The accompanying notes are an integral
part of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Note 1 — Organization and Business Operation
LightJump Acquisition Corporation (the
“Company”) a newly organized blank check company incorporated as a Delaware company on July 28, 2020. The Company was
formed for the purpose of acquiring, merging with, engaging in capital stock exchange with, purchasing all or substantially all
of the assets of, engaging in contractual arrangements, or engaging in any other similar business combination with a single operating
entity, or one or more related or unrelated operating entities operating in any sector (“Business Combination”). The
Company has not selected any specific business combination target and the Company has not, nor has anyone on its behalf, initiated
any substantive discussions, directly or indirectly, with any business combination target with respect to the Business Combination.
As of September 30, 2020, the Company had
not commenced any operations. All activity for the period from July 28, 2020 (inception) through September 30, 2020 relates to
the Company’s formation and the proposed initial public offering (“Initial Public Offering” or “IPO”),
described below. The Company will not generate any operating revenues until after the completion of its Initial Business Combination,
at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from
the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is LightJump
One Founders, LLC, a Delaware limited liability company (the “Sponsor”).
Subsequent to September 30, 2020, the registration
statement for the Company’s IPO was declared effective by the U.S. Securities and Exchange Commission (the “SEC”)
on January 8, 2021 (the “Effective Date”). On January 12, 2021, the Company consummated the IPO of 12,000,000 units
(the “Units” and, with respect to the common stock included in the Units being offered, the “public share”,
the warrants included in the Units, the “public warrants” and the rights included in the Units, the “rights”)),
at $10.00 per Unit, generating gross proceeds of $120,000,000, which is discussed in Note 3.
Simultaneously with the closing of the
IPO, the Company’s Sponsor purchased an aggregate of 3,850,000 warrants at a price of $1.00 per warrant, for an aggregate
purchase price of $3,850,000, in a private placement, which is discussed in Note 4.
In connection with the IPO, the underwriters
were granted a 45-day option from the date of the prospectus (the “Over-Allotment Option”) to purchase up to 1,800,000
additional units to cover over-allotments (the “Over-Allotment Units”), if any. On January 15, 2021, the underwriters
purchased 1,800,000 Over-Allotment Units fully exercising the Over-Allotment Option. The Over-Allotment Units were sold at an offering
price of $10.00 per Over-Allotment Unit, generating additional gross proceeds of $18,000,000 to the Company. In addition, the Company’s
sponsor purchased an aggregate of 360,000 warrants at a price of $1.00 per warrant, for an aggregate purchase price of $360,000.
Transaction costs of the IPO amounted to $3,380,637
consisting of $2,760,000 of underwriting discount and $620,637 of other offering costs.
Following
the closing of the IPO on January 12, 2021, $120,360,000 (approximately $10.00 per Unit) from net offering proceeds of the
sale of the Units in the IPO and the sale of the Private Warrants was placed in a trust account (the “Trust
Account”). Following the closing of the over-allotment option on January 15, 2021, and including the amount from the
IPO, an aggregate amount of $138,000,000 was placed in the Company’s trust account established in connection with the
IPO. The proceeds held in the Trust Account will be invested in U.S. government securities, with a maturity of 180 days or
less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only
in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account
that may be released to the Company to pay its tax obligations, the proceeds from the IPO will not be released from the Trust
Account until the earlier of: (a) the completion of the Company’s initial business combination, (b) the redemption of
the Company’s public shares if the Company is unable to complete its initial business combination within 18 months from
the closing of the IPO.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, 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 one or more
Initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as
defined below) (excluding the taxes payable on interest earned and less any interest earned thereon that is released for taxes)
at the time of the agreement to enter into the Initial Business Combination. However, the Company will only complete a Business
Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or
otherwise acquires an interest in the target sufficient for it not to be required to register as an investment company under the
Investment Company Act 1940, as amended (the “Investment Company Act”).
In
connection with any proposed initial Business Combination, the Company will either (1) seek stockholder approval of such
initial Business Combination at a meeting called for such purpose at which public stockholder may seek to convert their public
shares, regardless of whether they vote for or against the proposed business combination or don’t vote at all, into their
pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide its public
stockholder with the opportunity to sell their public shares to the Company by means of a tender offer (and thereby avoid the
need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust
account (net of taxes payable), in each case subject to the limitations described herein.
