UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
(Mark One)
x ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2020
¨ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from
to
Commission file number: 001-39807
AMERICAS TECHNOLOGY ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
|
Cayman
Islands |
|
N/A |
(State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer
Identification Number)
|
|
16400 Dallas Pkwy #305
Dallas, TX
|
|
75248 |
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (303)
885-8688
Securities registered pursuant to Section 12(b) of the
Act:
|
Title
of Each Class: |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered: |
|
Ordinary
Shares, par value $0.0001 per share |
|
ATA |
|
The
New York Stock Exchange |
|
Redeemable
Warrants, each whole warrant exercisable for one Ordinary Share for
$11.50 per share |
|
ATA.WS |
|
The
New York Stock Exchange |
|
Units,
each consisting of one Ordinary Share and one-half of one
Redeemable Warrant |
|
ATA.U |
|
The
New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yes ¨
No x
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Exchange Act. Yes ¨ No x
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90
days. Yes x No ¨
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes x No ¨
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company or an emerging growth company. See
definition of “large accelerated filer,” “accelerated filer,
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
|
Large accelerated filer |
|
¨ |
|
Accelerated filer |
|
¨ |
| Non-accelerated
filer |
|
x |
|
Smaller reporting company |
|
x |
| Emerging
growth company |
|
x |
|
|
|
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ¨
Indicate by check mark whether the registrant has filed a report on
and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit
report. ¨
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange
Act). Yes x No ¨
The registrant’s shares were not listed on any exchange and had no
value as of the last business day of the second fiscal quarter of
2020. The registrant’s units begin trading on The New York Stock
Exchange on December 15, 2020 and the registrant’s ordinary shares
and warrants began trading on The New York Stock Exchange on
January 28, 2021. The aggregate market value of the units
outstanding, other than shares held by persons who may be deemed
affiliates of the registrant, computed by reference to the closing
price for the units on December 31, 2020, as reported on The NASDAQ
Capital Market was $118,220,000.
As of March 30, 2021 there were 14,500,000 ordinary shares, par
value $0.0001 per share (“Ordinary Shares”), of the registrant
issued and outstanding.
TABLE OF CONTENTS
EXPLANATORY NOTE
This Amendment No. 1 (this “Amendment”) to the Annual Report on
Form 10-K amends the Annual Report on Form 10-K of Americas
Technology Acquisition Corp. (“we,” “us,” “our,” or the “Company”)
for the fiscal year ended December 31, 2020, as filed with the
Securities and Exchange Commission (“SEC”) on March 31, 2021 (the
“Original Filing”).
Restatement Background
On April 12, 2021, the staff of the Securities and Exchange
Commission (the “SEC Staff”) issued a public statement entitled
“Staff Statement on Accounting and Reporting Considerations for
Warrants issued by Special Purpose Acquisition Companies (“SPACs”)”
(the “SEC Staff Statement”). In the SEC Staff Statement, the SEC
Staff expressed its view that certain terms and conditions common
to SPAC warrants may require the warrants to be classified as
liabilities rather than equity on a SPAC’s balance sheet. Since
their issuance on December 17, 2020, our warrants have been
accounted for as equity within our balance sheet. After discussion
and evaluation, including with our registered public accounting
firm and our audit committee, and taking into consideration the SEC
Staff Statement, we have concluded that our private warrants should
be presented as liabilities with subsequent fair value
remeasurement.
Therefore, the Company, in consultation with its audit committee,
concluded that its previously issued financial statements for the
period from September 8, 2020 (inception) through December 31, 2020
(the “Affected Period”) should be restated because of the change in
the guidance around accounting for certain of our outstanding
warrants to purchase common stock and should no longer be relied
upon. Specifically, on May 21, 2021, the Company's audit committee,
based on the recommendation of, and after consultation with, the
Company’s management, concluded that the Company’s audited
financial statements for the year ended December 31, 2020, as
reported in the Company's Annual Report on Form 10-K filed on March
31, 2021, should no longer be relied upon due to changes required
to reclassify the Company’s outstanding private warrants as
liabilities. Similarly, the related press releases, Report of
Independent Registered Public Accounting Firm dated March 31, 2021
on the financial statements as of December 31, 2020 and for the
year ended December 31, 2020, and the stockholder communications,
investor presentations or other communications describing relevant
portions of the Company's financial statements for this period
should no longer be relied upon.
Historically, our warrants were reflected as a component of equity
as opposed to liabilities on the balance sheets and the statements
of operations and did not include the subsequent non-cash changes
in estimated fair value of the warrants, based on our application
of Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) Topic 815-40, Derivatives and
Hedging, Contracts in Entity’s Own Equity (“ASC 815-40”). The
views expressed in the SEC Staff Statement were not consistent with
the Company’s historical interpretation of the specific provisions
within its warrant agreement and the Company’s application of ASC
815-40 to the warrant agreement. We reassessed our accounting for
the warrants issued on December 17, 2020, in light of the SEC
Staff’s published views. Based on this reassessment, we determined
that the private warrants should be classified as liabilities
measured at fair value upon issuance, in fair value reported in our
Statement of Operations for each reporting period.
Items Amended
We are filing this Amendment to amend the disclosures in the Risk
Factors under Item 1A, the Management’s Discussion and Analysis of
Financial Condition and Results of Operation described in Item 7,
Financial Statements and Supplementary Data described in Item 8 and
Controls and Procedures described in Item 9A, in the Original
Filing to give effect to the change in accounting for the
warrants.
The change in accounting for the private warrants did not have any
impact on our liquidity, cash flows, revenues or costs of operating
our business and the other non-cash adjustments to the Financial
Statements in the Affected Period included in Item 8, Financial
Statements and Supplementary Data in this filing. The change in
accounting for the private warrants does not impact the amounts
previously reported for the Company’s cash and cash equivalents,
investments held in the trust account, operating expenses or total
cash flows from operations for any of these periods.
In addition, new certifications by the Company’s principal
executive officer and principal financial officer are filed as
exhibits (in Exhibits 31 and 32) to this Amendment.
Except as described above, this Amendment does not amend, update or
change any other items or disclosures contained in the Original
Filing, and accordingly, this Amendment does not reflect or purport
to reflect any information or events occurring after the original
filing date or modify or update those disclosures affected by
subsequent events. Accordingly, this Amendment should be read in
conjunction with the Original Filing and the Company’s other
filings with the SEC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report, including, without limitation, statements under the
heading “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” includes forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934, or the Exchange Act. These forward-looking statements can be
identified by the use of forward-looking terminology, including the
words “believes,” “estimates,” “anticipates,” “expects,” “intends,”
“plans,” “may,” “will,” “potential,” “projects,” “predicts,”
“continue,” or “should,” or, in each case, their negative or other
variations or comparable terminology. There can be no assurance
that actual results will not materially differ from expectations.
Such statements include, but are not limited to, any statements
relating to our ability to consummate any acquisition or other
business combination and any other statements that are not
statements of current or historical facts. These statements are
based on management’s current expectations, but actual results may
differ materially due to various factors, including, but not
limited to:
|
· |
our
ability to complete our initial business combination; |
|
· |
our
success in retaining or recruiting, or changes required in, our
officers, key employees or directors following our initial business
combination; |
|
· |
our
officers and directors allocating their time to other businesses
and potentially having conflicts of interest with our business or
in approving our initial business combination, as a result of which
they would then receive expense reimbursements; |
|
· |
our
potential ability to obtain additional financing to complete our
initial business combination; |
|
· |
the ability of our officers and
directors to generate a number of potential acquisition
opportunities; |
|
· |
our
pool of prospective target businesses; |
|
· |
the
ability of our officers and directors to generate a number of
potential acquisition opportunities; |
|
· |
our
public securities’ potential liquidity and trading; |
|
· |
the
lack of a market for our securities; |
|
· |
the
use of proceeds not held in the trust account or available to us
from interest income on the trust account balance; or |
|
· |
our
financial performance. |
The forward-looking statements contained in this report are based
on our current expectations and beliefs concerning future
developments and their potential effects on us. Future developments
affecting us may not be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties
(some of which are beyond our control) or other assumptions that
may cause actual results or performance to be materially different
from those expressed or implied by these forward-looking
statements. Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected
in these forward-looking statements. We undertake no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
may be required under applicable securities laws.
Unless otherwise stated in this Annual Report on Form 10-K,
references to:
|
· |
“we,” “us” or “our company”
refers to Americas Technology Acquisition Corp., a Cayman Islands
exempted company; |
|
· |
“initial shareholders” refers to
the holders of the insider shares, including all of our officers
and directors to the extent they hold such shares; |
|
· |
“insider shares” refers to the
2,875,000 ordinary shares held by our initial shareholders prior to
our initial public offering; |
|
· |
“management” or our “management
team” are to our officers and directors; |
|
· |
“private warrants” refer to the
warrants we are selling privately to our sponsor and
EarlyBirdCapital upon consummation of our initial public
offering; |
|
· |
“sponsor” refers to ATAC Limited
Partnership, a limited partnership formed under the laws of the
state of Delaware; ATAC Holdings LLC is the general partner of our
sponsor; |
| |
· |
“Original
Filing” refers to our
Annual Report on Form 10-K for the fiscal year ended December 31,
2020, as filed with the Securities and Exchange Commission on March
31, 2021 |
| |
· |
“Amendment”
refers to this Amendment No. 1 to the Original
Filing |
| |
· |
“Original
Filing” refers to |
|
· |
“US Dollars” and “$” refer to
the legal currency of the United States; |
|
· |
“Companies Law” refers to the
Companies Law (2020 Revision) of the Cayman Islands, as the same
may be amended from time to time; and |
|
· |
the term “public shareholders”
means the holders of the ordinary shares which are being sold as
part of the units in our initial public offering, or “public
shares,” whether they are purchased in the public offering or in
the aftermarket, including any of our initial shareholders to the
extent that they purchase such public shares (except that our
initial shareholders will not have conversion or tender rights with
respect to any public shares they own); |
PART I
BUSINESS
Overview
We are an early-stage Cayman Islands exempted company structured as
a blank check company for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or
similar business combination with one or more businesses, which we
refer to throughout this report as our initial business
combination. To date, our efforts have been limited to
organizational activities and activities related to our initial
public offering.
Initial Public Offering
On December 17, 2020, we consummated our initial public
offering of 11,500,000 units (the “units”). Each unit
consists of one ordinary share of the Company, par value $0.0001
per share (the “ordinary shares”), and one-half of one
warrant of the Company (“warrant”), with each whole warrant
entitling the holder thereof to purchase one ordinary share for
$11.50 per share. The units were sold at a price of $10.00 per
unit, generating gross proceeds to the Company of
$115,000,000.
Simultaneously with the closing of the initial public offering, we
completed the private sale of an aggregate of 5,450,000 warrants
(the “private placement warrants”), including 4,905,000
private placement warrants to ATAC Limited Partnership (our
“sponsor”) and 545,000 private placement warrants to
EarlyBirdCapital, Inc. (the “representative”), at a purchase price
of $1.00 per private placement warrant, generating gross proceeds
of $5,450,000.
A total of $116,150,000 of the proceeds from the initial public
offering and the sale of the private placement warrants, was placed
in a U.S.-based trust account (the “trust account”) maintained by
Continental Stock Transfer & Trust Company, acting as
trustee.
It is the job of our sponsor and management team to complete our
initial business combination. Our management team is led by Jorge
Marcos, our Chief Executive Officer, Juan Pablo Visoso, our Chief
Financial Officer and Lisa Harris, our Chairman, who have many
years of experience investing in ventures and building companies
with operations. We must complete our initial business combination
by December 17, 2021, 12 months from the closing of our
initial public offering, unless otherwise extended. Pursuant to the
terms of our amended and restated certificate of incorporation and
the trust agreement entered into between us and Continental Stock
Transfer & Trust Company, the time available for us to
consummate our initial business combination may be extended if our
sponsor or its affiliates or designees, upon five days advance
notice prior to the applicable deadline, deposit into the trust
account $1,150,000 ($0.10 per share in either case), on or prior to
the date of the applicable deadline, for each of the available
three month extensions providing a total possible business
combination period of 18 months at a total payment value of
$2,300,000 if the underwriters’ over-allotment option is exercised
in full. Any such payments would be made in the form of
non-interest bearing loans. If our initial business combination is
not consummated by December 17, 2021 (or June 17, 2021 if we extend
the time period to consummate our initial business combination by
the full amount of time), then our existence will terminate, and we
will distribute all amounts in the trust account.
Initial Business Combination
While we may pursue an initial business combination target in any
business, industry or geographical location, since our initial
public offering, we have focused our search on targets operating in
the TMT verticals. We leverage the substantial proprietary deal
sourcing, investing and operating expertise of our management team
and strategic advisors, including their relationships with leading
business leaders and entrepreneurs.
In addition, we leverage the deep relationships and long-standing
experience that our management team and strategic advisors command
in the global private equity asset management industry. We believe
that this combination of relationships and experience puts us in an
excellent position to locate potential targets, particularly those
owned by private equity funds.
Business Strategy and Acquisition Criteria
Based on both our management team’s experience, combined with the
current trends they are observing, we have developed the following
strategy and set of criteria we utilize in our pursuit of a
business.
Businesses with robust local presence, clear expansion
opportunity in the Americas, and significant US Dollar-denominated
revenue, with a broad focus across all TMT verticals. We see
strong secular tailwinds in these sectors that we believe provide
the necessary runway for general industry growth and profitability
over the next decade. As global commerce becomes more globally
interconnected, we believe a larger portion of economic
participation will take place adjacent to or within the different
verticals.
Initial focus on pockets of ultra-high growth within mobile and
digital technologies, which are part of strong transformational
technological trends that have accelerated due, in part, to the
COVID-19 pandemic. Specific verticals include, but are not limited
to, cloud infrastructure, artificial intelligence, mobile
applications, digital advertising, digital content, media, fintech,
e-commerce and mobility. Businesses throughout North America and
South America are now looking to channel their commercial
activities through the mobile ecosystem, leading to the emergence
of so-called “Super Apps”, and intend to capitalize on the
increased ubiquity of the smartphone, as well as now-prevalent and
improving internet connectivity. Incumbent players are actively
looking for solutions that allow them to drive engagement and
customer behaviors, preferably through proprietary channels,
instead of having to go through the incumbent ad giants. Our focus
does not limit us to the TMT sector, as we believe there are ample
opportunities that capitalize on these trends within other sectors
such as healthcare, retail, financial services, real estate,
hospitality, agribusiness and others that rely on technology-driven
solutions to improve their business models.
Established, well run and profitable companies operating in a
range of services and markets currently unpenetrated by global
giants. Well-capitalized players are positioned to use the
slowdown as an opportunity to strengthen their long-term strategic
positions. We are prioritizing companies that have visible
opportunities and deploy capital in this environment to make
acquisitions or accelerate organic growth opportunities.
A focus towards recurring contractual revenue and a clear
roadmap to increased user monetization and monetization engine
scalability. This is enabled by “sticky” relationships
with customers, which in turn are derived from a superior customer
experience and high switching costs, among other competitive
advantages. Most sectors are facing uncertainties amid the COVID-19
pandemic, but other businesses that enable the “new normal” have
benefitted. Growth businesses with strong value propositions and
innovative products, with opportunities to deploy capital at high
risk-adjusted returns, are of particular interest.
Proven high-growth trajectory, with potential for geographic
expansion to continue delivering growth and achieve
profitability within a reasonable timeframe. After dominating
initial markets, target companies should have an edge to expand
geographically to un-tapped or underserved regions where similar
needs exist.
Experienced management team. We intend to
consummate a business combination with a business that has an
experienced management team with a proven track record for
generating shareholder returns, producing corporate growth,
enhancing profitability, generating positive free cash flow, and
with an ability to clearly and confidently articulate the business
strategy and market opportunities to public market investors.
Management should also be experienced in successfully identifying,
transacting, and integrating acquisitions. Where necessary, we may
also look to complement and enhance the capabilities of the target
business’ management team by recruiting additional talent through
our network of contacts. This may include recruiting experienced
industry professionals to assist in our evaluation of the
opportunity and marketing of the initial business combination prior
to its completion, who may ultimately assume an ongoing role with
the combined company. While not a requirement, we would prefer
opportunities where members of the management team of the target
have experience as public company officers or other substantive
public market experience.
Sourced on a proprietary basis. We do not
expect to participate in broadly marketed processes, but rather
will aim to leverage our extensive network to source a proprietary
initial business combination. Notwithstanding the foregoing, we
would consider participating in a process that is focused primarily
on special purpose acquisition companies, where we would not
compete with a conventional initial public offering or private
equity acquisition, or where the target is at the tail end of a
strategic process in which other alternatives have been eliminated.
We would expect to compete in such processes on the strength of our
prior experience in closing business combinations, understanding of
the target’s industry, ability to add strategic value, or because
our company is most appropriately sized to the target.
Preparedness for the process and public markets. We are
seeking to acquire a business that has or can put in place, prior
to the closing of a business combination, the governance, financial
systems and controls and investor relations capabilities required
in the public markets.
Notwithstanding the foregoing, these criteria are not intended to
be exhaustive. Any evaluation relating to the merits of a
particular initial business combination may be based, to the extent
relevant, on these general guidelines as well as other
considerations, factors and criteria that our management may deem
relevant. In the event that we decide to enter into our initial
business combination with a target business that does not meet the
above criteria and guidelines, we will disclose that the target
business does not meet the above criteria in our shareholder
communications related to our initial business combination, which,
as discussed in this report, would be in the form of proxy
solicitation materials or tender offer documents that we would file
with the SEC.
Competitive Advantages
Experienced Management Team and Special
Advisors. Our management team and strategic advisors
have a substantial middle-market cross-border investment track
record and advisory experience, significant knowledge of both the
North and South American markets, access to proprietary deal flow
throughout the two continents, and strong relationships with
business leaders, entrepreneurs and investors. We believe their
backgrounds provide us with access to proprietary investment
opportunities and position us to successfully navigate local
business norms. In addition, members of management team have
significant prior experience in consummating merger and acquisition
transactions, including executing initial business combinations for
blank check companies, having already sponsored five special
purpose acquisition vehicles (four of which were done in
Italy).
We may also draw upon the services of Fifth Partners, an affiliate
of our sponsor and our Chief Executive Officer. Fifth Partners is a
private equity group located in Dallas, Texas. An active investment
partner, it provides network companies access to the people,
opportunities and capital needed to build sustainable enterprises.
Since its founding in 2015, Fifth Partners has deployed over $1.5
billion across various asset classes, including real estate and
energy. In addition to hard asset investing, Fifth Partners also
owns and operates multiple early- to mid-stage businesses.
Notwithstanding the foregoing, past performance of our management
team, advisors, Fifth Partners or their respective affiliates is
not a guarantee either (i) that we will be able to identify a
suitable candidate for our initial business combination or (ii) of
success with respect to any business combination we may
consummate.
Established Deal Sourcing Network and Personal
Contacts. We intend to maximize our
pipeline of potential target investments by proactively approaching
our extensive network of contacts, including private equity and
venture capital sponsors, family offices, executives of public and
private companies, merger and acquisition advisory firms,
investment banks, capital markets desks, lenders and other
financial intermediaries. We believe the prior investment
experience, transaction history and track record of our team, give
us a competitive advantage when sourcing potential initial business
combination opportunities.
Deal-making and Capital Markets Experience through all Market
Cycles. Our management team and strategic
advisors consists of seasoned dealmakers with experience in a wide
variety of industries, structures and market conditions, as well as
experienced equity and debt capital markets professionals. All have
worked in markets throughout the Americas as executives, principal
investors, and advisors, through different market cycles. Our
management team and strategic advisors apply the same disciplined
approach to acquire a business that they have used in connection
with their current advisory services and principal investment
activities.
Experience with Complex
Transactions. Members of our management
team and strategic advisors have a track record of completing
transactions that involve an element of complexity not well-served
by a competitive auction process and on educating counterparties
about the benefits of the special purpose acquisition company
structure and process. We believe that our management team’s and
strategic advisors’ experience with complex situations requiring
creative solutions is expected to lead to less competitive
transactions. Members of our management team and strategic advisors
also have a history of leveraging their relationship networks for
due diligence.
