Income (Loss) per Common Share
Net income (loss) per common share is computed
by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. The Company has not
considered the effect of warrants to purchase 14,900,000 shares of Class A common stock that were sold in the Initial Public Offering
and the private placement in the calculation of diluted income (loss) per share, since the average market price of the Company’s
Class A common stock for the three and nine months ended September 30, 2021 was below the Warrants’ $11.50 exercise price. As a
result, diluted income (loss) per common share is the same as basic income (loss) per common share for the period presented.
Recent
Accounting Standards
Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material
effect on our condensed financial statements.