If
the Company determines to engage in a tender offer, such tender offer will be structured so that each stockholder may tender all
of his, her or its shares rather than some pro rata portion of his, her or its shares. The decision as to whether the Company
will seek stockholder approval of a proposed business combination or will allow stockholder to sell their shares to the Company
in a tender offer will be made by the Company, solely in the Company’s discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder
approval. If the Company determines to allow stockholder to sell their shares to the Company in a tender offer, it will file tender
offer documents with the SEC which will contain substantially the same financial and other information about the initial business
combination as is required under the SEC’s proxy rules.
The
common stock subject to redemption is recorded at a redemption value and classified as temporary equity upon the completion of
the IPO, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities
from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets
of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority
of the issued and outstanding 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 Amended and Restated Certificate of Incorporation (the “Amended and Restated
Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer
documents with the SEC prior to completing a Business Combination.
If,
however, stockholder approval of the transactions 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. Additionally, each Public stockholder may elect to redeem their Public Shares
irrespective of whether they vote for or against the proposed transaction. .
Notwithstanding
the foregoing redemption rights, if the Company seeks stockholder approval of its initial business combination and the Company
does not conduct redemptions in connection with its initial business combination pursuant to the tender offer rules, the Amended
and Restated 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” (as defined under Section 13
of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares
sold in this IPO, without the Company’s prior consent.
The
Company’s sponsor, officers and directors (the “initial stockholder”) have agreed not to propose any amendment
to Amended and Restated Certificate of Incorporation that would affect the Company’s public stockholder’s ability
to convert or sell their shares to the Company in connection with a business combination as described herein or affect the substance
or timing of our obligation to redeem 100% of its public shares if the Company does not complete a business combination within
18 months from the closing of the IPO (the “Combination Period”) unless the Company provides its public stockholder
with the opportunity to convert their shares of common stock upon the approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account, including interest not previously released to the
Company but net of franchise and income taxes payable, divided by the number of then outstanding public shares.
If
the Company is unable to complete its initial 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 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including any interest not previously released to the Company (net of taxes
payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the Company’s remaining stockholder and its board of directors, dissolve and liquidate, subject (in the case of (ii)
and (iii) above) to the Company’s obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law. The Company cannot assure you that it will have funds sufficient to pay or provide for
all creditors’ claims.
The
Company’s initial stockholder agreed to waive their rights to liquidating distributions from the Trust Account with respect
to any founder shares held by them if the Company fails to complete its initial business combination within the Combination Period.
However, if the initial stockholder acquires public shares in or after the IPO, they will be entitled to liquidating distributions
from the Trust Account with respect to such public shares if the Company fails to complete a Business Combination during the Combination
Period.
Emerging
Growth Company
The
Company is an “emerging growth company”, as defined in Section 2(a) of the Securities Act of 1933, as amended,
(the “Securities Act”), as modified by the Jumpstart Business Startups Act of 2012, ( the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive
compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of
the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until
those standards would otherwise apply to private companies. The Company intends to take advantage of the benefits of this extended
transition period.
Note
2 — Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the
instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote
disclosures normally included in financial statements prepared in accordance with US 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 accruals, which are necessary for a fair presentation of the financial position, operating results and
cash flows for the period presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s final prospectus
for its IPO as filed with the SEC on January 12, 2021, as well as the Company’s Current Reports on Form 8-K, as
filed with the SEC on January 19, 2021. The interim results for the period from July 28, 2020 (inception) through September 30,
2020 are not necessarily indicative of the results to be expected for the period ending December 31, 2020 or for any future
periods.
Use
of Estimates
The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Deferred
Offering Costs
Deferred
offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are
directly related to the IPO and that will be charged to stockholder’s equity upon the completion of the IPO. Offering costs
amounting to $3,380,637 were charged to stockholder’s equity upon the completion of the IPO and exercise of overallotment
(see Note 1). As of September 30, 2020,
there was $161,484 of costs, classified as deferred offering costs, in the accompanying unaudited condensed balance sheet.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these
accounts and management believes the Company is not exposed to significant risks on such accounts.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities approximates the carrying amounts represented in the accompanying balance
sheet, primarily due to their short-term nature.