Initial Business Combination
NYSE rules require that we must consummate an initial business
combination with one or more operating businesses or assets with a
fair market value equal to at least 80% of the net assets held in
the trust account (excluding any taxes payable). If our Board of
Directors is not able to independently determine the fair market
value of our initial business combination, we will obtain an
opinion from an independent investment banking firm or another
independent valuation or appraisal firm that regularly provides
fairness opinions solely with respect to the satisfaction of such
criteria. While we consider it unlikely that our Board of Directors
will not be able to make such independent determination of fair
market value, it may be unable to do so if the board is less
familiar or experienced with the target company’s business, there
is a significant amount of uncertainty as to the value of the
company’s assets or prospects, including if such company is at an
early stage of development, operations or growth, or if the
anticipated transaction involves a complex financial analysis or
other specialized skills and the board determines that outside
expertise would be helpful or necessary in conducting such
analysis. Since any opinion, if obtained, would merely state that
the fair market value meets the 80% fair market value test, unless
such opinion includes material information regarding the valuation
of a target business or the consideration to be provided, it is not
anticipated that copies of such opinion would be distributed to our
shareholders. However, if required under applicable law, any proxy
statement that we deliver to shareholders and file with the SEC in
connection with a proposed transaction will include such
opinion.
We will structure our initial business combination so that the
post-transaction company in which our public shareholders own
shares will own or acquire 100% of the equity interests or assets
of the target business or businesses. We may, however, structure
our initial business combination such that the post-transaction
company owns or acquires less than 100% of such interests or assets
of the target business in order to meet certain objectives of the
target management team or shareholders or for other reasons, but we
will only complete such 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, or the Investment Company Act.
Even if the post-transaction company owns or acquires 50% or more
of the voting securities of the target, our shareholders prior to
the business combination may collectively own a minority interest
in the post-transaction company, depending on valuations ascribed
to the target and us in the business combination transaction. For
example, we could pursue a transaction in which we issue a
substantial number of new shares in exchange for all of the
outstanding capital stock, shares or other equity interests of a
target. In this case, we would acquire a 100% controlling interest
in the target. However, as a result of the issuance of a
substantial number of new shares, our shareholders immediately
prior to our initial business combination could own less than a
majority of our outstanding shares subsequent to our initial
business combination. If less than 100% of the equity interests or
assets of a target business or businesses are owned or acquired by
the post-transaction company, the portion of such business or
businesses that is owned or acquired is what will be taken into
account for purposes of NYSE’s 80% fair market value test. If the
business combination involves more than one target business, the
80% fair market value test will be based on the aggregate value of
all of the target businesses.
Our Business Combination Process
In evaluating a prospective target business, we will continue to
conduct a due diligence review which may encompass, among other
things, meetings with incumbent management and employees, document
reviews, interviews of customers and suppliers, inspections of
facilities, as well as reviewing financial and other information
made available to us and other reviews as we deem appropriate. We
may also retain consultants with expertise relating to a
prospective target business.
Fifth Partners may, from time to time, assist us in the
identification of assets or companies that may be appropriate
acquisition targets. While we may also draw upon Fifth Partners’
platforms, infrastructure, personnel, network and relationships to
provide access to deal prospects, along with any necessary
resources to aid in the identification and diligence of a target
for the initial business combination, Fifth Partners is not
obligated to identify any such target assets or companies or to
perform due diligence on any acquisition targets. Any such
activities are solely the responsibility of our management
team.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or
directors. In the event we seek to complete our initial business
combination with a company that is affiliated with our sponsor,
officers or directors, we, or a committee of independent directors,
will obtain an opinion from an independent investment banking firm
or another independent valuation or appraisal firm that regularly
provides fairness opinions that our initial business combination is
fair to our company from a financial point of view. In addition, we
have not contacted any of the prospective target businesses that
prior blank check companies with which our officers and directors
have been involved, and had considered and rejected. We do not
currently intend to contact any of such targets; however, we may do
so in the future if we become aware that the valuations,
operations, profits or prospects of such target business, or the
benefits of any potential transaction with such target business,
would be attractive.
Members of our management team directly and indirectly own our
securities following our initial public offering, and accordingly,
they have a conflict of interest in determining whether a
particular target business is an appropriate business with which to
effectuate our initial business combination. Further, each of our
officers and directors may have a conflict of interest with respect
to evaluating a particular business combination if the retention or
resignation of any such officers and directors was included by a
target business as a condition to any agreement with respect to our
initial business combination.
In order to minimize potential conflicts of interest which may
arise from multiple corporate affiliations, each of our officers
and directors has contractually agreed, pursuant to a written
agreement with us, until the earliest of a business combination,
our liquidation or such time as he ceases to be an officer or
director, to present to our company for our consideration, prior to
presentation to any other entity, any suitable business opportunity
which may reasonably be required to be presented to us, subject to
any pre-existing fiduciary or contractual obligations he might
have. Each of our directors and officers presently has, and in the
future any of our directors and our officers may have additional,
fiduciary or contractual obligations to other entities, including
other blank check companies, pursuant to which such officer or
director is or will be required to present acquisition
opportunities to such entity. Accordingly, subject to his or her
fiduciary duties under Cayman Islands law, if any of our officers
or directors becomes aware of an acquisition opportunity which is
suitable for an entity to which he or she has then current
fiduciary or contractual obligations, he or she will need to honor
his or her fiduciary or contractual obligations to present such
acquisition opportunity to such entity, and only present it to us
if such entity rejects the opportunity. Our amended and restated
memorandum and articles of association provides that, subject to
his or her fiduciary duties under Cayman Islands law, to the
fullest extent permitted by applicable law: (i) no individual
serving as a director or an officer shall have any duty, except and
to the extent expressly assumed by contract, to refrain from
engaging directly or indirectly in the same or similar business
activities or lines of business as us; and (ii) we renounce
any interest or expectancy in, or in being offered an opportunity
to participate in, any potential transaction or matter which may be
a corporate opportunity for any director or officer, on the one
hand, and us, on the other. We do not believe, however, that any
fiduciary duties or contractual obligations of our directors or
officers would materially undermine our ability to complete our
business combination.
Our officers and directors may, under certain circumstances, become
an officer or director of another special purpose acquisition
company with a class of securities intended to be registered under
the Securities Exchange Act of 1934, as amended, or the Exchange
Act, even before we have entered into a definitive agreement
regarding our initial business combination.
Effecting a Business Combination
General
We are not presently engaged in, and we will not engage in, any
substantive commercial business until we consummate our initial
business combination. We will utilize cash derived from the
proceeds of our initial public offering and the private placement
of private warrants, our share capital, debt or a combination of
these in effecting a business combination. Although substantially
all of the net proceeds of our initial public offering and the
private placement of private warrants are intended to be applied
generally toward effecting a business combination as described in
this report, the proceeds are not otherwise being designated for
any more specific purposes. A business combination may involve the
acquisition of, or merger with, a company which does not need
substantial additional capital but which desires to establish a
public trading market for its shares, while avoiding what it may
deem to be adverse consequences of undertaking a public offering
itself. These include time delays, significant expense, loss of
voting control and compliance with various Federal and state
securities laws. In the alternative, we may seek to consummate a
business combination with a company that may be financially
unstable or in its early stages of development or growth. While we
may seek to effect simultaneous business combinations with more
than one target business, we will probably have the ability, as a
result of our limited resources, to effect only a single business
combination.
We have until December 17, 2021 (or June 17, 2021 if we extend the
time period to consummate our initial business combination by the
full amount of time) to consummate an initial business combination.
However, if we anticipate that we may not be able to consummate our
initial business combination by December 17, 2021, we may, by
resolution of our board if requested by our sponsor, extend the
period of time to consummate a business combination up to two
times, each by an additional three months (to June 17, 2021 to
complete a business combination), subject to the sponsor depositing
additional funds into the trust account as set out below. Pursuant
to the terms of our amended and restated certificate of
incorporation and the trust agreement to be entered into between us
and Continental Stock Transfer & Trust Company on the date of
this report, in order for the time available for us to consummate
our initial business combination to be extended, our sponsor or its
affiliates or designees, upon five days advance notice prior to the
applicable deadline, must deposit into the trust account $1,150,000
if the underwriters’ over-allotment option is exercised in full
($0.10 per unit, or up to an aggregate of $2,300,000 if the
underwriters’ over-allotment option is exercised in full) on or
prior to the date of the applicable deadline, for each three month
extension. In the event that we receive notice from our sponsor
five days prior to the applicable deadline of its wish for us to
effect an extension, we intend to issue a press release announcing
such intention at least three days prior to the applicable
deadline. In addition, we intend to issue a press release the day
after the applicable deadline announcing whether or not the funds
had been timely deposited. Our sponsor and its affiliates or
designees are not obligated to fund the trust account to extend the
time for us to complete our initial business combination. If we are
unable to consummate an initial business combination within such
time period, we will redeem 100% of our issued and outstanding
public shares for a pro rata portion of the funds held in the trust
account, equal to the aggregate amount then on deposit in the trust
account including interest earned on the funds held in the trust
account and not previously released to us to pay our taxes, divided
by the number of then outstanding public shares, subject to
applicable law and as further described herein, and then seek to
dissolve and liquidate. We expect the pro rata redemption price to
be approximately $10.10 per public share (regardless of whether or
not the underwriters exercise their over-allotment option), without
taking into account any interest earned on such funds. However, we
cannot assure you that we will in fact be able to distribute such
amounts as a result of claims of creditors which may take priority
over the claims of our public shareholders. Our public shareholders
will not be entitled to vote or redeem their shares in connection
with any such extension. As a result, we may conduct such an
extension even though a majority of our public shareholders do not
support such an extension and will not be able to redeem their
shares in connection therewith.
We Have Not Identified a Target Business
To date, we have not selected any target business on which to
concentrate our search for a business combination. None of our
officers, directors, initial shareholders and other affiliates has
engaged in discussions on our behalf with representatives of other
companies regarding the possibility of a potential merger, share
exchange, asset acquisition or other similar business combination
with us, nor have we, nor any of our agents or affiliates, been
approached by any candidates (or representatives of any candidates)
with respect to a possible business combination with our
company.
Subject to the limitations that a target business have a fair
market value of at least 80% of the balance in the trust account
(excluding any taxes payable) at the time of the execution of a
definitive agreement for our initial business combination, as
described below in more detail, we will have virtually unrestricted
flexibility in identifying and selecting a prospective acquisition
candidate. We have not established any other specific attributes or
criteria (financial or otherwise) for prospective target
businesses. To the extent we effect a business combination with a
financially unstable company or an entity in its early stage of
development or growth, including entities without established
records of sales or earnings, we may be affected by numerous risks
inherent in the business and operations of financially unstable and
early stage or potential emerging growth companies. Although our
management will endeavor to evaluate the risks inherent in a
particular target business, we cannot assure you that we will
properly ascertain or assess all significant risk
factors.
Lack of Business Diversification
Our business combination must be with a target business or
businesses that collectively satisfy the minimum valuation standard
at the time of such acquisition, as discussed above, although this
process may entail the simultaneous acquisitions of several
operating businesses at the same time. Therefore, at least
initially, the prospects for our success may be entirely dependent
upon the future performance of a single business. Unlike other
entities which may have the resources to complete several business
combinations of entities operating in multiple industries or
multiple areas of a single industry, it is probable that we will
not have the resources to diversify our operations or benefit from
the possible spreading of risks or offsetting of losses. By
consummating a business combination with only a single entity, our
lack of diversification may:
|
· |
subject us to numerous
economic, competitive and regulatory developments, any or all of
which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to a business
combination, and |
|
· |
result in our
dependency upon the performance of a single operating business or
the development or market acceptance of a single or limited number
of products, processes or services. |
If we determine to simultaneously acquire several businesses and
such businesses are owned by different sellers, we will need for
each of such sellers to agree that our purchase of its business is
contingent on the simultaneous closings of the other acquisitions,
which may make it more difficult for us, and delay our ability, to
complete the business combination. With multiple acquisitions, we
could also face additional risks, including additional burdens and
costs with respect to possible multiple negotiations and due
diligence investigations (if there are multiple sellers) and the
additional risks associated with the subsequent assimilation of the
operations and services or products of the acquired companies in a
single operating business.
Limited Ability to Evaluate the Target Business’
Management
Although we scrutinize the management of a prospective target
business when evaluating the desirability of effecting a business
combination, we cannot assure you that our assessment of the target
business’ management will prove to be correct. In addition, we
cannot assure you that the future management will have the
necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of our officers and
directors, if any, in the target business following a business
combination cannot presently be stated with any certainty. While it
is possible that some of our key personnel will remain associated
in senior management or advisory positions with us following a
business combination, it is unlikely that they will devote their
full-time efforts to our affairs subsequent to a business
combination. Moreover, they would only be able to remain with the
company after the consummation of a business combination if they
are able to negotiate employment or consulting agreements in
connection with the business combination. Such negotiations would
take place simultaneously with the negotiation of the business
combination and could provide for them to receive compensation in
the form of cash payments and/or our securities for services they
would render to the company after the consummation of the business
combination. While the personal and financial interests of our key
personnel may influence their motivation in identifying and
selecting a target business, their ability to remain with the
company after the consummation of a business combination will not
be the determining factor in our decision as to whether or not we
will proceed with any potential business combination.
Additionally, our officers and directors may not have significant
experience or knowledge relating to the operations of the
particular target business.
Following a business combination, we may seek to recruit additional
managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to
recruit additional managers, or that any such additional managers
we do recruit will have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve an Initial
Business Combination
In connection with any proposed business combination, we will
either (1) seek shareholder approval of our initial business
combination at a general meeting called for such purpose at which
public shareholders may seek to convert their public shares,
regardless of whether they vote for or against the proposed
business combination, into
their pro rata share of the aggregate amount
then on deposit in the trust account (net of taxes payable) or
(2) provide our public shareholders with the opportunity to
sell their public shares to us by means of a tender offer (and
thereby avoid the need for a shareholder 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.
Notwithstanding the foregoing, our initial shareholders have
agreed, pursuant to written letter agreements with us, not to
convert any public shares held by them into
their pro rata share of the aggregate amount
then on deposit in the trust account. If we determine to engage in
a tender offer, such tender offer will be structured so that each
shareholder may tender any or all of his, her or its public shares
rather than some pro rata portion of his, her
or its shares. The decision as to whether we will seek shareholder
approval of a proposed business combination or will allow
shareholders to sell their shares to us in a tender offer will be
made by us based on a variety of factors such as the timing of the
transaction, whether the terms of the transaction would otherwise
require us to seek shareholder approval or whether we were deemed
to be a foreign private issuer (which would require us to conduct a
tender offer rather than seeking shareholder approval under SEC
rules). If we so choose and we are legally permitted to do so, we
have the flexibility to avoid a shareholder vote and allow our
shareholders to sell their shares pursuant to Rule 13e-4 and
Regulation 14E of the Exchange Act which regulate issuer
tender offers. In that case, we 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. We will only consummate our
initial business combination if we have net tangible assets (after
redemption) of at least $5,000,001 either immediately prior to or
upon such consummation and, solely if we seek shareholder approval,
the approval of an ordinary resolution under Cayman Islands law,
which requires the affirmative vote of a majority of the
shareholders who attend and vote at a general meeting of the
company.
We chose our net tangible asset threshold of $5,000,001 as
described above to ensure that we would avoid being subject to
Rule 419 promulgated under the Securities Act. However, if we
seek to consummate an initial business combination with a target
business that imposes any type of working capital closing condition
or requires us to have a minimum amount of funds available from the
trust account upon consummation of such initial business
combination, our net tangible asset threshold may limit our ability
to consummate such initial business combination (as we may be
required to have a lesser number of shares converted or sold to us)
and may force us to seek third party financing which may not be
available on terms acceptable to us or at all. As a result, we may
not be able to consummate such initial business combination and we
may not be able to locate another suitable target within the
applicable time period, if at all. Public shareholders may
therefore have to wait until December 17, 2021 (or June 17, 2021 if
we extend the period of time to consummate the business combination
by the full amount of time) in order to be able to receive
a pro rata share of the trust
account.
Our initial shareholders and our officers and directors have agreed
(1) to vote any ordinary shares owned by them in favor of any
proposed business combination, (2) not to convert any ordinary
shares in connection with a shareholder vote to approve a proposed
initial business combination and (3) not sell any ordinary
shares in any tender in connection with a proposed initial business
combination. As a result, if we sought shareholder approval of a
proposed transaction, we would need only 4,250,001 of our public
shares (or approximately 36.96% of our public shares) to be voted
in favor of the transaction in order to have such transaction
approved (assuming the over-allotment option is not exercised, that
the initial shareholders do not purchase any units in our
initial public offering or units or shares in the after-market
and that the 125,000 representative shares are voted in favor of
the transaction).
None of our officers, directors, initial shareholders or their
affiliates has indicated any intention to purchase units or
ordinary shares in our initial public offering or from persons in
the open market or in private transactions. However, if we hold a
general meeting to approve a proposed business combination and a
significant number of shareholders vote, or indicate an intention
to vote, against such proposed business combination, our officers,
directors, initial shareholders or their affiliates could make such
purchases in the open market or in private transactions in order to
influence the vote. Notwithstanding the foregoing, our officers,
directors, initial shareholders and their affiliates will not make
purchases of ordinary shares if the purchases would violate
Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which
are rules designed to stop potential manipulation of a company’s
stock.
Limitation on Redemption Upon Completion of Our Initial
Business Combination If We Seek Shareholder Approval
Notwithstanding the foregoing, if we seek shareholder approval of
our initial business combination and we do not conduct redemptions
in connection with our initial business combination pursuant to the
tender offer rules, our amended and restated memorandum and
articles of association will provide that a public shareholder,
together with any affiliate of such shareholder or any other person
with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be
restricted from seeking redemption rights with respect to Excess
Shares. We believe this restriction will discourage shareholders
from accumulating large blocks of shares, and subsequent attempts
by such holders to use their ability to exercise their redemption
rights against a proposed business combination as a means to force
us or our sponsor or its affiliates to purchase their shares at a
significant premium to the then-current market price or on other
undesirable terms. Absent this provision, a public shareholder
holding more than an aggregate of 15% of the shares sold in our
initial public offering could threaten to exercise its redemption
rights if such holder’s shares are not purchased by us or our
sponsor or its affiliates at a premium to the then-current market
price or on other undesirable terms. By limiting our shareholders’
ability to redeem no more than 15% of the shares sold in our
initial public offering, we believe we will limit the ability of a
small group of shareholders to unreasonably attempt to block our
ability to complete our initial business combination, particularly
in connection with a business combination with a target that
requires as a closing condition that we have a minimum net worth or
a certain amount of cash. However, we would not be restricting our
shareholders’ ability to vote all of their shares (including Excess
Shares) for or against our initial business combination. Our
sponsor, officers and directors have, pursuant to a letter
agreement entered into with us, waived their right to have any
founder shares or public shares held by them redeemed in connection
with our initial business combination. Unless any of our other
affiliates acquires founder shares through a permitted transfer
from an initial shareholder, and thereby becomes subject to the
letter agreement, no such affiliate is subject to this waiver.
However, to the extent any such affiliate acquires public shares in
our initial public offering or thereafter through open market
purchases, it would be a public shareholder and restricted from
seeking redemption rights with respect to any Excess
Shares.
Conversion/Tender Rights
At any meeting called to approve an initial business combination,
public shareholders may seek to convert their public shares,
regardless of whether they vote for or against the proposed
business combination, into
their pro rata share of the aggregate amount
then on deposit in the trust account, less any taxes then due but
not yet paid. Notwithstanding the foregoing, our initial
shareholders have agreed, pursuant to written letter agreements
with us, not to convert any public shares held by them into
their pro rata share of the aggregate amount
then on deposit in the trust account. The conversion rights will be
effected under our amended and restated memorandum and articles of
association and Cayman Islands law as redemptions. If we hold a
general meeting to approve an initial business combination, a
holder will always have the ability to vote against a proposed
business combination and not seek conversion of his
shares.
Alternatively, if we engage in a tender offer, each public
shareholder will be provided the opportunity to sell his public
shares to us in such tender offer. The tender offer rules require
us to hold the tender offer open for at least 20 business days.
Accordingly, this is the minimum amount of time we would need to
provide holders to determine whether they want to sell their public
shares to us in the tender offer or remain an investor in our
company.
Our initial shareholders, officers and directors do not have
conversion rights with respect to any ordinary shares owned by
them, directly or indirectly, whether acquired prior to our initial
public offering or purchased by them in our initial offering or in
the aftermarket. Additionally, the holders of the representative
shares will not have conversion rights with respect to the
representative shares.
We may also require public shareholders, whether they are a record
holder or hold their shares in “street name,” to either tender
their certificates to our transfer agent or to deliver their shares
to the transfer agent electronically using DTC’s DWAC
(Deposit/Withdrawal At Custodian) System, at the holder’s option,
at any time at or prior to the vote on the business combination.
Once the shares are converted by the legal holder, and effectively
redeemed by us under Cayman Islands law, the transfer agent will
then update our Register of Members to reflect all conversions. The
proxy solicitation materials that we will furnish to shareholders
in connection with the vote for any proposed business combination
will indicate whether we are requiring shareholders to satisfy such
delivery requirements. Accordingly, a shareholder would have from
the time our proxy statement is mailed through the vote on the
business combination to deliver his shares if he wishes to seek to
exercise his conversion rights. Under our amended and restated
memorandum and articles of association, we are required to provide
at least 10 days’ advance notice of any general meeting, which
would be the minimum amount of time a shareholder would have to
determine whether to exercise conversion rights. As a result, if we
require public shareholders who wish to convert their ordinary
shares into the right to receive
a pro rata portion of the funds in the trust
account to comply with the foregoing delivery requirements, holders
may not have sufficient time to receive the notice and deliver
their shares for conversion. Accordingly, investors may not be able
to exercise their conversion rights and may be forced to retain our
securities when they otherwise would not want to.
There is a nominal cost associated with this tendering process and
the act of certificating the shares or delivering them through the
DWAC System. The transfer agent will typically charge the tendering
broker $45 and it would be up to the broker whether or not to pass
this cost on to the converting holder. However, this fee would be
incurred regardless of whether or not we require holders seeking to
exercise conversion rights. The need to deliver shares is a
requirement of exercising conversion rights regardless of the
timing of when such delivery must be effectuated. However, in the
event we require shareholders seeking to exercise conversion rights
to deliver their shares prior to the consummation of the proposed
business combination and the proposed business combination is not
consummated, this may result in an increased cost to
shareholders.
Any request to convert or tender such shares once made, may be
withdrawn at any time up to the vote on the proposed business
combination or expiration of the tender offer. Furthermore, if a
holder of a public share delivered his certificate in connection
with an election of their conversion or tender and subsequently
decides prior to the vote on the business combination or the
expiration of the tender offer not to elect to exercise such
rights, he may simply request that the transfer agent return the
certificate (physically or electronically).
If the initial business combination is not approved or completed
for any reason, then our public shareholders who elected to
exercise their conversion or tender rights would not be entitled to
convert their shares for the
applicable pro rata share of the trust
account. In such case, we will promptly return any shares delivered
by public holders.
Automatic Liquidation of Trust Account if No Business
Combination
If we do not complete a business combination by December 17, 2021
(or June 17, 2021 if we extend the period of time to consummate the
business combination by the full amount of time), it will trigger
our automatic winding up, liquidation and dissolution pursuant to
the terms of our amended and restated memorandum and articles of
association. As a result, this has the same effect as if we had
formally gone through a voluntary liquidation procedure under the
Companies Law. Accordingly, no vote would be required from our
shareholders to commence such a voluntary winding up, liquidation
and dissolution.
The amount in the trust account (less approximately $1,000
representing the aggregate nominal par value of the shares of our
public shareholders) under the Companies Law will be treated as
share premium which is distributable under the Companies Law
provided that immediately following the date on which the proposed
distribution is proposed to be made, we are able to pay our debts
as they fall due in the ordinary course of business. If we are
forced to liquidate the trust account, we anticipate that we would
distribute to our public shareholders the amount in the trust
account calculated as of the date that is two days prior to the
distribution date (including any accrued interest, net of taxes
payable). Prior to such distribution, we would be required to
assess all claims that may be potentially brought against us by our
creditors for amounts they are actually owed and make provision for
such amounts, as creditors take priority over our public
shareholders with respect to amounts that are owed to them. We
cannot assure you that we will properly assess all claims that may
be potentially brought against us. As such, our shareholders could
potentially be liable for any claims of creditors to the extent of
distributions received by them as an unlawful payment in the event
we enter an insolvent liquidation. Furthermore, while we will seek
to have all vendors and service providers (which would include any
third parties we engaged to assist us in any way in connection with
our search for a target business) and prospective target businesses
execute agreements with us waiving any right, title, interest or
claim of any kind they may have in or to any monies held in the
trust account, there is no guarantee that they will execute such
agreements. Nor is there any guarantee that, even if such entities
execute such agreements with us, they will not seek recourse
against the trust account or that a court would conclude that such
agreements are legally enforceable.
Each of our initial shareholders and our sponsor has agreed to
waive its rights to participate in any liquidation of our trust
account or other assets with respect to the insider shares and
private warrants and to vote their insider shares in favor of any
dissolution and plan of distribution which we submit to a vote of
shareholders. There will be no distribution from the trust account
with respect to our warrants, which will expire worthless. If we
are unable to complete an initial business combination and expend
all of the net proceeds of our initial public offering, other than
the proceeds deposited in the trust account, and without taking
into account interest, if any, earned on the trust account, or
additional funds deposited in the trust account in order to extend
the period of time we have to consummate our initial business
combination, the initial per-share distribution from the trust
account would be $10.10.
The proceeds deposited in the trust account could, however, become
subject to the claims of our creditors which would be prior to the
claims of our public shareholders. Although we will seek to have
all vendors, including lenders for money borrowed, prospective
target businesses or other entities we engage execute agreements
with us waiving any right, title, interest or claim of any kind in
or to any monies held in the trust account for the benefit of our
public shareholders, there is no guarantee that they will execute
such agreements or even if they execute such agreements that they
would be prevented from bringing claims against the trust account,
including but not limited to, fraudulent inducement, breach of
fiduciary responsibility or other similar claims, as well as claims
challenging the enforceability of the waiver, in each case in order
to gain an advantage with a claim against our assets, including the
funds held in the trust account. If any third party refused to
execute an agreement waiving such claims to the monies held in the
trust account, we would perform an analysis of the alternatives
available to us if we chose not to engage such third party and
evaluate if such engagement would be in the best interest of our
shareholders if such third party refused to waive such claims.
Examples of possible instances where we may engage a third party
that refused to execute a waiver include the engagement of a third
party consultant whose particular expertise or skills are believed
by management to be significantly superior to those of other
consultants that would agree to execute a waiver or in cases where
management is unable to find a provider of required services
willing to provide the waiver. In any event, our management would
perform an analysis of the alternatives available to it and would
only enter into an agreement with a third party that did not
execute a waiver if management believed that such third party’s
engagement would be significantly more beneficial to us than any
alternative. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a
result of, or arising out of, any negotiations, contracts or
agreements with us and will not seek recourse against the trust
account for any reason.
Our sponsor has agreed that, if we liquidate the trust account
prior to the consummation of a business combination, it will be
liable to pay debts and obligations to target businesses or vendors
or other entities that are owed money by us for services rendered
or contracted for or products sold to us in excess of the net
proceeds of our initial public offering not held in the trust
account, but only to the extent necessary to ensure that such debts
or obligations do not reduce the amounts in the trust account and
only if such parties have not executed a waiver agreement. We have
not asked our sponsor to reserve any amount to satisfy any
indemnification obligations that may arise and its only assets are
expected to be our securities. Accordingly, we believe it is
unlikely that it will be able to satisfy those indemnification
obligations if it is required to do so. Accordingly, the actual
per-share distribution could be less than $10.10 due to claims of
creditors. Additionally, if we are forced to file a bankruptcy or
wind-up petition or an involuntary bankruptcy or wind-up petition
is filed against us which is not dismissed, the proceeds held in
the trust account could be subject to applicable bankruptcy or
insolvency law, and may be included in our bankruptcy or insolvency
estate and subject to the claims of third parties with priority
over the claims of our shareholders. To the extent any bankruptcy
or insolvency claims deplete the trust account, we cannot assure
you we will be able to return to our public shareholders at least
$10.10 per share.
Competition
In identifying, evaluating and selecting a target business, we may
encounter intense competition from other entities having a business
objective similar to ours. Many of these entities are well
established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Many of these
competitors possess greater technical, human and other resources
than us and our financial resources will be relatively limited when
contrasted with those of many of these competitors. While we
believe there may be numerous potential target businesses that we
could acquire with the net proceeds of our initial public offering,
our ability to compete in acquiring certain sizable target
businesses may be limited by our available financial
resources.
The following also may not be viewed favorably by certain target
businesses:
|
· |
our obligation to seek
shareholder approval of a business combination or obtain the
necessary financial information to be sent to shareholders in
connection with such business combination may delay or prevent the
completion of a transaction; |
|
· |
our obligation to
convert public shares held by our public shareholders may reduce
the resources available to us for a business
combination; |
|
· |
the NYSE may require
us to file a new listing application and meet its initial listing
requirements to maintain the listing of our securities following a
business combination; |
|
· |
our outstanding
warrants and the potential future dilution they
represent; |
|
· |
our obligation to pay
EarlyBirdCapital an aggregate fee of 3.5% of the gross proceeds of
our initial public offering upon consummation of our initial
business combination pursuant to the business combination marketing
agreement, as described under the section titled
“Underwriting — Business Combination Marketing
Agreement”; |
|
· |
our obligation to
either repay or issue warrants upon conversion of up to $1,000,000
of working capital loans that may be made to us by our initial
shareholders, officers, directors or their affiliates; |
|
· |
our obligation to
register the resale of the insider shares, as well as the private
warrants (and underlying securities) and any securities issued to
our initial shareholders, officers, directors or their affiliates
upon conversion of working capital loans; and |
|
· |
the impact on the
target business’ assets as a result of unknown liabilities under
the securities laws or otherwise depending on developments
involving us prior to the consummation of a business
combination. |
Any of these factors may place us at a competitive disadvantage in
successfully negotiating a business combination. Our management
believes, however, that our status as a public entity and potential
access to the United States public equity markets may give us a
competitive advantage over privately-held entities having a similar
business objective as ours in acquiring a target business with
significant growth potential on favorable terms. Furthermore, the
fact that we will not be required to pay our underwriters any
deferred compensation upon consummation of an initial business
combination may give us a competitive advantage over other
similarly structured blank check companies.
If we succeed in effecting a business combination, there will be,
in all likelihood, intense competition from competitors of the
target business. We cannot assure you that, subsequent to a
business combination, we will have the resources or ability to
compete effectively.
Employees
We have two executive officers. These individuals are not obligated
to devote any specific number of hours to our matters and intend to
devote only as much time as they deem necessary to our affairs. The
amount of time they l devote in any time period varies based on the
stage of the business combination process the company is in.
Accordingly, once management locates a suitable target business to
acquire, they will spend more time investigating such target
business and negotiating and processing the business combination
(and consequently spend more time to our affairs) than they would
prior to locating a suitable target business. We presently expect
our executive officers to devote such amount of time as they
reasonably believe is necessary to our business (which could range
from only a few hours a week while we are trying to locate a
potential target business to a majority of their time as we move
into serious negotiations with a target business for a business
combination). We do not intend to have any full-time employees
prior to the consummation of a business combination.
Periodic Reporting and Audited Financial Statements
We have registered our units, ordinary shares and warrants
under the Exchange Act and have reporting obligations, including
the requirement that we file annual, quarterly and current reports
with the SEC. In accordance with the requirements of the Exchange
Act, our annual report will contain financial statements audited
and reported on by our independent registered public
accountants.
We will provide shareholders with audited financial statements of
the prospective target business as part of any proxy solicitation
sent to shareholders to assist them in assessing the target
business. In all likelihood, the financial information included in
the proxy solicitation materials will need to be prepared in
accordance with U.S. GAAP or IFRS, depending on the circumstances,
and the historical financial statements may be required to be
audited in accordance with the standards of the PCAOB. The
financial statements may also be required to be prepared in
accordance with U.S. GAAP for the Form 8-K announcing the closing
of an initial business combination, which would need to be filed
within four business days thereafter. We cannot assure you that any
particular target business identified by us as a potential
acquisition candidate will have the necessary financial
information. To the extent that this requirement cannot be met, we
may not be able to acquire the proposed target business.
We will be required to comply with the internal control
requirements of the Sarbanes-Oxley Act beginning for the fiscal
year ending December 31, 2021. A target company may not be in
compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the
internal controls of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to
complete any such acquisition.
We are an emerging growth company as defined in the JOBS Act and
will remain an emerging growth company for up to five years.
However, if our non-convertible debt issued within a three-year
period or our total revenues exceed $1.0 billion or revenues
exceed $1.07 billion, or the market value of our ordinary
shares that are held by non-affiliates exceeds $700 million on
the last day of the second fiscal quarter of any given fiscal year,
we would cease to be an emerging growth company as of the following
fiscal year. As an emerging growth company, we have elected, under
Section 107(b) of the JOBS Act, to 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.
As a smaller reporting company, we are not required to include risk
factors in this annual report. However, below is a partial list of
material risks, uncertainties and other factors that could have a
material effect on the Company and its operations:
| |
● |
we
are a blank check Company with no revenue or basis to evaluate our
ability to select a suitable business target; |
| |
● |
we
may not be able to select an appropriate target business or
businesses and complete our initial business combination in the
prescribed time frame; |
| |
● |
our
expectations around the performance of a prospective target
business or businesses may not be realized; |
| |
● |
we
may not be successful in retaining or recruiting required officers,
key employees or directors following our initial business
combination; |
| |
● |
our
officers and directors may have difficulties allocating their time
between the Company and other businesses and may potentially have
conflicts of interest with our business or in approving our initial
business combination; |
| |
● |
we
may not obtain additional financing to complete our initial
business combination or reduce number of shareholders requesting
redemption; |
| |
● |
we
may issue our shares to investors in connection with our initial
business combination at a price that is less than the prevailing
market price of our shares at that time; |
| |
● |
you
may not be given the opportunity to choose the initial business
target or to vote on the initial business combination; |
| |
● |
our
warrants are being accounted for as a warrant liability and are
being recorded at fair value upon issuance with changes in fair
value each period reported in earnings, which may have an adverse
effect on the market price of our securities; |
| |
● |
trust
account funds may not be protected against third party claims or
bankruptcy; |
| |
● |
we
have identified a material weakness in our internal control over
financial reporting; |
| |
● |
an
active market for our public securities may not develop and you
will have limited liquidity and trading; |
| |
● |
the
availability to us of funds from interest income on the trust
account balance may be insufficient to operate our business prior
to the business combination; |
| |
● |
our
financial performance following a business combination with an
entity may be negatively affected by their lack an established
record of revenue, cash flows and experienced management;
and |
For the complete list of risks relating to our operations, see the
section titled “Risk Factors” contained in our prospectus dated
December 14, 2020, and filed with the SEC on December 16, 2020.
In addition, set forth below are certain additional risks relating
to the restatement of our previously issued financial statements,
as further described in this Amendment.
Our private placement warrants are accounted for as
liabilities and the changes in value of our private placement
warrants could have a material effect on our financial
results.
On April 12, 2021, the Acting Director of the Division of
Corporation Finance and Acting Chief Accountant of the SEC together
issued a statement regarding the accounting and reporting
considerations for warrants issued by special purpose acquisition
companies entitled “Staff Statement on Accounting and Reporting
Considerations for Warrants Issued by Special Purpose Acquisition
Companies (the “SEC Statement”). Specifically, the SEC Statement
focused on certain settlement terms and provisions related to
certain tender offers following a business combination, which terms
are similar to those contained in the warrant agreement governing
our warrants. As a result of the SEC Statement, we reevaluated the
accounting treatment of our warrants and restated our previously
issued financial statements to classify the private placement
warrants as derivative liabilities measured at fair value, with
changes in fair value each period reported in earnings.
As a result, included on our balance sheet as of December 31, 2020
contained elsewhere in this Amendment are derivative liabilities
related to embedded features contained within our warrants.
Accounting Standards Codification 815, Derivatives and Hedging
(“ASC 815”), provides for the remeasurement of the fair value of
such derivatives at each balance sheet date, with a resulting
non-cash gain or loss related to the change in the fair value being
recognized in earnings in the statements of operations. As a result
of the recurring fair value measurement, as long as the private
placement warrants are outstanding, our financial statements and
results of operations may fluctuate quarterly based on factors
which are outside of our control. Due to the recurring fair value
measurement, we expect that we will recognize non-cash gains or
losses on our private placement warrants each reporting period and
that the amount of such gains or losses could be material.
We have identified a material weakness in our internal
control over financial reporting as of December 31, 2020. If we are
unable to develop and maintain an effective system of internal
control over financial reporting, we may not be able to accurately
report our financial results in a timely manner, which may
adversely affect investor confidence in our company and materially
and adversely affect our business and operating
results.
Following the issuance of the SEC Statement, the Company, in
consultation with our Audit Committee, concluded on May 5, 2021
that our previously issued audited financial statements as of
December 31, 2020 and for the period from September 8, 2020
(inception) to December 31, 2020, and related disclosures, should
be restated. As part of such process, we identified a material
weakness in our internal controls over financial reporting.
A material weakness is a deficiency or combination of deficiencies
in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of our
financial statements would not be prevented or detected on a timely
basis. These deficiencies could result in additional material
misstatements in our financial statements that could not be
prevented or detected on a timely basis.
Effective internal controls are necessary for us to provide
reliable financial reports and prevent fraud. We continue to
evaluate steps to remediate the material weakness. These
remediation measures may be time consuming and costly and there is
no assurance that these initiatives will ultimately have the
intended effects.
If we discover additional weaknesses in our internal controls in
the future, any such newly identified material weakness could limit
our ability to prevent or detect a misstatement of our accounts or
disclosures that could result in a material misstatement of our
financial statements. In such case, we may be unable to maintain
compliance with securities law requirements regarding timely filing
of periodic reports in addition to applicable stock exchange
listing requirements, investors may lose confidence in our
financial reporting and our stock price may decline as a result. We
cannot assure you that the measures we have taken to date, or any
measures we may take in the future, will be sufficient to avoid
potential future material weaknesses.
We may face litigation and other risks as a result of the
material weakness in our internal control over financial
reporting.
Following the issuance of the SEC Statement, our management and our
Audit Committee concluded that it was appropriate to restate our
previously issued audited financial statements as of December 31,
2020 and for the period from September 8, 2020 (inception) through
December 31, 2020. As part of the restatement, we identified a
material weakness in our internal controls over financial
reporting. As a result of such material weakness, the restatement
related to the accounting for our warrants, and other matters
raised or that may in the future be raised by the SEC, we may face
potential litigation or other disputes which may include, among
others, claims invoking the federal and state securities laws,
contractual claims or other claims arising from the restatement of
our financial statements and material weakness in our internal
control over financial reporting. As of the date of this Amendment,
we have no knowledge of any such litigation or dispute. However, we
can provide no assurance that such litigation or dispute will not
arise in the future. Any such litigation or dispute, whether
successful or not, could have a material adverse effect on our
business, results of operations and financial condition or its
ability to complete a business combination.
|
Item
1B. |
Unresolved
Staff Comments |
Not applicable.
Our principal executive offices are located at 16400 Dallas Pkwy
#305, Dallas, TX 75248 and our telephone number is (303) 885-8688.
We pay Fifth Partners, an affiliate of our sponsor and our Chief
Executive Officer, approximately $7,000 per month for office space
and advisory services relating to our search for, and consummation
of, an initial business combination. We also pay we pay Alberto
Pontonio, one of our directors, approximately $3,000 per month for
certain general and administrative services, including office
space, utilities and secretarial support, as we may require from
time to time.
|
Item
3. |
Legal
Proceedings |
To the knowledge of our management team, there is no litigation
currently pending or contemplated against us, any of our officers
or directors in their capacity as such or against any of our
property.
|
Item
4. |
Mine
Safety Disclosures |
Not applicable.
PART II
|
Item
5. |
Market
for Registrant’s Common Equity, Related Stockholder Matters, and
Issuer Purchases of Equity Securities |
Our units, ordinary shares and warrants are each traded on the New
York Stock Exchange under the symbols “ATA.U,” “ATA” and “ATA.WS,
respectively. Our units commenced public trading on December 15,
2020, and our ordinary shares and warrants commenced public trading
separately on January 28, 2021.