Net
Loss Per Common Share
Net
loss per share is computed by dividing net loss by the weighted average number of common stock outstanding during the period,
excluding common stock subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 450,000 shares,
after giving retroactive effect to the share dividend described in Note 8, that are subject to forfeiture if the over-allotment
option is not exercised by the underwriters (see Note 7). As of September 30, 2020, the Company did not have any dilutive securities
and other contracts that could, potentially, be exercised or converted into shares and then share in the earnings of the Company.
As a result, diluted loss per share is the same as basic loss per share for the periods presented.
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB 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. There were no unrecognized tax benefits as of September
30, 2020. The Company’s management determined that the United States is the Company’s only major tax jurisdiction.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were
accrued for the payment of interest and penalties for the period from July 28, 2020 (inception) through September 30, 2020. The
Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The
provision for income taxes was deemed to be immaterial for the period ending September 30, 2020.
Recent
Accounting Pronouncements
Management
does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements.
Risks
and Uncertainties
Management
is currently evaluating 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 financial statements. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Note
3 — Initial Public Offering
Pursuant
to the IPO, the Company sold 12,000,000 Units, (at a price of $10.00 per Unit. Each Unit consists of one share of Common Stock,
par value $0.0001 per share one-half of one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles
the holder to purchase one share of Common Stock at a price of $11.50 per whole share subject to adjustment as described in the
prospectus. Each whole warrant will become exercisable 30 days after the completion of the initial Business Combination and will
expire five years after the completion of the Initial Business Combination, or earlier upon redemption or liquidation.
On
January 15, 2021, the Company sold an additional 1,800,000 units pursuant to the underwriters’ over-allotment option granted
in connection with the Company’s IPO. The additional units were sold at $10.00 per unit resulting in additional gross proceeds
to the Company of $18 million (see Note 8).
Note
4 — Private Placement
Simultaneously
with the closing of the IPO, the Sponsor purchased an aggregate of 3,850,000 warrants at a price of $1.00 per warrant
($3,850,000 in the aggregate), in a private placement. The proceeds from the private placement of the Private Warrants were added
to the proceeds of the IPO and placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company,
as trustee. If the Company does not complete an initial business combination within 18 months from January 12, 2021, the proceeds
from the sale of the Private Warrants will be included in the liquidating distribution to the Company’s public stockholders
and the Private Warrants will be worthless (see Note 7). On January 15, 2021, pursuant to the exercise of over-allotment, the
Company’s Sponsor purchased 360,000 warrants at a price of $1.00 per warrant, for an aggregate purchase price
of $360,000 (Note 8).
Note
5 — Related Party Transactions
Founder
Shares
In
September , 2020, the Sponsor paid $25,000, or approximately $0.009 per share, to cover certain offering costs in consideration
for 2,875,000 shares of common stock, par value $0.0001 (the “Founder Shares”). On January 11, 2021, the Company effected
a stock dividend of 0.2 shares for each share outstanding (the “Dividend”), resulting in there being an aggregate
of 3,450,000 Founder Shares outstanding. All shares and associated amounts have been retroactively restated to reflect the stock
dividend. Up to 450,000 Founder Shares are subject to forfeiture to the extent that the over-allotment option is not exercised
in full by the underwriters. In connection with the underwriters’ full exercise of their over-allotment option on January
15, 2021, the 450,000 founder shares were no longer subject to forfeiture.
The
founders’ shares were placed into an escrow account maintained in New York, New York by Continental Stock Transfer &
Trust Company, acting as escrow agent. Subject to certain limited exceptions, these shares will not be transferred, assigned,
sold or released from escrow (subject to certain limited exceptions set forth below) (i) with respect to 50% of such shares,
for a period ending on the earlier of the one-year anniversary of the date of the consummation of an initial Business Combination
and the date on which the closing price of the common stock equals or exceeds $12.50 per share (as adjusted for share splits,
share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period following
the consummation of the initial Business Combination and (ii) with respect to the remaining 50% of such shares, for a period
ending on the one-year anniversary of the date of the consummation of the initial Business Combination, or earlier, in either
case, if, subsequent to our initial Business Combination, the Company consummates a liquidation, merger, stock exchange or other
similar transaction which results in all of the stockholders having the right to exchange their shares of common stock for cash,
securities or other property.