On March 29 2021, there was 1 holder of record of our units,
22 holders of record of our shares of ordinary shares and 3 holders
of record of our warrants.
We have not paid any cash dividends on our ordinary shares to date
and do not intend to pay cash dividends prior to the completion of
our initial business combination. The payment of cash dividends in
the future will be dependent upon our revenues and earnings, if
any, capital requirements and general financial condition
subsequent to completion of our initial business combination. The
payment of any cash dividends subsequent to our initial business
combination will be within the discretion of our Board of Directors
at such time. In addition, our Board of Directors is not currently
contemplating and does not anticipate declaring any stock dividends
in the foreseeable future. Further, if we incur any indebtedness in
connection with our initial business combination, our ability to
declare dividends may be limited by restrictive covenants we may
agree to in connection therewith.
| |
(d) |
Securities
Authorized for Issuance Under Equity Compensation
Plans. |
None.
| |
(e) |
Recent
Sales of Unregistered Securities |
None.
| |
(f) |
Purchases
of Equity Securities by the Issuer and Affiliated
Purchasers |
None.
| |
(g) |
Use of Proceeds from the Initial Public
Offering |
On December 17, 2020, we consummated our initial public offering of
11,500,000 units, including 1,500,000 Units issued pursuant to the
exercise of the underwriters’ over-allotment option in full. Each
unit consists of one ordinary share and one-half of one redeemable
warrant of , with each whole warrant entitling the holder thereof
to purchase one ordinary share for $11.50 per share. The units were
sold at a price of $10.00 per unit, generating gross proceeds of
$115,000,000. Simultaneously with the closing of the initial
public offering, pursuant to the Private Placement Warrants
Purchase Agreements, we completed the private sale of an aggregate
of 5,450,000 private placement warrants, including 4,905,000
private placement warrants to the sponsor, and 545,000 private
placement warrants to the representative, at a purchase price of
$1.00 per private placement warrant, generating gross proceeds of
$5,450,000.
A total of $116,150,000 of the proceeds from our initial public
offering and the sale of the private placement warrants, was placed
in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A.,
maintained by Continental Stock Transfer & Trust Company,
acting as trustee. The proceeds held in the trust account may be
invested by the trustee only in U.S. government securities with a
maturity of 185 days or less or in money market funds investing
solely in U.S. government treasury obligations and meeting certain
conditions under Rule 2a-7 under the Investment Company Act of
1940, as amended.
|
Item
7. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS |
The following discussion and analysis of the Company’s financial
condition and results of operations should be read in conjunction
with our audited financial statements and the notes related thereto
which are included in “Item 8. Financial Statements and
Supplementary Data” of this Annual Report on Form 10-K. Certain
information contained in the discussion and analysis set forth
below includes forward-looking statements. Our actual results may
differ materially from those anticipated in these forward-looking
statements as a result of many factors, including those set forth
under “Special Note Regarding Forward-Looking Statements,” “Item
1A. Risk Factors” and elsewhere in this Annual Report on Form
10-K.
Restatement
In the SEC Staff Statement, the SEC Staff expressed its view that
certain terms and conditions common to SPAC warrants may require
the warrants to be classified as liabilities on the SPAC’s balance
sheet as opposed to equity. Since issuance on December 17, 2020,
our warrants were accounted for as equity within our balance sheet,
and after discussion and evaluation, including with our independent
auditors, we have concluded that our private warrants should be
presented as liabilities with subsequent fair value
remeasurement.
Therefore, the Company, in consultation with its Audit Committee,
concluded that its previously issued financial statements for the
year ended December 31, 2020 should be restated because of a
misapplication in the guidance around accounting for the private
warrants and should no longer be relied upon.
Historically, the private warrants were reflected as a component of
equity as opposed to liabilities on the balance sheets and the
statements of operations did not include the subsequent non-cash
changes in estimated fair value of the private warrants, based on
our application of Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 815-40, Derivatives
and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40). The
views expressed in the SEC Staff Statement were not consistent with
the Company’s historical interpretation of the specific provisions
within its warrant agreement and the Company’s application of ASC
815-40 to the warrant agreement. We reassessed our accounting for
private warrants issued on December 17, 2020, in light of the SEC
Staff’s published views. Based on this reassessment, we determined
that the private warrants should be classified as liabilities
measured at fair value upon issuance, with subsequent changes in
fair value reported in our statement of operations each reporting
period. Accordingly, this Amendment restates our financial
statements as of, and for the year ended December 31, 2020.
The restatement is more fully described in Note 2 of the notes to
the financial statements included herein.
Overview
We are a blank check company incorporated in the Cayman Islands on
September 8, 2020 formed for the purpose of effecting a merger,
amalgamation, share exchange, asset acquisition, share purchase,
reorganization or other similar Business Combination with one or
more businesses. We intend to effectuate our Business Combination
using cash derived from the proceeds of the Initial Public Offering
and the sale of the Private Warrants, our shares, debt or a
combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of
our acquisition plans. We cannot assure you that our plans to
complete a Business Combination will be successful.
Results of Operations (restated)
We have neither engaged in any operations nor generated any
operating revenues to date. Our only activities from inception
through December 31, 2020 were organizational activities and those
necessary to prepare for the Initial Public Offering, described
below. We do not expect to generate any operating revenues until
after the completion of our initial Business Combination. We expect
to generate non-operating income in the form of interest income on
investments held after the Initial Public Offering. We expect that
we will incur increased expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses in connection
with searching for, and completing, a Business Combination.
For the period from September 8, 2020 (inception) through
December 31, 2020, we had a net loss of $1,248,847, which
consisted of interest earned on investments held in the Trust
Account of $1,909, offset by operating expenses of $36,378,
transaction costs allocable to warrant liabilities of $15,378, and
change in warrant liabilities of $1,199,000.
Liquidity and Capital Resources (restated)
On December 17, 2020, we consummated the Initial Public Offering of
11,500,000 Units, at a price of $10.00 per Unit, which included the
full exercise by the underwriter of its over-allotment option in
the amount of 1,500,000 Units, generating gross proceeds of
$115,000,000. Simultaneously with the closing of the Initial Public
Offering, we consummated the sale of 5,450,000 Private Warrants to
the Sponsor at a price of $1.00 per Private Warrant generating
gross proceeds of $5,450,000.
Following the Initial Public Offering, the full exercise by the
underwriters of their over-allotment option and sale of the Private
Warrants, a total of $116,150,000 was placed in the Trust Account.
We incurred $2,712,986 in transaction costs, including $2,300,000
of cash underwriting fees, and $412,986 of other offering
costs.
For the period from September 8, 2020 (inception) through
December 31, 2020, net cash used in operating activities was
$354,949. Net loss of $1,248,847 was offset by interest earned on
investments of $1,909, transaction costs allocable warrant
liabilities of $15,378, a change in the fair value of warrant
liabilities of $1,199,000, formation costs of $5,000 and changes in
operating assets and liabilities, which used $323,571 of cash from
operating activities.
At December 31, 2020, we had cash and investments held in the Trust
Account of $116,151,909. We intend to use substantially all of the
funds held in the Trust Account, including any amounts representing
interest earned on the Trust Account, which interest shall be net
of taxes payable and excluding deferred underwriting commissions,
to complete our Business Combination. We may withdraw interest from
the Trust Account to pay taxes, if any. To the extent that our
share capital or debt is used, in whole or in part, as
consideration to complete a 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.
At December 31, 2020, we had cash of $1,253,202 held outside of 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, structure, negotiate and complete a Business
Combination.
In order to fund working capital deficiencies or finance
transaction costs in connection with a Business Combination, our
Sponsor or an affiliate of our Sponsor or certain of our officers
and directors may, but are not obligated to, loan us funds as may
be required. If we complete a Business Combination, we may repay
such loaned amounts out of the proceeds of the Trust Account
released to us. 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
$1,000,000 of such loans may be convertible into warrants, at a
price of $1.00 per warrant, at the option of the lender. The
warrants would be identical to the Private Warrants.
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 initial 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 completion of our
Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business
Combination.
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash
flow, market, or foreign currency risks. We evaluate all of our
financial instruments, including issued stock purchase warrants, to
determine if such instruments are derivatives or contain features
that qualify as embedded derivatives, pursuant to ASC 480 and ASC
815-15. The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as
equity, is reassessed at the end of each reporting period.
We issued an aggregate of 5,450,000 private warrants in connection
with our initial public offering and private placement, which, as a
result of the restatement described in Note 2 “Restatement of
Previously Issued Financial Statements” to the financial statements
included herein, are recognized as derivative liabilities in
accordance with ASC 815-40. Accordingly, we recognize the warrants
as liabilities at fair value and adjust the instruments to fair
value at each reporting period. The liabilities are subject to
remeasurement at each balance sheet date until exercised, and any
change in fair value is recognized in the Company’s statement of
operations. The fair value of the private placement warrants has
been estimated using a Binomial Lattice Model at each measurement
date.
Going Concern
In connection with our assessment of going concern considerations
in accordance with Financial Accounting Standard Board’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 the mandatory liquidation and
subsequent dissolution raises substantial doubt about our ability
to continue as a going concern. No adjustments have been made to
the carrying amounts of assets or liabilities should we be required
to liquidate after December 17, 2021.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be
considered off-balance sheet arrangements as of December 31, 2020.
We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often
referred to as variable interest entities, which would have been
established for the purpose of facilitating off-balance sheet
arrangements. We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities,
guaranteed any debt or commitments of other entities, or purchased
any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations,
operating lease obligations or long-term liabilities, other than
described below. The underwriters are entitled to a deferred fee of
$0.20 per Unit, or $2,300,000 in the aggregate. The deferred fee
will become payable to the underwriters from the amounts held in
the Trust Account solely in the event that we complete a Business
Combination, subject to the terms of the underwriting
agreement.
Critical Accounting Policies
The preparation of 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 private warrants issued in connection with our
Initial Public Offering in accordance with the guidance contained
in ASC 815-40-15-7D under which the warrants do not meet the
criteria for equity treatment and must be recorded as liabilities.
Accordingly, we classify the private warrants as liabilities at
their fair value and adjust the private 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 private warrants was estimated using a Binomial Lattice
Model.
Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption
in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from
Equity.” Ordinary shares subject to mandatory redemption is
classified as a liability instrument and is measured at fair value.
Conditionally redeemable ordinary shares (including ordinary shares
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 our control) is classified as
temporary equity. At all other times, ordinary shares are
classified as shareholders’ equity. Our ordinary shares feature
certain redemption rights that are considered to be outside of our
control and subject to occurrence of uncertain future events.
Accordingly, ordinary shares subject to possible redemption is
presented as temporary equity, outside of the shareholders’ equity
section of our balance sheet.
Net Income (Loss) per Ordinary Share
We apply the two-class method in calculating earnings per share.
Net income per ordinary share, basic and diluted for redeemable
ordinary shares is calculated by dividing the interest income
earned on the Trust Account by the weighted average number of
redeemable ordinary shares outstanding since original issuance. Net
loss per ordinary share, basic and diluted for non-redeemable
ordinary shares is calculated by dividing the net income (loss),
less income attributable to redeemable ordinary shares, by the
weighted average number of non-redeemable ordinary shares
outstanding for the periods presented.
Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not
yet effective, accounting standards, if currently adopted, would
have a material effect on our financial statements.
| Item
7A. |
Quantitative
and Qualitative Disclosures about Market Risk |
We are a smaller reporting company as defined by Rule 12b-2 of the
Exchange Act and are not required to provide the information
otherwise required under this item.
|
Item 8. |
Financial
Statements and Supplementary Data |
This information appears following Item 15 of this Report and is
included herein by reference.
|
Item 9. |
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure |
None.
|
Item 9A. |
Controls
and Procedures |
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the
objective of ensuring that information required to be disclosed in
our reports filed under the Exchange Act, such as this Report, is
recorded, processed, summarized, and reported within the time
period specified in the SEC’s rules and forms. Disclosure controls
are also designed with the objective of ensuring that such
information is accumulated and communicated to our management,
including the chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding required
disclosure. Our management evaluated, with the participation of our
current chief executive officer and chief financial officer (our
“Certifying Officers”), the effectiveness of our disclosure
controls and procedures as of December 31, 2020, pursuant to
Rule 13a-15(b) under the Exchange Act. Based upon that
evaluation, our Certifying Officers concluded that, as of December
31, 2020, our disclosure controls and procedures were not
effective.
We do not expect that our disclosure controls and procedures will
prevent all errors and all instances of fraud. Disclosure controls
and procedures, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the
objectives of the disclosure controls and procedures are met.
Further, the design of disclosure controls and procedures must
reflect the fact that there are resource constraints, and the
benefits must be considered relative to their costs. Because of the
inherent limitations in all disclosure controls and procedures, no
evaluation of disclosure controls and procedures can provide
absolute assurance that we have detected all our control
deficiencies and instances of fraud, if any. The design of
disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
Restatement of Previously Issued Financial
Statements
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as defined in
the Exchange Act Rule 13a-15(f). Our internal control over
financial reporting is designed to provide reasonable assurance to
our management and board of directors regarding the preparation and
fair presentation of published financial statements. A control
system, no matter how well designed and operated, can only provide
reasonable, not absolute, assurance that the objectives of the
control system are met. Because of these inherent limitations,
management does not expect that our internal control over financial
reporting will prevent all error and all fraud. Management
conducted an evaluation of our internal control over financial
reporting based on the framework in Internal Control—Integrated
Framework issued in 2013 by the Committee of Sponsoring
Organizations of the Treadway Commission (the “2013 Framework”).
Based on our evaluation under the 2013 Framework, management
concluded that our internal control over financial reporting was
not effective as of December 31, 2020.
In
connection with the restatement of our financial statements
included in this Amendment, our management, including our principal
executive and financial officers, have evaluated the effectiveness
of our internal control over financial reporting and
concluded that we did not maintain effective internal control over
financial reporting as of December 31, 2020 because of a material
weakness in our internal control over financial reporting described
below related to the accounting for a significant and unusual
transaction related to the private warrants.. Our management, has
concluded that our restated and revised audited financial
statements included in this Amendment are fairly stated in all
material respects in accordance with U.S. GAAP for each of the
periods presented herein.
In connection with the restatement described in “Note 2—
Restatement of Previously Issued Financial Statements” to the
accompanying financial statements included in this Amendment, our
management, could not have anticipated the issuance of the SEC
Staff Statement, and no internal control procedures could have
averted the delay in regulatory filings. We have taken immediate
action to restate our private warrants as liability, resulting in
changes in fair value of warrant liability, additional paid-in
capital and accumulated deficit as of December 31, 2020 and for the
period from September 8, 2020 (inception) through December 31,
2020.
While we have processes to identify and appropriately apply
applicable accounting requirements, we plan to enhance these
processes to better evaluate our research and understanding of the
nuances of the complex accounting standards that apply to our
financial statements. Our plans at this time include providing
enhanced access to accounting literature, research materials and
documents and increased communication among our personnel and
third-party professionals with whom we consult regarding complex
accounting applications. The elements of our remediation plan can
only be accomplished over time, and we can offer no assurance that
these initiatives will ultimately have the intended
effects.
Management’s Report on Internal Controls Over Financial
Reporting
This Annual Report on Form 10-K/A does not include a report of
management’s assessment regarding internal control over financial
reporting or an attestation report of our independent registered
public accounting firm due to a transition period established by
rules of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter, there has been
no change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting, as the circumstances
that led to the restatement of our financial statements described
in this Amendment had not yet been identified.
Our internal control over financial reporting did not result in the
proper classification of our warrants. Since their issuance on
December 17, 2020, our private warrants have been accounted for as
equity within our balance sheet. On April 12, 2021, the SEC Staff
issued the SEC Staff Statement in which the SEC Staff expressed its
view that certain terms and conditions common to SPAC warrants may
require the warrants to be classified as liabilities on the SPAC’s
balance sheet as opposed to equity. After discussion and
evaluation, taking into consideration the SEC Staff Statement,
including with our independent auditors, we have concluded that our
private warrants should be presented as liabilities with subsequent
fair value remeasurement.
To remediate this material weakness, we developed a remediation
plan with assistance from our accounting advisors and have
dedicated significant resources and efforts to the remediation and
improvement of our internal control over financial reporting. While
we have processes to identify and appropriately apply applicable
accounting requirements, we plan to enhance our system of
evaluating and implementing the complex accounting standards that
apply to our financial statements. Our plans at this time include
providing enhanced access to accounting literature, research
materials and documents and increased communication among our
personnel and third-party professionals with whom we consult
regarding complex accounting applications. The elements of our
remediation plan can only be accomplished over time, and we can
offer no assurance that these initiatives will ultimately have the
intended effects. For a discussion of management’s consideration of
the material weakness identified related to our accounting for a
significant and unusual transaction related to the warrants we
issued in connection with our initial public offering, see “Note
2—Restatement of Previously Issued Financial Statements” to the
accompanying financial statements.
| Item
9B. |
Other
Information |
None.
PART III
| Item
10. |
Directors,
Executive Officers and Corporate Governance |
Directors and Executive Officers
As of the date of the Original Filing, our directors and officers
are as follows:
| Name |
|
Age |
|
Position |
| Lisa
Harris |
|
59 |
|
Chairman
of the Board |
| Jorge
Marcos |
|
35 |
|
Chief
Executive Officer |
| Juan
Pablo Visoso |
|
43 |
|
Chief
Financial Officer |
| Alberto
Pontonio |
|
53 |
|
Director |
| Maurizio
Angelone |
|
54 |
|
Director |
| Royce
Wilson |
|
63 |
|
Director |
| Antonio
Garza |
|
61 |
|
Director |
The experience of our directors and executive officers is as
follows:
Lisa Harris, Chairman of our board of directors since
November 2020, has over 35 years of experience in banking,
investments, real estate, energy and private equity. She founded
Align Capital, LLC in May 2016 and serves as its Managing Partner.
Align Capital has investments in technology, energy, banking and
financial services, franchise, operating companies, and distressed
debt. She currently serves on the boards of several privately held
companies, including HyperGiant Industries and ClearBlade, Inc.
From December 2013 to May 2016, Ms. Harris was Managing Partner in
Cielo Private Equity where she led the firm through a successful
investment in and subsequent sale of Gravitant, Inc. to IBM. Ms.
Harris also managed and participated as an investor in technology,
energy and real estate debt funds for Cielo Private Equity. In
addition, since 2019, she has managed the family office investment
portfolio of ARH Family Partnership, which holds commercial real
estate, early stage capital in young companies, and numerous other
investments in the U.S., Canada, and the U.K. She began her career
with Bank One in the Corporate Banking division, in which she spent
nearly two decades successfully managing a team of commercial
lenders, working in transactions across several industries,
including technology, real estate, energy and corporate lending. In
2018, Ms. Harris joined the Advisory Council to The Elders, an
organization founded by Nelson Mandela to bring together
independent global leaders working together for peace and human
rights. Ms. Harris received her B.B.A. degree from the University
of Texas at Austin. Ms. Harris is well-qualified to serve on our
Board due to her extensive experience in the banking, investments,
real estate, energy and private equity.
Jorge Marcos, our Chief Executive Officer since inception,
has spent more than ten years in various operational,
investing and capital markets roles including investment banking,
risk management, corporate development and capital allocation at
public and private companies. He has been serving as a Partner at
Fifth Partners, LLC since January 2016, and Principal at Arch
Energy Partners, LLC since August 2019. While at Fifth
Partners LLC, he led a rollup of US onshore oilfield services
companies after the 2016 oil downturn, acquiring and integrating
several companies with operations across four states from 2016
through 2019. He also assists Fifth’s network companies in various
capacities in order to fulfill business development, merger and
acquisition and operational needs. Mr. Marcos was an investor
at Arias Resource Capital Management, a natural resource investment
firm that deployed institutional and sovereign capital in natural
resource projects throughout the Americas, and led the development
functions within several portfolio companies and operations, mainly
in project finance and strategic planning. Mr. Marcos began
his finance career as an investment banking analyst at J.P.
Morgan’s Latin America Merger and Acquisition group in New York in
September 2008, working in transactions across several
industries, including telecom, financials, energy, natural
resources, and real estate in Brazil, Mexico, Chile, Venezuela and
Argentina. From October 2010 to October 2011, he worked
at J.P. Morgan’s derivatives desk, where he structured and sold
derivatives to corporate clients to help them manage financing,
operational, and investment exposure to interest rate, commodity
and financial exchange risks. Mr. Marcos earned a B.S. degree
and an M.S. degree in Mechanical Engineering from Stanford
University, and an MBA from the Stanford Graduate School of
Business.
Juan Pablo Visoso, our Chief Financial Officer since
inception, has over 20 years of experience in private equity,
finance and corporate law, primarily in mergers and acquisitions,
portfolio management, banking and securities. He has been serving
as a Partner to SMPS Legal, a Mexico City based law firm, since
August 2020 and as a special external advisor to Bocel Private
Equity, an emerging Mexican private equity manager, since
August 2019. From March 2008 to July 2019, he served
as general counsel, partner, and then managing director at Nexxus
Capital, a Mexican-based private equity manager. During his time at
Nexxus, he played a leading role raising a $550 million
private equity fund in Mexico and the US, led the sourcing,
negotiation and/or closing of over 15 mid-market transactions, led
investment team assessing value through an in-depth due diligence
process, refinanced debt to reduce cost of financing through bank
negotiation, developed value creation plan and helped select
management team to run the operation, conducted business reviews
with senior management to track business performance and make
strategic and operational adjustments as needed, and was member of
Nexxus Board of Directors participating in the direction of its
strategic decisions. While at Nexxus, Mr. Visoso had an active
participation on multiple initial public offerings.
Mr. Visoso’s work has also significantly impacted the wider
private equity community, having participated in a lobbying group
to the Mexican Treasury that led to the establishment of a
framework allowing for private equity to accept pension investment.
Prior to joining Nexxus, Mr. Visoso worked at the Mexican
office of White & Case from 1999 to 2004 and from 2006 to 2008
specializing in merger and acquisitions and securities law.
Mr. Visoso has a degree in law from the Escuela Libre de
Derecho and an MBA from Austin McCombs School of Business at the
University of Texas at Austin.
Alberto Pontonio, one of our directors since December 14,
2021, has over 25 years of experience in the financial
services industry in both the US and European markets. He has been
serving as a director of Galileo Acquisition Corp., a special
purpose acquisition company that is searching for an initial
business combination, since October 2019. In
January 2019, he joined Raymond James as a financial advisor,
based in Miami. Prior to this, from 2015 to December 2018, he
traded Equity Index futures. In 2009, he co-founded Censible, an
automated investment platform that allows individual investors to
align their investments with their personal interests and social
values. Previously, Mr. Pontonio worked for Espirito Santo
Investment Banking, was a Managing Director at Bear Stearns in
London, and worked at Merrill Lynch, in New York and then in
London, as a Director in the Institutional Equity department.
Mr. Pontonio started his career in New York at Cowen & Co.
He holds a B.A. in economics from the Catholic University in Milan,
Italy. Mr. Pontonio is well-qualified to serve on our Board
due to his extensive experience in the financial services industry
in both the US and European markets.
Maurizio Angelone, one of our directors since December 14,
2021, has spent more than 20 years in senior executive roles.
He has been serving as Vice President for Americas Region at HMD
Global since December 2016, where he helped HMD establish its
newly launched smartphone business unit in North America and Latin
America. Prior to that, from January 2012 to
November 2012, Mr. Angelone served as Vice President
& General Manager for Europe Middle East & Africa Region at
Motorola Corporate. He led Motorola’s Latin American division as
Senior Vice President form September 2010 to
December 2011 and Nokia’s Latin American division as Senior
Vice President from June 2003 to June 2008, where he was
responsible for managing the entire P&L for Latin America
markets in the Caribbean, Central America, Mexico and South
America. While at Nokia, Mr. Angelone served as Global Account
Executive to manage one of Nokia’s largest customers, Telefónica
S.A., which has extensive operations in Europe and Latin America
and served as the Country Manager & General Manager for Nokia
Italy from April 2000 to May 2003. Mr. Angelone
served as Chief Executive Officer for My Screen Mobile Inc. (Pink
Sheets: MYSL, Frankfurt: WICI), provider of a unique mobile
advertising solution for mobile network operators, media companies
and advertising partners globally, from April 2009 to
September 2010. In 2014, he co-founded Imagination Unwired, a
mobile communication and advertising company and currently a
technology provider for various mobile network operators in the
Latin America region. Mr. Angelone earned a bachelor’s degree
in Electronic Engineering from Universita’ La Sapienza
(Rome/Italy). Mr. Angelone is well-qualified to serve on our
Board due to his extensive experience in the telecommunication
industry.
Royce
Wilson, one of our directors since December 14,
2021, is a modern media executive who has been serving as the
Executive Chairman and CEO of Dreamcatcher Media, LLC since
January 2011. Dreamcatcher Media owns Dreamcatcher
Broadcasting, a television group comprised of several stations:
WNEP, an affiliate of ABC serving Wilkes Barre, PA; WTKR, a CBS
affiliate serving Norfolk, VA; and previously WGNT, an affiliate of
CW serving Norfolk, VA., which was sold to Nexstar Broadcasting in
2019. In March 2020, Mr. Wilson was named Executive
Chairman of CoxReps and Gamut which is owned by the Apollo
Investment Corp. Mr. Wilson has also been serving as an active
partner at Whisper Advisors, a strategic advisory firm that
counsels companies from early stage startups to established global
firms in media, e-commerce, technology, and consumer products since
2017. Prior to that, from January 2014 to December 2018,
Mr. Wilson was a partner at New Form Digital, a studio that
develops and produces scripted content for global digital platforms
and linear networks, and which was created in partnership with
Brian Grazer, Ron Howard, Craig Jacobson, Jim Wiatt and Discovery
Communications. New Form Digital was sold to Team Whistle in 2018
where Mr. Wilson serves as a Board Observer. He served as
Executive Chairman of Timeline Labs, a big-data social intelligence
network from 2011 to 2015) and successfully guided the company to
an acquisition by SeaChange International, Inc. (NASDAQ: SEAC), a
TV software-services company. Prior to these recent endeavors,
Mr. Wilson was President of Tribune Broadcasting and Chief
Revenue Officer of The Tribune Company from 2008 to 2011. Earlier
in his career, Mr. Wilson held top-level executive roles with
various media and entertainment companies, including as the
President of FOX Television Network from 2004 to 2008, founder and
President of NBC Enterprises from 2000 to 2004, and founder,
President and Chief Operating Officer of CBS Enterprises from 1996
to 2000. Mr. Wilson received a Bachelor’s Degree in Business
Administration and Finance from the University of Arkansas at
Fayatteville. He currently serves as member of the Advisory Board
at Walton Business School at The University of Arkansas. He also
served on the Boards of the USO and San Diego Zoo; and as a member
of the Board of Trustees for Southern Methodist University, the
Executive Board of the Cox School of Business and Meadows School of
the Arts at Southern Methodist University. He received a
distinguished Alum recognition from the University of Arkansas and
was inducted into the Arkansas Entertainment Hall of Fame.
Mr. Wilson is well-qualified to serve on our Board due to his
extensive experience in the media industry.
Antonio Garza, one of our directors since December 14,
2021, has served as Counsel in the Mexico City office of White
& Case LLP since June of 2009 and previously as US Ambassador
to Mexico from 2002 to 2009. Mr. Garza has acted as a director
to both publicly traded and privately held companies in both the US
and Mexico and is acknowledged as one of the top experts on
U.S.-Mexico relations and the business and political environments
of both nations. Garza holds a BBA degree from The University of
Texas at Austin and a JD degree from Southern Methodist University
School of Law. He is a member of the State Bar of Texas, the
District of Columbia Bar and is admitted to practice before the
United States Supreme Court. Mr. Garza is well-qualified to serve
on our Board due to his extensive experience in cross-border
corporate transactions. Mr. Garza has been serving as a member of
the board of directors of Kansas City Southern (NYSE: KSU), a
transportation holding company, and Chairman to its subsidiary,
Kansas City Southern de Mexico, a rail-based transportation
company, since May 2010. He has also been serving on the board of
directors of MoneyGram (NYSE: MGI), a global money transfer
company, since May 2012.
Special Advisors
Dan Hunt, one of our special advisors, has over 20
years of investment experience in real estate, media, bio tech and
sports, including soccer and NFL. He has been serving as President
of FC Dallas since 2014. He is also a member of MLS’ Board of
Governors and the league’s Business Ventures Committee. Mr. Hunt
graduated from St. Mark’s school of Texas in 1996 and earned a BA
from SMU in 2000.
Guillermo Rivaben, one of our special advisors, has
been serving as Co-Founder and Managing Partner at Serac Partners,
a TMT investment advisory firm, since April 2019. He served as
Chief Executive Officer of S.A. La Nación, a traditional
Argentinean multimedia group, from February 2014 to
April 2019. Prior to that, Mr. Rivaben served as Chief
Executive Officer of Telecom Personal, the leading mobile operator
in Argentina, from August 2003 to January 2014. From 2000
to 2003, he was Regional Marketing VP at AT&T Latinoamerica for
Brazil and Argentina, managing B2B and B2C telecommunication and
e-business services in the region. He served as Mobile Business
Unit CMO at Telecom Argentina to develop and launch its mobile
operations from 1994 to 1999. He holds an electronic engineering
master degree form Universidad de Buenos Aires.
Luca Giacomettione, one of our special advisors, has
been serving as Chairman and Chief Executive Officer of Galileo
Acquisition Corp., a special purpose acquisition company, since
July 2019. He has over 30 years of experience in private
equity and as a sponsor of blank check companies, having previously
led four blank check companies in Italy. He launched the first
blank check company under Italian law in 2011. He sponsored
Glenalta in 2017 (merged with CFT S.p.A.), GF in 2015 (merged with
Orsero S.p.A.), IPO Challenger in 2014 (merged with Italian Wine
Brands S.p.A.), and MII1 in 2011 (merged with SeSa S.p.A.). In 2005
Mr. Giacometti co-founded European Co-investment Partners LLP,
thereby forming Capital Dynamics’ private equity co-investment
business. Capital Dynamics is an independent global private asset
management business commanding over $16 billion in assets
under management and advisory service arrangements, more than 700
fund investments, over 350 fund general partner relationships and a
global footprint of 11 offices. Mr. Giacometti remains a
Senior Adviser to Capital Dynamics. He has been an independent
director of Digital Magics (DM:XMIL) since 2012. Digital Magics is
a large Italian digital incubator, listed on the Milan Stock
Exchange, with more than 70 accelerated startups. From 2003 to
2005, he worked at the Ferrero family office in Italy, where he was
in charge of its private equity activities. From 1996 to 2002,
Mr. Giacometti founded and managed General Electric’s private
equity business in Italy. Mr. Giacometti built a private
equity portfolio including Cantieri Rodriguez, Nuova Bianchi,
Bafin, SM Logistics, Vimercati, GMV Martini MARR and Euralcom,
sometimes serving on the board of directors of these companies
Prior to this, Mr. Giacometti was deputy director of merchant
banking at Banca Commerciale Italiana, where he worked on private
equity investments in Italian companies including Grove, IMA, and
Industrie Ilpea. Prior to joining Banca Commerciale Italiana,
Mr. Giacometti worked in the syndications group at Citibank in
Milan where he was responsible for the syndication of Italian MBOs.
Mr. Giacometti holds a degree in business and economics from
the Luigi Bocconi School of Business in Milan.
Alberto Recchi, one of our special advisors, has been
serving as Chief Financial Officer of Galileo Acquisition Corp.
since July 2019. He has over 15 years of experience in
corporate and leveraged finance, mergers and acquisitions, and
principal investing, in both the North American and Western
European markets. In 2019, he founded Ampla Capital, a merchant
bank, based in New York, which focuses on proprietary direct
co-investments, in both established and growth-oriented SMEs in the
North American and Western European markets. Previously, from 2016
to 2019, he was a Managing Director at MC Square Capital, a
co-investment platform and cross-border boutique merchant bank.
Prior to this, Mr. Recchi spent 12 years at Credit
Suisse, where he worked in the Private Banking and Wealth
Management Division in London for three years, advising
corporate treasury departments, single and multi-family offices,
ultra-high net worth individuals, across all product offerings,
including direct investments, asset management, custody, corporate
finance, structured finance, and private wealth management. Prior
to that he worked in the Investment Banking Division for
nine years, advising financial sponsors in the U.S. and E.U.,
structuring and executing LBOs, IPOs and M&A deals, based in
New York first and London thereafter. During his tenure at Credit
Suisse, Mr. Recchi developed a network of relationships with
single and multi-family offices, and with private equity players in
North America and Western Europe. Alberto Recchi holds an MBA from
Columbia Business School and a MS, BS in Aeropsace Engineering from
the Polytechnic of Turin.
We currently expect our advisors to (i) assist us in sourcing
and negotiating with potential business combination targets,
(ii) provide their business insights when we assess potential
business combination targets and (iii) upon our request,
provide their business insights as we work to create additional
value in the businesses that we acquire. In this regard, they will
fulfill some of the same functions as our board members. However,
they have no written advisory agreement with us. Additionally,
except as disclosed under “Principal Shareholders” and “Certain
Transactions,” our advisors have no other employment or
compensation arrangements with us. Moreover, our advisors will not
be under any fiduciary obligations to us nor will they perform
board or committee functions, nor will they have any voting or
decision making capacity on our behalf. They will also not be
required to devote any specific amount of time to our efforts or be
subject to the fiduciary requirements to which our board members
are subject. Accordingly, if any of our advisors becomes aware of a
business combination opportunity which is suitable for any of the
entities to which he has fiduciary or contractual obligations
(including other blank check companies), he will honor his
fiduciary or contractual obligations to present such business
combination opportunity to such entity, and only present it to us
if such entity rejects the opportunity. We may modify or expand our
roster of advisors as we source potential business combination
targets or create value in businesses that we may
acquire.
Number and Terms of Office of Officers and Directors
Our board of directors is divided into two classes with only one
class of directors being appointed in each year and each class
(except for those directors appointed prior to our first annual
general meeting) serving a two-year term. The term of office of the
first class of directors, consisting of Messrs. Angelone, Wilson
and Garza, will expire at our first annual general meeting. The
term of office of the second class of directors, consisting of Ms.
Harris and Mr. Pontonio, will expire at the second annual general
meeting. In accordance with NYSE corporate governance requirements,
we are not required to hold an annual general meeting until one
full year after our first fiscal year end following our listing on
the NYSE.
Our officers are elected by the board of directors and serve at the
discretion of the board of directors, rather than for specific
terms of office. Our board of directors is authorized to appoint
persons to the offices set forth in our memorandum and articles of
association as it deems appropriate. Our memorandum and articles of
association provide that our officers may consist of a Chief
Executive Officer, President, Chief Financial Officer, Vice
Presidents, Secretary, Assistant Secretaries, Treasurer and such
other offices as may be determined by the board of
directors.
Committees of the Board of Directors
Our board of directors has three standing committees: an audit
committee, a compensation committee and a nominating and corporate
governance committee. Subject to phase-in rules and a limited
exception, NYSE rules and Rule 10A-3 of the Exchange Act require
that the audit committee of a listed company be comprised solely of
independent directors, and NYSE rules require that the compensation
committee and nominating and corporate governance committee of a
listed company each be comprised solely of independent
directors.
Audit Committee
We have established an audit committee of the board of directors.
Messrs. Angelone, Wilson and Garza serve as members of our audit
committee, and Mr. Wilson chairs the audit committee. Under
the NYSE listing standards and applicable SEC rules, we are
required to have at least three members of the audit committee, all
of whom must be independent. Each of Messrs. Angelone, Wilson and
Garza meet the independent director standard under NYSE listing
standards and under Rule 10-A-3(b)(1) of the Exchange
Act.
We have adopted an audit committee charter, which details the
principal functions of the audit committee, including:
|
· |
the appointment, compensation,
retention, replacement, and oversight of the work of the
independent registered public accounting firm engaged by us; |
|
· |
pre-approving all audit and
permitted non-audit services to be provided by the independent
registered public accounting firm engaged by us, and establishing
pre-approval policies and procedures; |
|
· |
setting clear hiring policies for
employees or former employees of the independent registered public
accounting firm, including but not limited to, as required by
applicable laws and regulations; |
|
· |
setting clear policies for audit
partner rotation in compliance with applicable laws and
regulations; |
|
· |
obtaining and reviewing a report,
at least annually, from the independent registered public
accounting firm describing (i) the independent registered
public accounting firm’s internal quality-control procedures,
(ii) any material issues raised by the most recent internal
quality-control review, or peer review, of the audit firm, or by
any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or
more independent audits carried out by the firm and any steps taken
to deal with such issues and (iii) all relationships between
the independent registered public accounting firm and us to assess
the independent registered public accounting firm’s
independence; |
|
· |
reviewing and approving any related
party transaction required to be disclosed pursuant to
Item 404 of Regulation S-K promulgated by the SEC prior
to us entering into such transaction; and |
|
· |
reviewing with management, the
independent registered public accounting firm, and our legal
advisors, as appropriate, any legal, regulatory or compliance
matters, including any correspondence with regulators or government
agencies and any employee complaints or published reports that
raise material issues regarding our financial statements or
accounting policies and any significant changes in accounting
standards or rules promulgated by the Financial Accounting
Standards Board, the SEC or other regulatory authorities. |
Financial Experts on Audit Committee
The audit committee will at all times be composed exclusively
of “independent directors” who are “financially literate” as
defined under the NYSE listing standards. The NYSE listing
standards define “financially literate” as being able to read and
understand fundamental financial statements, including a company’s
balance sheet, income statement and cash flow statement.
In addition, we must certify to the NYSE that the committee has,
and will continue to have, at least one member who has past
employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable
experience or background that results in the individual’s financial
sophistication. The board of directors has determined that Messrs.
Angelone, Wilson and Garza each qualify as an “audit committee
financial expert,” as defined under rules and regulations of the
SEC.
Compensation Committee
We have established a compensation committee of the board of
directors. Messrs. Pontonio, Angelone and Wilson serve as members
of our compensation committee. Under the NYSE listing standards and
applicable SEC rules, we are required to have at least two members
of the compensation committee, all of whom must be independent.
Messrs. Pontonio, Angelone and Wilson are independent and Mr.
Angelone chairs the compensation committee.
We have adopted a compensation committee charter, which details the
principal functions of the compensation committee,
including:
|
· |
reviewing and approving on an
annual basis the corporate goals and objectives relevant to our
Chief Executive Officer’s compensation, if any is paid by us,
evaluating our Chief Executive Officer’s performance in light of
such goals and objectives and determining and approving the
remuneration (if any) of our Chief Executive Officer based on such
evaluation; |
|
· |
reviewing and approving on an
annual basis the compensation, if any is paid by us, of all of our
other officers; |
|
· |
reviewing on an annual basis our
executive compensation policies and plans; |
|
· |
implementing and administering our
incentive compensation equity-based remuneration plans; |
|
· |
assisting management in complying
with our proxy statement and annual report disclosure
requirements; |
|
· |
approving all special perquisites,
special cash payments and other special compensation and benefit
arrangements for our officers and employees; |
|
· |
if required, producing a report on
executive compensation to be included in our annual proxy
statement; and |
|
· |
reviewing, evaluating and
recommending changes, if appropriate, to the remuneration for
director |
Notwithstanding the foregoing, as indicated above, no compensation
of any kind, including finders, consulting or other similar fees,
will be paid to any of our existing shareholders, officers,
directors or any of their respective affiliates, prior to, or for
any services they render in order to effectuate the consummation of
an initial business combination. Accordingly, it is likely that
prior to the consummation of an initial business combination, the
compensation committee will only be responsible for the review and
recommendation of any compensation arrangements to be entered into
in connection with such initial business combination.
The charter also provides that the compensation committee may, in
its sole discretion, retain or obtain the advice of a compensation
consultant, legal counsel or other adviser and will be directly
responsible for the appointment, compensation and oversight of the
work of any such adviser. However, before engaging or receiving
advice from a compensation consultant, external legal counsel or
any other adviser, the compensation committee will consider the
independence of each such adviser, including the factors required
by the NYSE and the SEC.
Nominating and Corporate Governance Committee
We have established a nominating and corporate governance
committee. The members of our nominating and corporate governance
are Messrs. Pontonio, Angelone and Wilson. Mr. Pontonio serves as
chair of the nominating and corporate governance
committee.