Promissory
Note — Related Party
An
affiliate of the Company’s chief executive officer has agreed to loan the Company an aggregate of up to $150,000 to cover
expenses related to the IPO pursuant to a promissory note (the “Note”). This loan is non-interest bearing and
payable on the earlier of July 31, 2021 or the completion of the IPO. As of September 30, 2020, the Company has not borrowed
any funds under the promissory note.
Working
Capital Loans
In
order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans. In
the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account
to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
Except
for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest,
or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into private placement
warrants at a price of $1.00 per warrant. As of September 30, 2020, the Company had no borrowings under the Working Capital Loans.
Administrative
Support Agreement
Commencing
on the date of the final prospectus, the Company has agreed to pay the Sponsor a total of $10,000 per month for office space,
secretarial and administrative services. Upon completion of the initial Business Combination or the Company’s liquidation,
the Company will cease paying these monthly fees.
Note
6 — Commitments & Contingencies
Registration
Rights
The
holders of the Company’s insider shares issued and outstanding on the date of this prospectus, as well as the holders of
the private warrants (and underlying securities) will be entitled to registration rights pursuant to an agreement to be signed
prior to or on the effective date of this offering. The holders of a majority of these securities are entitled to make up to two
demands that the Company registers such securities. The holders of the majority of the insider shares can elect to exercise these
registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released
from escrow. The holders of a majority of the private warrants (and underlying securities) can elect to exercise these registration
rights at any time after the Company consummates a business combination. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the Company’s consummation of a business
combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the date of the IPO to purchase up to 1,800,000 additional Units to cover
over-allotments, if any, at $10.00 per Unit. On January 15, 2021, the underwriters fully exercised the Over-Allotment Option.
On
January 12, 2021, the Company paid a fixed underwriting discount of $0.2 per unit, or $2.4 million in the aggregate, at the closing
of the IPO. On January 15, 2021, the Company paid another fixed underwriting discount of $0.3 million pursuant to the underwriters’
over-allotment option exercised in full.
Business
Combination Marketing Agreement
Additionally,
the Company has engaged EarlyBirdCapital as an advisor in connection with our business combination to assist us in holding meetings
with our stockholder to discuss the potential business combination and the target business’ attributes, introduce us to
potential investors that are interested in purchasing our securities in connection with our initial Business Combination, assist
us in obtaining stockholder approval for the business combination and assist us with our press releases and public filings in
connection with the business combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation
of our initial Business Combination in an amount equal to 3.5% of the gross proceeds of this IPO. Additionally, the Company will
pay EarlyBirdCapital a cash fee equal to 1.0% of the total consideration payable in the proposed business combination if EarlyBirdCapital
introduces us to the target business with which we complete a business combination; provided that the foregoing fee will not be
paid prior to the date that is 90 days from the effective date of the registration statement.
Representative
Shares
On
October 1, 2020, the Company issued to designees of EarlyBirdCapital Inc. the 120,000 representative shares for nominal consideration.
The Company will account for the representative shares as an offering cost of the Proposed Offering, with a corresponding credit
to stockholder’ equity. The holders of the representative shares have agreed not to transfer, assign or sell any such shares
without the Company’s prior consent until the completion of its initial Business Combination. In addition, the holders of
the representative shares have agreed (i) to waive their conversion rights (or right to participate in any tender offer)
with respect to such shares in connection with the completion of our initial Business Combination and (ii) to waive their
rights to liquidating distributions from the trust account with respect to such shares if the Company fails to complete an initial
Business Combination within 18 months from the closing of this IPO.
The
representative shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days
immediately following the date of the effectiveness of the registration statement of which this prospectus forms a part pursuant
to Rule 5110(g)(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(g)(1), these securities will not be sold during the IPO, or
sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction
that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the
effective date of the registration statement of which this prospectus forms a part or commencement of sales of the public offering,
except to any underwriter and selected dealer participating in the IPO and their bona fide officers or partners, provided that
all securities so transferred remain subject to the lockup restriction above for the remainder of the time period.
Note
7 — Stockholder’s Equity
Preferred
Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 and
with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s
board of directors. As of September 30, 2020, there was no preferred stock issued or outstanding.