The primary purposes of our nominating and corporate governance
committee will be to assist the board in:
|
· |
identifying, screening and
reviewing individuals qualified to serve as directors and
recommending to the board of directors candidates for nomination
for election at the annual general meeting or to fill vacancies on
the board of directors; |
|
· |
developing and recommending to the
board of directors and overseeing implementation of our corporate
governance guidelines; |
|
· |
coordinating and overseeing the
annual self-evaluation of the board of directors, its committees,
individual directors and management in the governance of the
company; and |
|
· |
reviewing on a regular basis our
overall corporate governance and recommending improvements as and
when necessary. |
The nominating and corporate governance committee will be governed
by a charter that complies with the rules of the NYSE.
Code of Ethics
Prior to the consummation of our initial public offering, we will
have adopted a Code of Ethics applicable to our directors, officers
and employees. We will file a copy of our Code of Ethics and our
audit and compensation committee charters as exhibits to the
registration statement of which this report is a part. You will be
able to review these documents by accessing our public filings at
the SEC’s web site at www.sec.gov. In addition, a copy of the
Code of Ethics will be provided without charge upon request from
us. We intend to disclose any amendments to or waivers of certain
provisions of our Code of Ethics in a Current Report on Form 8-K.
See the section of this prospectus entitled “Where You Can Find
Additional Information.”
| Item
11. |
Executive
Compensation |
Compensation Discussion and Analysis
No executive officer has received any cash compensation for
services rendered to us. Since December 2020, we have paid Alberto
Pontonio, one of our directors, an aggregate fee of $3,000 per
month for providing us with office space, utilities and secretarial
services. In addition, we have entered into an Advisory Agreement
with Fifth Partners, an affiliate of our sponsor and our Chief
Executive Officer, pursuant to which we pay a total of $7,000 per
month for office space and advisory services relating to our search
for, and consummation of, an initial business combination. Fifth
Partners will also be entitled to be reimbursed for any
out-of-pocket expenses.
Other than the approximately $3,000 per month administrative fee,
the approximately $7,000 per month advisory fee and the repayment
of any loans made by our sponsor to us, no compensation of any
kind, including finders, consulting or other similar fees, will be
paid to any of our existing shareholders, including our directors,
or any of their respective affiliates, prior to, or for any
services they render in order to effectuate, the consummation of a
business combination. However, such individuals will be reimbursed
for any out-of-pocket expenses incurred in connection with
activities on our behalf such as identifying potential target
businesses and performing due diligence on suitable business
combinations. There is no limit on the amount of these
out-of-pocket expenses and there will be no review of the
reasonableness of the expenses by anyone other than our board of
directors and audit committee, which includes persons who may seek
reimbursement, or a court of competent jurisdiction if such
reimbursement is challenged.
After the completion of our initial business combination, directors
or members of our management team who remain with us may be paid
consulting, management or other fees from the combined company. All
of these fees will be fully disclosed to shareholders, to the
extent then known, in the tender offer materials or proxy
solicitation materials furnished to our shareholders in connection
with a proposed business combination. It is unlikely the amount of
such compensation will be known at the time, because the directors
of the post-combination business will be responsible for
determining executive and director compensation. Any compensation
to be paid to our officers will be determined by our compensation
committee.
We do not intend to take any action to ensure that members of our
management team maintain their positions with us after the
consummation of our initial business combination, although it is
possible that some or all of our executive officers and directors
may negotiate employment or consulting arrangements to remain with
us after the initial business combination. The existence or terms
of any such employment or consulting arrangements to retain their
positions with us may influence our management’s motivation in
identifying or selecting a target business but we do not believe
that the ability of our management to remain with us after the
consummation of our initial business combination will be a
determining factor in our decision to proceed with any potential
business combination. We are not party to any agreements with our
executive officers and directors that provide for benefits upon
termination of employment.
| Item
12. |
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters |
The following table sets forth information regarding the beneficial
ownership of our ordinary shares as of March 31, 2021 based on
information obtained from the persons named below, with respect to
the beneficial ownership of ordinary shares, by:
|
● |
each
person known by us to be the beneficial owner of more than 5% of
our outstanding ordinary shares; |
|
● |
each
of our executive officers and directors that beneficially owns our
ordinary shares; and |
|
● |
all
our executive officers and directors as a group. |
In the table below, percentage ownership is based on 14,500,000
ordinary shares, issued and outstanding as of March 30, 2021. The
table below does not include the ordinary shares underlying the
private placement warrants held or to be held by our officers or
sponsor because these securities are not exercisable within 60 days
of this report.
Unless otherwise indicated, we believe that all persons named in
the table have sole voting and investment power with respect to all
ordinary shares beneficially owned by them.
|
Name and Address of Beneficial Owner (1) |
|
Number of
Shares
Beneficially
Owned
|
|
|
Approximate
Percentage
of Outstanding
Ordinary
Shares
|
|
|
ATAC Limited Partnership (our sponsor)(2)(3) |
|
|
2,875,000 |
|
|
|
20 |
% |
| Lisa
Harris |
|
|
— |
|
|
|
— |
|
| Jorge
Marcos |
|
|
— |
|
|
|
— |
|
| Juan
Pablo Visoso |
|
|
— |
|
|
|
— |
|
|
Alberto Pontonio |
|
|
|
|
|
|
|
|
|
Maurizio Angelone |
|
|
— |
|
|
|
— |
|
|
Antonio Garza |
|
|
— |
|
|
|
— |
|
| All
directors and executive officers as a group (6 individuals)(2) |
|
|
2,875,000 |
|
|
|
20 |
% |
|
Other 5% Stockholders |
|
|
|
|
|
|
|
|
|
Aristeia Capital L.L.C. (3) |
|
|
700,000 |
|
|
|
4.83 |
% |
|
Hartree Partners, LP (4) |
|
|
750,000 |
|
|
|
5.2 |
% |
| * |
less than 1% |
| (1) |
Unless otherwise noted, the
business address of each of the following entities or individuals
is 16400 Dallas Pkwy #305, Dallas, TX 75248. |
| (2) |
ATAC Holdings LLC is the general
partner of our sponsor. ATAC Holdings LLC is controlled by Matthew
Mathison, Joseph Drysdale and Jeffrey Brownlow, each of whom is a
Managing Partner of Fifth Partners. Consequently, such persons may
be deemed the beneficial owner of the shares held by our sponsor
and have voting and dispositive control over such securities. Such
persons disclaim beneficial ownership of any shares other than to
the extent he may have a pecuniary interest therein, directly or
indirectly. Each of our officers and directors and certain of our
strategic advisors are members of our sponsor. |
| (3) |
According to a Schedule 13G filed
on February 16, 2021, Aristeia Capital L.L.C. acquired 700,000
ordinary shares. The business address for the reporting persons is
One Greenwich Plaza, 3rd Floor, Greenwich, CT
06830. |
| (4) |
According to Schedule 13G filed on
February 12, 2021, Hartree Partners, LP acquired 750,000 ordinary
shares. The business address for the reporting person is 1185
Avenue of the Americas, New York, NY 10036. |
Securities Authorized for Issuance under Equity Compensation
Table
None
Changes in Control
None.
| Item
13. |
Certain
Relationships and Related Transactions, and Director
Independence |
In September 2020, the sponsor paid $25,000 to cover certain
offering costs in consideration for 2,875,000 of our ordinary
shares The founder shares included an aggregate of up to 375,000
shares that were subject to forfeiture depending on the extent to
which the underwriters’ over-allotment option was exercised, so
that the number of founder shares would equal, on an as-converted
basis, approximately 20% of our issued and outstanding ordinary
shares after the initial public offering (assuming the initial
shareholders do not purchase any public shares in the initial
public offering and excluding the representative shares). As a
result of the underwriters’ election to fully exercise their
over-allotment option, no founder shares are currently subject to
forfeiture.
Since December 2020, we have paid Fifth Partners, an affiliate of
our sponsor and our Chief Executive Officer, approximately $7,000
per month for office space, and advisory services relating to our
search for, and consummation of, an initial business combination.
In addition, we have paid Alberto Pontonio, one of our directors,
approximately $3,000 for certain general and administrative
services, including office space, utilities and secretarial
support, as we may require from time to time. Upon completion of
our initial business combination or our liquidation, we will cease
paying these monthly fees.
Other than the foregoing, no compensation of any kind, including
any finder’s fee, reimbursement, consulting fee or monies in
respect of any payment of a loan, will be paid by us to our
sponsor, officers and directors, or any affiliate of our sponsor or
officers, prior to, or in connection with any services rendered in
order to effectuate, the consummation of an initial business
combination (regardless of the type of transaction that it is).
However, these individuals will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such
as identifying potential target businesses and performing due
diligence on suitable business combinations. We do not have a
policy that prohibits our sponsor, executive officers or directors,
or any of their respective affiliates, from negotiating for the
reimbursement of out-of-pocket expenses by a target business. Our
audit committee will review on a quarterly basis all payments that
were made to our sponsor, officers, directors or our or their
affiliates and will determine which expenses and the amount of
expenses that will be reimbursed. There is no cap or ceiling on the
reimbursement of out-of-pocket expenses incurred by such persons in
connection with activities on our behalf.
Prior to the closing of our initial public offering, our sponsor
loaned us $122,465 under an unsecured promissory note, which were
used for a portion of the expenses of our initial public offering.
The loans were fully repaid upon the closing of our initial public
offering.
In addition, in order to finance transaction costs in connection
with an intended initial business combination, our sponsor or an
affiliate of our sponsor or certain of our officers and directors
may, but are not obligated to, loan us funds on a non-interest
bearing basis as may be required. If we complete an initial
business combination, we would repay such loaned amounts. In the
event that the initial 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 at a price of $1.00 per warrant at
the option of the lender. The warrants would be identical to the
private placement warrants, including as to exercise price,
exercisability and exercise period. We do not expect to seek loans
from parties other than our sponsor or an affiliate of our sponsor
as we do not believe third parties will be willing to loan such
funds and provide a waiver against any and all rights to seek
access to funds in our trust account.
After our initial business combination, members of our management
team who remain with us may be paid consulting, management or other
fees from the combined company with any and all amounts being fully
disclosed to our stockholders, to the extent then known, in the
tender offer or proxy solicitation materials, as applicable,
furnished to our stockholders. It is unlikely the amount of such
compensation will be known at the time of distribution of such
tender offer materials or at the time of a stockholder meeting held
to consider our initial business combination, as applicable, as it
will be up to the directors of the post-combination business to
determine executive and director compensation.
We have entered into a registration and shareholder rights
agreement with respect to the private placement warrants, the
warrants issuable upon conversion of working capital loans (if any)
and the shares of Class A ordinary shares issuable upon exercise of
the foregoing and upon conversion of the founder shares.
|
Item 14. |
Principal
Accountant Fees and Services |
The firm of WithumSmith+Brown, PC, or Withum, acts as our
independent registered public accounting firm. The following is a
summary of fees paid to Withum for services rendered.
Audit Fees. During the period from September 8, 2020
(inception) through December 31, 2020, fees for our independent
registered public accounting firm were approximately $55,385 for
the services Withum performed in connection with our Initial Public
Offering and the audit of our December 31, 2020 financial
statements included in this Annual Report on Form 10-K.
Audit-Related Fees. During the period from September 8, 2020
(inception) through December 31, 2020, our independent registered
public accounting firm did not render assurance and related
services related to the performance of the audit or review of
financial statements.
Tax Fees. During the period from September 8, 2020
(inception) through December 31, 2020, our independent registered
public accounting firm did not render services to us for tax
compliance, tax advice and tax planning.
All Other Fees. During the period from September 8, 2020
(inception) through December 31, 2020, there were no fees billed
for products and services provided by our independent registered
public accounting firm other than those set forth above.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our Initial
Public Offering. As a result, the audit committee did not
pre-approve all of the foregoing services, although any services
rendered prior to the formation of our audit committee were
approved by our board of directors. Since the formation of our
audit committee, and on a going-forward basis, the audit committee
has and will pre-approve all auditing services and permitted
non-audit services to be performed for us by our auditors,
including the fees and terms thereof (subject to the de minimis
exceptions for non-audit services described in the Exchange Act
which are approved by the audit committee prior to the completion
of the audit).
Pre-Approval Policy
Our audit committee was formed upon the consummation of our initial
public offering. As a result, the audit committee did not
pre-approve all of the foregoing services, although any services
rendered prior to the formation of our audit committee were
approved by our board of directors. Since the formation of our
audit committee, and on a going-forward basis, the audit committee
has and will pre-approve all auditing services and permitted
non-audit services to be performed for us by our auditors,
including the fees and terms thereof (subject to the de minimis
exceptions for non-audit services described in the Exchange Act
which are approved by the audit committee prior to the completion
of the audit).
PART IV
|
Item 15. |
Exhibits,
Financial Statement Schedules |
|
(a) |
The
following documents are filed as part of this Form
10-K: |
|
(1) |
Financial
Statements: |
| |
(2) |
Financial
Statement Schedules: |
None.
We hereby file as part of this Report the exhibits listed in the
attached Exhibit Index. Exhibits which are incorporated herein by
reference can be inspected and copied at the public reference
facilities maintained by the SEC, 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Copies of such material can also be
obtained from the Public Reference Section of the SEC, 100 F
Street, N.E., Washington, D.C. 20549, at prescribed rates or on the
SEC website at www.sec.gov.
| Item
16. |
Form
10-K Summary |
Not applicable.
AMERICAS TECHNOLOGY ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENT
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Americas Technology Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Americas
Technology Acquisition Corp. (the “Company”) as of December 31,
2020, the related statement of operations, changes in shareholders’
equity and cash flows for the period from September 8, 2020
(inception) through December 31, 2020 and the related notes
(collectively referred to as the “financial statements”). In our
opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31,
2020, and the results of its operations and its cash flows for the
period from September 8, 2020 (inception) through December 31,
2020, in conformity with accounting principles generally accepted
in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 1 to the financial statements, if the Company is unable to
raise additional funds to alleviate liquidity needs as well as
complete a Business Combination by the close of business on
December 17, 2021, then the Company will cease all operations
except for the purpose of liquidating. This date for mandatory
liquidation and subsequent dissolution raises substantial doubt
about the Company’s ability to continue as a going concern. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audit. We are a public
accounting firm registered with the Public Company Accounting
Oversight Board (United States) (“PCAOB”) and are required to be
independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. As part of our audit we are required to obtain an
understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audit also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis
for our opinion.
|
/s/
WithumSmith+Brown, PC |
|
We have served as the Company’s auditor since 2020.
New York, New York
June 30, 2021
AMERICAS TECHNOLOGY ACQUISITION CORP.
BALANCE SHEET (As Restated)
DECEMBER 31, 2020
| ASSETS |
|
|
|
|
Current assets |
|
|
|
|
|
Cash |
|
$ |
1,253,202 |
|
|
Prepaid expenses |
|
|
331,863 |
|
| Total
Current Assets |
|
|
1,585,065 |
|
| |
|
|
|
|
|
Cash and investments held in Trust Account |
|
|
116,151,909 |
|
|
TOTAL ASSETS |
|
$ |
117,736,974 |
|
| |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities – accrued expenses |
|
$ |
8,292 |
|
|
Derivative warrant liabilities |
|
|
5,450,000 |
|
|
Total liabilities |
|
|
5,458,292 |
|
| |
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
| |
|
|
|
|
|
Ordinary Shares subject to possible redemption, 10,621,651 shares
at a redemption value of $10.10 per share |
|
|
107,278,675 |
|
| |
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized;
no shares issued and outstanding |
|
|
— |
|
|
Ordinary Shares, $0.0001 par value; 500,000,000 shares authorized;
3,878,349 shares issued and outstanding (excluding 10,621,651
shares subject to possible redemption) |
|
|
388 |
|
|
Additional paid-in capital |
|
|
6,248,466 |
|
|
Accumulated deficit |
|
|
(1,248,847 |
) |
|
Total Shareholders’ Equity |
|
|
5,000,007 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
117,736,974 |
|
The accompanying notes are an integral part of the financial
statements.
AMERICAS TECHNOLOGY ACQUISITION CORP
STATEMENT OF OPERATIONS (As
Restated)
FOR THE PERIOD FROM SEPTEMBER 8, 2020 (INCEPTION) THROUGH
DECEMBER 31, 2020
|
Formation and operating costs |
|
$ |
36,378 |
|
|
Loss from operations |
|
|
(36,378 |
) |
| |
|
|
|
|
| Other
income (loss): |
|
|
|
|
| Change
in fair value of warrant liabilities |
|
|
(1,199,000 |
) |
|
Transaction costs allocable to warrant liabilities |
|
|
(15,378 |
) |
|
Interest earned on investments held in Trust Account |
|
|
1,909 |
|
| |
|
|
|
|
|
Net Loss |
|
$ |
(1,248,847 |
) |
| |
|
|
|
|
|
Weighted average shares outstanding of redeemable ordinary
shares |
|
|
11,500,000 |
|
|
Basic and diluted net loss per share, redeemable ordinary
shares |
|
$ |
(0.00 |
) |
| |
|
|
|
|
|
Weighted average shares outstanding of non-redeemable ordinary
shares |
|
|
2,670,330 |
|
|
Basic and diluted net loss per share, non-redeemable ordinary
shares |
|
$ |
(0.47 |
) |
The accompanying notes are an integral part of these financial
statements.
AMERICAS TECHNOLOGY ACQUISITION CORP.
STATEMENT OF CHANGES IN
SHAREHOLDERS’ EQUITY (As Restated)
FOR THE PERIOD FROM SEPTEMBER 8, 2020 (INCEPTION) THROUGH
DECEMBER 31, 2020
| |
|
Ordinary Shares |
|
|
Additional
Paid in
|
|
|
Accumulated |
|
|
Total
Shareholders’ |
|
| |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
| Balance —
September 8, 2020 (inception) |
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares to Sponsor |
|
|
2,875,000 |
|
|
|
287 |
|
|
|
24,713 |
|
|
|
— |
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of 11,500,000 Units, net of underwriting discounts and
offering costs |
|
|
11,500,000 |
|
|
|
1,150 |
|
|
|
112,301,242 |
|
|
|
— |
|
|
|
112,302,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution in excess of fair value of private warrants |
|
|
— |
|
|
|
— |
|
|
|
1,199,000 |
|
|
|
— |
|
|
|
1,199,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Representative Shares |
|
|
125,000 |
|
|
|
13 |
|
|
|
1,124 |
|
|
|
— |
|
|
|
1,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares subject to possible redemption |
|
|
(10,621,651 |
) |
|
|
(1,062 |
) |
|
|
(107,277,613 |
) |
|
|
— |
|
|
|
(107,278,675 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,243,847 |
) |
|
|
(1,243,847 |
) |
|
Balance — December 31, 2020 |
|
|
3,878,349 |
|
|
$ |
388 |
|
|
$ |
6,248,466 |
|
|
$ |
(1,243,847 |
) |
|
$ |
5,000,007 |
|
The accompanying notes are an integral part of these financial
statements.
AMERICAS TECHNOLOGY ACQUISITION CORP.
STATEMENT OF CASH FLOWS (As
Restated)
FOR THE PERIOD FROM SEPTEMBER 8, 2020 (INCEPTION) THROUGH
DECEMBER 31, 2020
| Cash Flows
from Operating Activities: |
|
|
|
|
Net loss |
|
$ |
(1,248,847 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
Formation costs paid by Sponsor in exchange for issuance of founder
shares |
|
|
5,000 |
|
|
Change in fair value of warrant liabilities |
|
|
1,199,000 |
|
|
Transaction costs allocable to warrant liabilities |
|
|
15,378 |
|
|
Interest earned on investments held in Trust Account |
|
|
(1,909 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Prepaid expenses |
|
|
(331,863 |
) |
|
Accrued expenses |
|
|
8,292 |
|
|
Net cash used in operating activities |
|
$ |
(354,949 |
) |
| |
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
Investment of cash in Trust Account |
|
|
(116,150,000 |
) |
|
Net cash used in investing activities |
|
$ |
(116,150,000 |
) |
| |
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
Proceeds from sale of Units, net of underwriting discounts
paid |
|
|
112,700,000 |
|
|
Proceeds from sale of Private Warrants |
|
|
5,450,000 |
|
|
Proceeds from promissory note – related party |
|
|
38,496 |
|
|
Repayment of promissory note – related party |
|
|
(122,465 |
) |
|
Payments of offering costs |
|
|
(307,880 |
) |
|
Net cash provided by financing activities |
|
$ |
117,758,151 |
|
| |
|
|
|
|
|
Net Change in Cash |
|
|
1,253,202 |
|
|
Cash – Beginning of period |
|
|
— |
|
|
Cash – Ending of period |
|
$ |
1,253,202 |
|
| |
|
|
|
|
|
Non-Cash Investing and Financing Activities: |
|
|
|
|
|
Initial classification of ordinary shares subject to possible
redemption |
|
$ |
108,507,147 |
|
|
Change in value of ordinary shares subject to possible
redemption |
|
$ |
(1,228,472 |
) |
|
Payment of offering costs by Sponsor in exchange for issuance of
Ordinary Shares |
|
$ |
25,000 |
|
|
Payment of offering costs through promissory note |
|
$ |
78,969 |
|
|
Issuance of Representative Shares |
|
$ |
1,137 |
|
The accompanying notes are an integral part of these financial
statements.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — DESCRIPTION OF
ORGANIZATION AND BUSINESS OPERATIONS
Americas Technology Acquisition Corp. (the “Company”) is a blank
check company incorporated as a Cayman Islands exempted company on
September 8, 2020. The Company was formed for the purpose of
effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one
or more businesses or entities (a “Business Combination”).
The Company is not limited to a particular industry or sector for
purposes of consummating a Business Combination. 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 December 31, 2020, the Company had not commenced any
operations. All activity for the period from September 8, 2020
(inception) through December 31, 2020 relates to the Company’s
formation and the initial public offering (“Initial Public
Offering”), which is described below. The Company will not generate
any operating revenues until after the completion of a Business
Combination, at the earliest. The Company will generate
non-operating income in the form of interest income from the
proceeds derived from the Initial Public Offering.
The registration statement for the Company’s Initial Public
Offering was declared effective on December 14, 2020. On December
17, 2020, the Company consummated the Initial Public Offering of
11,500,000 Units (the “Units” and, with respect to the ordinary
shares included in the Units sold, the “Public Shares”), which
includes the full exercise by the underwriter of its over-allotment
option in the amount of 1,500,000 Units, at $10.00 per Unit,
generating gross proceeds of $115,000,000 which is described in
Note 5.
Simultaneously with the closing of the Initial Public Offering, the
Company consummated the sale of 5,450,000 warrants (the “Private
Warrants”) at a price of $1.00 per Private Warrant in a private
placement to ATAC Limited Partnership, (the “Sponsor”) and
EarlyBirdCapital, Inc (“EarlyBirdCapital”), generating gross
proceeds of $5,450,000, which is described in Note 5.
Transaction costs amounted to $2,712,986, consisting of $2,300,000
in cash underwriting fees and $412,986 of other offering costs.
Following the closing of the Initial Public Offering on December
17, 2020, an amount of $116,150,000 ($10.10 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”), 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 185 days or less, or in any
open-ended investment company that holds itself out as a money
market fund investing solely in U.S. Treasuries and meeting certain
conditions under Rule 2a-7 of the Investment Company Act, as
determined by the Company, until the earliest of: (i) the
completion of a Business Combination and (ii) the distribution
of the funds in the Trust Account to the Company’s shareholders, as
described below.
The Company’s management has broad discretion with respect to the
specific application of the net proceeds of the Initial Public
Offering and the sale of the Private Warrants, although
substantially all of the net proceeds are intended to be applied
generally toward consummating a Business Combination. The stock
exchange listing rules require that the Business Combination must
be with one or more operating businesses or assets with a fair
market value equal to at least 80% of the assets held in the Trust
Account (less any deferred underwriting commissions and taxes
payable on the interest earned on the Trust Account). The Company
will only complete a Business Combination if the post-Business
Combination company owns or acquires 50% or more of the issued and
outstanding voting securities of the target or otherwise acquires a
controlling interest in the target business sufficient for it not
to be required to register as an investment company under the
Investment Company Act. There is no assurance that the Company will
be able to successfully effect a Business Combination.
The Company will provide the holders of the public shares (the
“Public Shareholders”) with the opportunity to redeem all or a
portion of their public shares upon the completion of the Business
Combination, either (i) in connection with a general meeting
called to approve the Business Combination or (ii) by means of
a tender offer. The decision as to whether the Company will seek
shareholder approval of a Business Combination or conduct a tender
offer will be made by the Company, solely in its discretion. The
Public Shareholders will be entitled to redeem their Public Shares,
equal to the aggregate amount then on deposit in the Trust Account,
calculated as of two business days prior to the consummation of the
Business Combination (currently and anticipated to be $10.10 per
Public Share), including interest (which interest shall be net of
taxes payable), divided by the number of then issued and
outstanding public shares, subject to certain limitations as
described in the prospectus. The per-share amount to be distributed
to the Public Shareholders who properly redeem their shares will
not be reduced by the deferred underwriting commissions the Company
will pay to the underwriters (as discussed in Note 6).
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The Company will proceed with a Business Combination only if the
Company has net tangible assets of at least $5,000,001 and, if the
Company seeks shareholder approval, it receives an ordinary
resolution under Cayman Islands law approving a Business
Combination, which requires the affirmative vote of a majority of
the shareholders who attend and vote at a general meeting of the
Company. If a shareholder vote is not required and the Company does
not decide to hold a shareholder vote for business or other legal
reasons, the Company will, pursuant to its Amended and Restated
Memorandum and Articles of Association, conduct the redemptions
pursuant to the tender offer rules of the Securities and Exchange
Commission (“SEC”), and file tender offer documents containing
substantially the same information as would be included in a proxy
statement with the SEC prior to completing a Business Combination.
If the Company seeks shareholder approval in connection with a
Business Combination, the holders of the Company’s shares prior to
the Initial Public Offering (the “Initial Shareholders”) have
agreed to vote its Founder Shares (as defined in Note 5),
Representative Shares (as defined in Note 7) and any Public Shares
purchased during or after the Initial Public Offering in favor of
approving a Business Combination. Additionally, each Public
Shareholder may elect to redeem their Public Shares, without
voting, and if they do vote, irrespective of whether they vote for
or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder
approval of the Business Combination and the Company does not
conduct redemptions pursuant to the tender offer rules, a Public
Shareholder, together with any affiliate of such shareholder or any
other person with whom such shareholder is acting in concert or as
a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be
restricted from redeeming its shares with respect to more than an
aggregate of 15% of the Public Shares without the Company’s prior
written consent.
The Initial Shareholders have agreed (a) to waive their
redemption rights with respect to any Founder Shares and Public
Shares held by them in connection with the completion of a Business
Combination and (b) not to propose an amendment to the Amended
and Restated Memorandum and Articles of Association (i) to
modify the substance or timing of the Company’s obligation to allow
redemption in connection with the Company’s initial Business
Combination or to redeem 100% of the Public Shares if the Company
does not complete a Business Combination within the Combination
Period (as defined below) or (ii) with respect to any other
provision relating to shareholders’ rights or pre-initial business
combination activity, unless the Company provides the Public
Shareholders with the opportunity to redeem their Public Shares
upon 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 (which interest shall be net of taxes
payable), divided by the number of then issued and outstanding
Public Shares.
The Company will have until December 17, 2021 to complete a
Business Combination. However, if the Company anticipates that it
may not be able to consummate a Business Combination by December
17, 2021, the Company may extend the period of time to consummate a
Business Combination up to two times, each by an additional three
months (until June 17, 2022 to complete a Business Combination (the
“Combination Period”)). In order to extend the time available for
the Company to consummate a Business Combination, the Sponsor or
its affiliate or designees must deposit into the Trust Account
$1,150,000 ($0.10 per Public Share), on or prior to the date of the
applicable deadline, for each three month extension.
If the Company has not completed 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 100% of 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 (less dissolution expenses and which
interest shall be net of taxes payable), divided by the number of
then issued and outstanding Public Shares, which redemption will
completely extinguish the rights of the Public Shareholders as
shareholders (including the right to receive further liquidating
distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the
Company’s remaining Public Shareholders and its Board of Directors,
liquidate and dissolve, subject in each case to the Company’s
obligations under Cayman Islands 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.
The Initial Shareholders have agreed to waive their rights to
liquidating distributions from the Trust Account with respect to
the Founder Shares if the Company fails to complete a Business
Combination within the Combination Period. However, if the Sponsor
or any of their respective affiliates acquire Public Shares, such
Public Shares will be entitled to liquidating distributions from
the Trust Account if the Company fails to complete a Business
Combination within the Combination Period. In the event of such
distribution, it is possible that the per share value of the assets
remaining available for distribution will be less than amount of
funds deposited into the Trust Account ($10.10 per share).
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
In order to protect the amounts held in the Trust Account, the
Sponsor has agreed that it will be liable to the Company if and to
the extent any claims by a third party (other than 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 (1) $10.10 per Public Share or (2) such
lesser amount per Public Share held in the Trust Account as of the
date of the liquidation of the Trust Account due to reductions in
the value of trust assets, in each case net of the interest which
may be withdrawn to pay taxes, except as to any claims by a third
party who executed a waiver of any and all rights to seek access to
the Trust Account and except as to any claims under the Company’s
indemnity of the underwriters of the Initial Public Offering
against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the “Securities Act”). 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 (other than 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.
Going Concern
In connection with the Company’s assessment of going concern
considerations in accordance with Financial Accounting Standard
Board’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 the mandatory liquidation
and subsequent dissolution, should the Company be unable to
complete a business combination, raises substantial doubt about the
Company’s ability to continue as a going concern. Management
believes that it has sufficient working capital outside of the
Trust Account and access to funds required to complete a Business
Combination prior to December 17, 2021 but there can be no
assurance that such a transaction will be completed. No adjustments
have been made to the carrying amounts of assets or liabilities
should the Company be required to liquidate after December 17,
2021.
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL
STATEMENTS
The Company previously accounted for its outstanding Private
Placement Warrants issued in connection with its Initial Public
Offering as components of equity instead of as derivative
liabilities. The warrant agreement governing the warrants
includes a provision that provides for potential changes to the
settlement amounts dependent upon the characteristics of the holder
of the warrant. In addition, the warrant agreement includes a
provision that in the event of a tender or exchange offer made to
and accepted by holders of more than 50% of the outstanding shares
of a single class of common shares, all holders of the warrants
would be entitled to receive cash for their warrants (the “tender
offer provision”).
On April 12, 2021, the SEC released a Staff Statement on Accounting
and Reporting Considerations for Warrants Issued by Special Purpose
Acquisition Companies (the “SEC Staff Statement”). Specifically,
the SEC Staff Statement focused on certain settlement terms and
provisions related to certain tender offers following a business
combination, which terms are similar to those contained in the
warrant agreement governing our warrants. Following the SEC Staff
Statement, the Company’s management further evaluated the warrants
under Accounting Standards Codification (“ASC”) Subtopic 815-40,
Contracts in Entity’s Own Equity. ASC Section 815-40-15
addresses equity versus liability treatment and classification of
equity-linked financial instruments, including warrants, and states
that a warrant may be classified as a component of equity only if,
among other things, the warrant is indexed to the issuer’s common
stock. Under ASC Section 815-40-15, a warrant is not indexed
to the issuer’s common stock if the terms of the warrant require an
adjustment to the exercise price upon a specified event and that
event is not an input to the fair value of the warrant. Based
on management’s evaluation, the Company’s audit committee, in
consultation with management, concluded that the Company’s Private
Placement Warrants are not indexed to the Company’s common shares
in the manner contemplated by ASC Section 815-40-15 because the
holder of the instrument is not an input into the pricing of a
fixed-for-fixed option on equity shares. In addition, based on
management’s evaluation, the Company’s audit committee, in
consultation with management concluded the tender offer provision
included in the warrant agreement fails the “classified in
shareholders’ equity” criteria as contemplated by ASC Section
815-40-25.
As a result of the above, the Company should have classified the
private warrants as derivative liabilities in its previously issued
financial statements. Under this accounting treatment, the Company
is required to measure the fair value of the warrants at the end of
each reporting period and recognize changes in the fair value from
the prior period in the Company’s operating results for the current
period.
The Company’s accounting for the private warrants as components of
equity instead of as derivative liabilities did not have any effect
on the Company’s previously reported operating expenses, cash flows
or cash.
Balance Sheet as of
December 17, 2020 |
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|
Warrant Liabilities |
|
$ |
— |
|
|
$ |
4,251,000 |
|
|
$ |
4,251,000 |
|
| Total
Liabilities |
|
|
8,336 |
|
|
|
4,251,000 |
|
|
|
4,259,336 |
|
|
Ordinary shares subject to redemption |
|
|
112,758,147 |
|
|
|
(4,251,000 |
) |
|
|
108,507,147 |
|
| Ordinary
Shares |
|
|
334 |
|
|
|
42 |
|
|
|
376 |
|
|
Additional paid-in capital |
|
$ |
5,004,670 |
|
|
$ |
15,336 |
|
|
$ |
5,020,006 |
|
|
Accumulated deficit |
|
|
(5,000 |
) |
|
|
(15,378 |
) |
|
|
(20,378 |
) |
| Total
Shareholders’ Equity |
|
$ |
5,000,004 |
|
|
$ |
- |
|
|
$ |
5,000,004 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Number
of shares subject to possible redemption |
|
|
11,164,173 |
|
|
|
(420,891 |
) |
|
|
10,743,282 |
|
Balance Sheet as of
December 31, 2020 |
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|
Warrant Liabilities |
|
$ |
— |
|
|
$ |
5,450,000 |
|
|
$ |
5,450,000 |
|
| Total
Liabilities |
|
|
8,292 |
|
|
|
5,450,000 |
|
|
|
5,458,292 |
|
|
Ordinary shares subject to redemption |
|
|
112,728,675 |
|
|
|
(5,450,000 |
) |
|
|
107,278,675 |
|
| Ordinary
Shares |
|
|
334 |
|
|
|
54 |
|
|
|
388 |
|
|
Additional paid-in capital |
|
$ |
5,034,142 |
|
|
$ |
1,214,324 |
|
|
$ |
6,248,466 |
|
|
Retained earnings (Accumulated deficit) |
|
$ |
(34,469 |
) |
|
$ |
(1,214,378 |
) |
|
$ |
(1,248,847 |
) |
| Total
Shareholders’ Equity |
|
$ |
5,000,007 |
|
|
$ |
- |
|
|
$ |
5,000,007 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Number
of shares subject to possible redemption |
|
|
11,161,255 |
|
|
|
(539,604 |
) |
|
|
10,621,651 |
|
Statement of Operations for the
period from September 8, 2020 (inception) to December 31, 2020 |
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|
Transaction costs allocable to warrant liabilities |
|
$ |
— |
|
|
$ |
(15,378 |
) |
|
$ |
(15,378 |
) |
| Change
in fair value of warrant liabilities |
|
$ |
— |
|
|
$ |
(1,199,000 |
) |
|
$ |
(1,199,000 |
) |
| Net
loss |
|
$ |
(34,469 |
) |
|
$ |
(1,214,378 |
) |
|
$ |
(1,248,847 |
) |
| Basic
and diluted net loss per ordinary share, non-redeemable |
|
$ |
(0.01 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.47 |
) |
Statement of Cash Flows for the
year ended December 31, 2020 |
|
As Reported |
|
|
Period
Adjustment |
|
|
As Restated |
|
|
Net income (loss) |
|
$ |
(34,469 |
) |
|
$ |
(1,214,378 |
) |
|
$ |
(1,248,847 |
) |
| Change
in fair value of warrant liabilities |
|
$ |
— |
|
|
$ |
1,199,000 |
|
|
$ |
1,199,000 |
|
|
Transaction costs allocable to warrant liabilities |
|
$ |
— |
|
|
$ |
15,378 |
|
|
$ |
15,378 |
|
|
Initial classification of ordinary shares subject to possible
redemption |
|
$ |
112,758,147 |
|
|
$ |
(4,251,000 |
) |
|
$ |
108,507,147 |
|
| Change
in value of ordinary shares subject to possible redemption |
|
$ |
(29,472 |
) |
|
$ |
(1,199,000 |
) |
|
$ |
(1,228,472 |
) |
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) and pursuant to the rules
and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section
2(a) of the Securities Act of 1933, as amended (the “Securities
Act”), as modified by the Jumpstart Our Business Startups Act of
2012 (the “JOBS Act”), and it may take advantage of certain
exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with
the 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 shareholder approval of any golden parachute
payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised
financial accounting standards until private companies (that is,
those that have not had a Securities Act registration statement
declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or
revised financial accounting standards. The JOBS Act provides that
a company can elect to opt out of the extended transition period
and comply with the requirements that apply to non-emerging growth
companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition
period which means that when a standard is issued or revised and it
has different application dates for public or private companies,
the Company, as an emerging growth company, can adopt the new or
revised standard at the time private companies adopt the new or
revised standard. This may make comparison of the Company’s
financial 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.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Use of Estimates
The preparation of the financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements.
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.
Offering Costs
Offering costs consist of underwriting, legal, accounting and other
expenses incurred through the Initial Public Offering that are
directly related to the Initial Public Offering. Offering costs
amounting to $2,712,986 were incurred, of which $2,697,608 were
charged to shareholders’ equity upon the completion of the Initial
Public Offering and $15,378 of the offering costs were immediately
expensed through the Statement of Operations in connection with the
warrant liability.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible
redemption in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from
Equity.” Ordinary Shares subject to mandatory redemption are
classified as a liability instrument and are measured at fair
value. Conditionally redeemable ordinary shares (including ordinary
shares that feature redemption rights that are either within the
control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within the Company’s control) are
classified as temporary equity. At all other times, ordinary shares
are classified as shareholders’ equity. The Company’s ordinary
shares feature certain redemption rights that are considered to be
outside of the Company’s control and subject to occurrence of
uncertain future events. Accordingly, at December 31, 2020,
ordinary shares subject to possible redemption are presented as
temporary equity, outside of the shareholders’ equity section of
the Company’s balance sheet.
Derivative Warrant Liabilites
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 ordinary shares and whether the warrant holders could
potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity
classification. This assessment, which requires the use of
professional judgment, is conducted at the time of warrant issuance
and as of each subsequent quarterly period end date while the
warrants are outstanding.
For issued or modified warrants that meet all of the criteria for
equity classification, the warrants are required to be recorded as
a component of additional paid-in capital at the time of issuance.
For issued or modified warrants that do not meet all the criteria
for equity classification, the warrants are required to be recorded
at their initial fair value on the date of issuance and each
balance sheet date thereafter. Changes in the estimated fair value
of the warrants are recognized as a non-cash gain or loss on the
statements of operations. The fair value of the private warrants
was estimated using a Binomial Lattice Model (see Note 10).
Income Taxes
ASC Topic 740 prescribes a recognition threshold and a measurement
attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For
those benefits to be recognized, a tax position must be more likely
than not to be sustained upon examination by taxing authorities.
The Company’s management determined that the Cayman Islands is the
Company’s major tax jurisdiction. The Company recognizes accrued
interest and penalties related to unrecognized tax benefits as
income tax expense. As of December 31, 2020, there were no
unrecognized tax benefits and no amounts accrued for interest and
penalties. 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 considered to be an exempted Cayman Islands company
with no connection to any other taxable jurisdiction and is
presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the United States. As such,
the Company’s tax provision was zero for the period presented.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Net Income (Loss) Per Ordinary Share
Net income (loss) per share is computed by dividing net income
(loss) by the weighted average number of ordinary shares
outstanding for the period. The calculation of diluted income
(loss) per share does not consider the effect of the warrants
issued in connection with the (i) Initial Public Offering, (ii) the
exercise of the over-allotment option and (iii) Private Warrants
since the exercise of the warrants is contingent upon the
occurrence of future events and the inclusion of such warrants
would be anti-dilutive. The warrants are exercisable to purchase
11,200,000 shares of ordinary shares in the aggregate.
The Company’s statement of operations includes a presentation of
income (loss) per share for ordinary share subject to possible
redemption in a manner similar to the two-class method of income
(loss) per share. Net income per share, basic and diluted, for
redeemable ordinary shares is calculated by dividing the interest
income earned on the Trust Account, by the weighted average number
of redeemable ordinary shares outstanding since original issuance.