Common
Stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per
share. Holders are entitled to one vote for each share of common stock. After giving retroactive effect to the stock dividend
described in Note 8, at September 30, 2020, there were 3,450,000 common stock issued and outstanding. Of the 3,450,000 shares
of common stock, an aggregate of up to 450,000 shares are subject to forfeiture to the Company for no consideration to the
extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the initial stockholder
will collectively own 20% of the Company’s issued and outstanding common stocks after the IPO. In connection with the
underwriters’ full exercise of their over-allotment option on January 15, 2021, the 450,000 founder shares were no
longer subject to forfeiture.
Warrants —
The Public Warrants will become exercisable 30 days after the completion of a Business Combination. However, 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. Notwithstanding
the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is
not effective within a specified period following the consummation of our initial business combination, warrant holders may, until
such time as there is an effective registration statement and during any period when we 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. In the event of such cashless exercise, each holder would pay
the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing
(x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the
exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The
“fair market value” for this purpose will mean the average reported last sale price of the shares of common stock
for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary
of our completion of an initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The
Company may call the Public Warrants for redemption:
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon not less than 30 days’ prior written
notice of redemption (the “30-day redemption period”) to each warrant holder; and
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if, and only if, the reported last sale price of the
shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and
recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable
and ending on the third business day prior to the notice of redemption to warrant holders; and
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if, and only if, there is a current registration statement
in effect with respect to the shares of common stock underlying such warrants.
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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. In such event, each holder
would pay the exercise price by surrendering the warrants for that number of shares of stock equal to the quotient obtained by
dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between
the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value.
The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common
stock for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the
holders of warrants.
In 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 the 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 our board of directors, and in the case of any such
issuance to our sponsor, initial stockholder 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 60% of the total equity
proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of
the initial business combination (net of redemptions), and (z) the 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 the Company issues the additional shares of common stock or equity-linked securities.
The Private Warrants will be identical
to the Public Warrants underlying the Units being sold in the IPO, except that the Private Warrants, so long as they are held by
the Sponsor or their permitted transferees, (i) will not be redeemable by the Company, (ii) may be exercised for cash or on a cashless
basis, as described in the IPO, in each case so long as they are held by the initial purchasers or any of their permitted transferees.
If the Private Warrants are held by holders other than the initial purchasers or any of their permitted transferees, the Private
Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units
being sold in this offering.
Note 8 — Subsequent Events
The notes to the financial statements
include a discussion of material events, if any, which have occurred subsequent to September 30, 2020 (referred to as
“subsequent events”), up to the date these financial statements were issued. Management has evaluated the
subsequent events through this date and has concluded that, other than the events disclosed below, no other material
subsequent events have occurred that require additional adjustment or disclosure in the financial statements.
Subsequent to September 30, 2020,
the Company borrowed $125,000 under the Promissory Note and received advances from a related party in an aggregate amount of $170,000.
On October 1, 2020, the Company issued
to designees of EarlyBirdCapital Inc. the 120,000 representative shares for nominal consideration. The Company estimated the fair
value of the stock to be $1,200 based upon the price of the founder shares issued to the Sponsor and were treated as underwriters’
compensation and charged directly to stockholder’s equity.
On January 8, 2021, the registration statement
for the Company’s IPO was declared effective (the “Effective Date”).
On January 11, 2021, the Company effected
a stock dividend of 0.2 shares for each share outstanding, resulting in there being an aggregate of 3,450,000 Founder Shares
outstanding. All shares and associated amounts have been retroactively restated to reflect the stock dividend.
On January 12, 2021, the Company consummated
the IPO of 12,000,000 units (each, a “Unit” and collectively, the “Units”) at $10.00 per Unit, generating
gross proceeds of $120,000,000. Simultaneously with the closing of the IPO, the Company consummated the sale of 3,850,000 warrants
(the “Private Warrants), at a price of $1.00 per Private Warrant.
In connection with the IPO, the underwriters
were granted a 45-day option from the date of the prospectus (the “Over-Allotment Option”) to purchase up to 1,800,000
additional units to cover over-allotments (the “Over-Allotment Units”), if any. On January 15, 2021, the underwriters
purchased 1,800,000 Over-Allotment Units fully exercising the Over-Allotment Option. The Over-Allotment Units were sold at an offering
price of $10.00 per Over-Allotment Unit, generating additional gross proceeds of $18,000,000 to the Company. In addition, the Company’s
sponsor purchased an aggregate of 360,000 warrants at a price of $1.00 per warrant, for an aggregate purchase price of $360,000.