Net loss per share, basic and diluted, for non-redeemable ordinary
shares is calculated by dividing the net loss, adjusted for income
attributable to redeemable ordinary shares, by the weighted average
number of non-redeemable ordinary shares outstanding for the
period. Non-redeemable ordinary shares include the Founder Shares
as these shares do not have any redemption features and do not
participate in the income earned on the Trust Account.
The following table reflects the calculation of basic and diluted
net income (loss) per ordinary share (in dollars, except per share
amounts):
| |
|
For the Period from
September 8, 2020
(inception) Through
December 31, 2020 |
|
| Redeemable
Ordinary Shares |
|
|
|
|
|
Numerator: Earnings allocable to Redeemable Ordinary Shares |
|
|
|
|
|
Interest Income |
|
$ |
1,909 |
|
|
Net Earnings |
|
$ |
1,909 |
|
|
Denominator: Weighted Average Redeemable Ordinary Shares |
|
|
|
|
|
Redeemable Ordinary Shares, Basic and Diluted |
|
|
11,500,000 |
|
|
Earnings/Basic and Diluted Redeemable Ordinary Shares |
|
$ |
— |
|
| |
|
|
|
|
| Non-Redeemable
Ordinary Shares |
|
|
|
|
|
Numerator: Net Income (Loss) minus Redeemable Net Earnings |
|
|
|
|
|
Net Income (Loss) |
|
$ |
(1,248,847
|
) |
|
Redeemable Net Earnings |
|
$ |
(1,909 |
) |
|
Non-Redeemable Net Loss |
|
$ |
(1,250,756
|
) |
|
Denominator: Weighted Average Non-Redeemable Ordinary Shares |
|
|
|
|
|
Non-Redeemable
Ordinary Shares, Basic and Diluted (1) |
|
|
2,670,330
|
|
|
Loss/Basic and Diluted Non-Redeemable Ordinary Shares |
|
$ |
(0.47
|
) |
As of December 31, 2020, basic and diluted shares are the same as
there are no non-redeemable securities that are dilutive to the
Company’s ordinary shareholders.
|
(1) |
The
weighted average non-redeemable ordinary shares for the year ended
December 31, 2020 includes the effect of 125,000 Representative
Shares which were issued in October 2020. |
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
Deposit Insurance Corporation coverage limits 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
Measurement,” approximates the carrying amounts represented in the
balance sheet, primarily due to their short-term nature.
Fair Value Measurements
Fair value is defined as the price that would be received for sale
of an asset or paid for transfer of a liability, in an orderly
transaction between market participants at the measurement date.
GAAP establishes a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3
measurements). These tiers include:
• Level 1, defined as observable inputs such as quoted prices
(unadjusted) for identical instruments in active markets;
• Level 2, defined as inputs other than quoted prices in active
markets that are either directly or indirectly observable such as
quoted prices for similar instruments in active markets or quoted
prices for identical or similar instruments in markets that are not
active; and
• Level 3, defined as unobservable inputs in which little or no
market data exists, therefore requiring an entity to develop its
own assumptions, such as valuations derived from valuation
techniques in which one or more significant inputs or significant
value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might
be categorized within different levels of the fair value hierarchy.
In those instances, the fair value measurement is categorized in
its entirety in the fair value hierarchy based on the lowest level
input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if
such instruments are derivatives or contain features that qualify
as embedded derivatives in accordance with ASC Topic 815,
“Derivatives and Hedging”. For derivative financial instruments
that are accounted for as liabilities, the derivative instrument is
initially recorded at its fair value on the grant date and is then
re-valued at each reporting date, with changes in the fair value
reported in the statements of operations. The classification of
derivative instruments, including whether such instruments should
be recorded as liabilities or as equity, is evaluated at the end of
each reporting period. Derivative liabilities are classified in the
balance sheet as current or non-current based on whether or not
net-cash settlement or conversion of the instrument could be
required within 12 months of the balance sheet date.
Recent Accounting Standards
In August 2020. The FASB issued Accounting Standards Update (“ASU”)
No. 2020-06, Debt –debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging – Contracts in
Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible
Instruments and Contracts in an Entity’ Own Equity (“ASU
2020-06”), which simplifies accounting for convertible
instruments by removing major separation models required under
current GAAP. The ASU also removes certain settlement conditions
that are required for equity-linked contracts to qualify for the
derivative scope exception, and it simplifies the diluted earnings
per share calculation in certain areas. The Company adopted ASU
2020-06 on January 1, 2021. Adoption of the ASU did not impact the
Company’s financial position, results of operations or cash
flows.
The Company’s management does not believe that any other recently
issued, but not yet effective, accounting standards if currently
adopted would have a material effect on the accompanying financial
statements.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 — INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold
11,500,000 Units, which includes a full exercise by the
underwriters of their over-allotment option in the amount of
1,500,000 Units, at a purchase price of $10.00 per Unit. Each Unit
consists of one ordinary share and one half of one redeemable
warrant (“Public Warrant”). Each Public Warrant entitles the holder
to purchase one ordinary share at an exercise price of $11.50 per
share (see Note 8).
NOTE 5 — PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the
Sponsor and EarlyBirdCapital purchased an aggregate of 5,450,000
Private Warrants, at a price of $1.00 per Private Warrant, for an
aggregate purchase price of $5,450,000, in a private placement.
Each Private Warrant is exercisable to purchase one ordinary share
at a price of $11.50 per share, subject to adjustment (see Note 8).
A portion of the proceeds from the Private Warrants were added to
the proceeds from the Initial Public Offering held in the Trust
Account. If the Company does not complete a Business Combination
within the Combination Period, the proceeds from the sale of the
Private 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 PARTIES
Founder Shares
In September 2020, the Sponsor paid $25,000 to cover certain
offering costs of the Company in consideration for 2,875,000 of the
Company’s ordinary shares (the “Founder Shares”). The Founder
Shares included an aggregate of up to 375,000 shares that were
subject to forfeiture depending on the extent to which the
underwriters’ over-allotment option was exercised, so that the
number of Founder Shares would equal, on an as-converted basis,
approximately 20% of the Company’s issued and outstanding ordinary
shares after the Initial Public Offering (assuming the Initial
Shareholders do not purchase any Public Shares in the Initial
Public Offering and excluding the Representative Shares). As a
result of the underwriters’ election to fully exercise their
over-allotment option, no Founder Shares are currently subject to
forfeiture.
The Sponsor has agreed, subject to certain limited exceptions, not
to transfer, assign or sell any of the Founder Shares until, with
respect to 50% of the Founder Shares, the earlier of one year after
the consummation of a Business Combination and the date on which
the closing price of the ordinary shares equals or exceeds $12.50
per share (as adjusted for share splits, share dividends,
reorganizations, recapitalizations and the like) for any 20 trading
days within a 30-trading day period commencing after a Business
Combination and, with respect to the remaining 50% of the Founder
Shares, until the one year after the consummation of a Business
Combination, or earlier, in either case, if, subsequent to a
Business Combination, the Company completes a liquidation, merger,
share exchange or other similar transaction which results in all of
the Company’s shareholders having the right to exchange their
ordinary shares for cash, securities or other property.
Promissory Note — Related Party
On September 29, 2020, the Company issued an unsecured
promissory note (the “Promissory Note”) to an affiliate of the
Sponsor, pursuant to which the Company was able to borrow up to an
aggregate principal amount of $300,000. The Promissory Note was
non-interest bearing and payable on the earlier of
(i) June 30, 2021 or (ii) the completion of the
Initial Public Offering. The outstanding balance under the
Promissory Note of $122,465 was repaid at the closing of the
Initial Public Offering on December 17, 2020.
Related Party 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”). Such Working Capital Loans would be evidenced by
promissory notes. The notes may be repaid upon completion of a
Business Combination, without interest, or, at the lender’s
discretion, up to $1,000,000 of notes may be converted upon
completion 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 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 December 31, 2020, the Company had no outstanding borrowings
under the Working Capital Loans.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Related Party Extension Loans
As discussed in Note 1, the Company may extend the period of time
to consummate a Business Combination up to two times, each by an
additional three months (until June 17, 2022 to complete a Business
Combination). In order to extend the time available for the Company
to consummate a Business Combination, the Sponsor or its affiliates
or designees must deposit into the Trust Account $1,150,000 ($0.10
per Public Share), on or prior to the date of the applicable
deadline, for each three month extension. Any such payments would
be made in the form of a non-interest bearing, unsecured promissory
note. Such notes would either be paid upon consummation of a
Business Combination, or, at the relevant insider’s discretion,
converted upon consummation of a Business Combination into
additional Private Warrants at a price of $1.00 per Private
Warrant. The Sponsor and its affiliates or designees are not
obligated to fund the Trust Account to extend the time for the
Company to complete a Business Combination.
Administrative Fees
We pay an affiliate of our sponsor and our Chief Executive Officer
approximately $7,000 per month for office space and advisory
services relating to our search for, and consummation of, an
initial Business Combination. We also pay Alberto Pontonio, one of
our directors, a fee of approximately $3,000 per month for certain
general and administrative services, including office space,
utilities and secretarial support, as we may require from time to
time. For the period from September 8, 2020 (inception) through
December 31, 2020, management fees paid to our CEO were $3,500 and
administrative fees paid to Alberto Pontonio were $1,500.
NOTE 7 — COMMITMENTS AND CONTINGENCIES
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, close
of the Initial Public Offering and/or search for a target company,
the specific impact is not readily determinable as of the date of
the financial statements. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
Registration Rights
Pursuant to a registration rights agreement entered into on
December 17, 2020, the holders of the Founder Shares,
Representative Shares, Private Warrants and underlying ordinary
shares and any securities issued upon conversion of Working Capital
Loans or extension loans will be entitled to registration rights.
The holders of a majority of these securities are entitled to make
up to two demands that the Company register such securities. The
holders of the majority of the Founder Shares can elect to exercise
these registration rights at any time commencing three months
prior to the date on which these ordinary shares are to be released
from escrow. The holders of a majority of the Representative
Shares, the Private Warrants (and underlying securities) and
securities issued in payment of Working Capital Loans (or
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 consummation of a Business Combination. The
Company will bear the expenses incurred in connection with the
filing of any such registration statements. Notwithstanding
anything herein to the contrary, EarlyBirdCapital and/or its
designees may only make a demand registration (i) on one
occasion and (ii) during the five year period beginning on the
effective date of the registration statement of which this
prospectus forms a part. The holders of the majority of the
Founders’ Shares can elect to exercise these registration rights at
any time commencing three months prior to the date on which
these shares are to be released from escrow. The holders of a
majority of the Private Warrants or warrants issued to the
Sponsor, officers, directors or their affiliates in payment of
Working Capital Loans or extension loans made to the Company (in
each case, including the 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 consummation of a
Business Combination. Notwithstanding anything herein to the
contrary, EarlyBirdCapital and/or its designees may participate in
a “piggy-back” registration only during the seven year period
beginning on the effective date of the registration statement,
which incorporates the prospectus.. The registration rights
agreement does not contain liquidating damages or other cash
settlement provisions resulting from delays in registering the
Company’s securities. The Company will bear the expenses incurred
in connection with the filing of any such registration
statements.
Underwriting Agreement
The Company granted the underwriters and the underwriters exercised
the option to purchase up to 1,500,000 additional Units to cover
over-allotments at the Initial Public Offering price, less the
underwriting discounts and commissions.
Upon the IPO, the underwriters were paid a cash underwriting
discount of $0.20 per Unit, or $2,300,000 in the aggregate.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Business Combination Marketing Agreement
The Company has engaged EarlyBirdCapital, the underwriter in the
Initial Public Offering, as an advisor in connection with its
Business Combination to assist in holding meetings with the Company
shareholders to discuss the potential Business Combination and the
target business’ attributes, introduce the Company to potential
investors that are interested in purchasing its securities in
connection with its initial Business Combination, assist in
obtaining shareholder approval for the Business Combination and
assist with 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 its initial
business combination in an amount equal to 3.5% of the gross
proceeds of the Initial Public Offering (exclusive of any
applicable finder’s fees which might become payable).
NOTE 8 — SHAREHOLDERS’ EQUITY
Preference shares — The Company is authorized to
issue 5,000,000 preference shares with a par value of $0.0001 per
share, with such designations, voting and other rights and
preferences as may be determined from time to time by the Company’s
board of directors. At December 31, 2020, there were no preference
shares issued or outstanding.
Ordinary shares — The Company is authorized to issue
500,000,000 ordinary shares, with a par value of $0.0001 per share.
Holders of the ordinary shares are entitled to one vote for each
share. At December 31, 2020, there were 3,338,745 ordinary shares
issued and outstanding, excluding 11,161,255 ordinary shares
subject to possible redemption.
Representative Shares
In October 2020, the Company issued to the designees of
EarlyBirdCapital 125,000 ordinary shares (the “Representative
Shares”). The Company accounted for the Representative Shares as an
offering cost of the Initial Public Offering, with a corresponding
credit to shareholders’ equity. The Company estimated the fair
value of Representative Shares to be $1,137 based upon the price of
the Founder Shares issued to the Initial Shareholders. The holders
of the Representative Shares have agreed not to transfer, assign or
sell any such shares until the completion of a Business
Combination. In addition, the holders 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 a 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 a Business
Combination within the Combination Period.
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 effective date of the
registration statement related to the Initial Public Offering
pursuant to Rule 5110(g)(1) of FINRA’s NASD Conduct Rules.
Pursuant to FINRA Rule 5110(g)(1), these securities will not
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 statements related
to the Initial Public Offering, nor may they be sold, transferred,
assigned, pledged or hypothecated for a period of 180 days
immediately following the effective date of the registration
statements related to the Initial Public Offering except to any
underwriter and selected dealer participating in the Initial Public
Offering and their bona fide officers or partners.
NOTE
9 — 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) the completion of a Business Combination and
(b) 12 months from the closing of the Initial Public
Offering. The Public Warrants will expire five years from the
completion of a Business Combination or earlier upon redemption or
liquidation.
No Public Warrants will be exercisable for cash unless the Company
has an effective and current registration statement covering the
issuance of the ordinary shares issuable upon exercise of the
warrants and a current prospectus relating to such ordinary shares.
Notwithstanding the foregoing, if a registration statement covering
the issuance of the ordinary shares issuable upon exercise of the
Public Warrants is not effective within 90 days from the
closing 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 an available exemption from registration under the
Securities Act. If an exemption from registration 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.
The Company may redeem the Public Warrants:
|
· |
in
whole and not in part; |
|
· |
at a
price of $0.01 per warrant; |
|
· |
at
any time while the warrants become exercisable; |
|
· |
upon
not less than 30 days’ prior written notice of redemption to
each warrant holder; |
|
· |
if,
and only if, the reported last sale price of the Company’s ordinary
shares equals or exceeds $18.00 per share (subject to adjustment)
for any 20 trading days within a 30-trading day period commencing
after the warrants become exercisable and ending on the third
trading 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 issuance of the ordinary shares underlying such
warrants at the time of redemption and for the entire 30-day
trading period referred to above and continuing each day thereafter
until the date of redemption. |
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.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
The exercise price and number of ordinary shares issuable upon
exercise of the warrants may be adjusted in certain circumstances
including in the event of a share dividend, extraordinary dividend
or recapitalization, reorganization, merger or consolidation.
However, the warrants will not be adjusted for issuance of ordinary
shares at a price below its exercise price. The Company has agreed
to use its best efforts to have declared effective a prospectus
relating to the ordinary shares issuable upon exercise of the
warrants and keep such prospectus current until the expiration of
the warrants. However, if the Company does not maintain a current
prospectus relating to the ordinary shares issuable upon exercise
of the warrants, holders will be unable to exercise their warrants
for cash and the Company will not be required to net cash settle or
cash settle the warrant exercise. There will be no redemption
rights upon the completion of a Business Combination with respect
to the Company’s 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.
In addition, if (x) the Company issues additional ordinary
shares or equity-linked securities for capital raising purposes in
connection with the closing of a Business Combination at an issue
price or effective issue price of less than $9.20 per ordinary
share (with such issue price or effective issue price to be
determined in good faith by the Company’s board of directors and,
in the case of any such issuance to the Sponsor or its affiliates,
without taking into account any Founder Shares held by the Sponsor
or such affiliates, as applicable, 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 a Business Combination on the date of
the consummation of a Business Combination (net of redemptions),
and (z) the volume weighted average trading price of its
ordinary shares during the 20 trading day period starting on the
trading day prior to the day on which the Company consummates its
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) such that the effective exercise
price per full share will be equal to 115% of the greater of
(i) the Market Value or (ii) the price at which the
Company issue additional ordinary shares or equity-linked
securities.
The Private Warrants are identical to the Public Warrants
underlying the Units sold in the Initial Public Offering, except
that the Private Warrants will be exercisable for cash (even if a
registration statement covering the issuance of the ordinary shares
issuable upon exercise of such warrants is not effective) or on a
cashless basis, at the holder’s option and will not be redeemable
by the Company, in each case so long as they are held by the
initial purchasers or their affiliates.
AMERICAS TECHNOLOGY ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
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. |
The Company classifies its U.S. Treasury and equivalent securities
as held-to-maturity in accordance with ASC Topic 320 “Investments -
Debt and Equity Securities.” Held-to-maturity securities are those
securities which the Company has the ability and intent to hold
until maturity. Held-to-maturity treasury securities are recorded
at amortized cost on the accompanying balance sheet and adjusted
for the amortization or accretion of premiums or discounts.
At December 31, 2020, assets held in the Trust Account were
comprised of $611 in cash and $116,151,298 in U.S. Treasury
securities. During the period from September 8, 2020 (inception)
through December 31, 2020, the Company did not withdraw any
interest income from the Trust Account.
The following table presents information about the Company’s assets
and liabilities that are measured at fair value on a recurring
basis at December 31, 2020 and indicates the fair value
hierarchy of the valuation inputs the Company utilized to determine
such fair value. The gross holding gains and fair value of
held-to-maturity securities at December 31, 2020 are as
follows:
|
Assets: |
|
Held-To-Maturity |
|
Level |
|
Amortized
Cost |
|
|
Gross
Holding
Gain |
|
|
Fair Value |
|
|
December 31, 2020 |
|
U.S. Treasury Securities (Matured on 3/18/2021)1 |
|
1 |
|
$ |
116,151,298 |
|
|
$ |
(1,562 |
) |
|
$ |
116,149,737 |
|
| (1) |
The
U.S Treasury Securities within the Trust Account were reinvested in
U.S Treasury Securities that matured on June 17, 2021 and then
subsequently reinvested into a Treasury Only Money Market
Fund. |
|
Liabilities: |
|
Warrant Liabilities |
|
Level |
|
|
December 31,
2020 |
|
|
|
|
Private Placement Warrants |
|
|
3 |
|
|
$ |
5,450,000 |
|
The Warrants were accounted for as liabilities in accordance with
ASC 815-40 and are presented within derivative warrant liabilities
on the balance sheet. The warrant liabilities are measured at fair
value at inception and on a recurring basis, with changes in fair
value presented within change in fair value of warrant liabilities
in the consolidated statement of operations.
Initial Measurement
The Company established the initial fair value for the private
warrants on December 17, 2020, the date of the Company’s Initial
Public Offering, using a Binomial Lattice Model. The Warrants were
classified as Level 3 at the initial measurement date due to the
use of unobservable inputs.
The key inputs into the Binomial Lattice Model for the Private
Placement Warrants were as follows at initial measurement:
|
Input |
|
December 17,
2020 (Initial
Measurement) |
|
|
December 31,
2020 |
|
|
Risk-free interest rate |
|
|
0.43 |
% |
|
|
0.41 |
% |
|
Dividend yield |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
Implied volatility |
|
|
15.10 |
% |
|
|
17.00 |
% |
| Exercise
price |
|
$ |
11.50 |
|
|
$ |
11.50 |
|
| Market Stock
Price |
|
$ |
9.61 |
|
|
$ |
9.78 |
|
On December 17, 2020, the Private Placement Warrants were
determined to be $0.78 per warrant for an aggregate value of $4.3
million.
Subsequent Measurement
The Warrants are measured at fair value on a recurring basis. The
subsequent measurement of the private warrants are performed using
the Binomial Lattice Model.
As of December 31, 2020, the aggregate value of the Private
Placement Warrants was approximately $5.5 million.
The following table presents the changes in the fair value of
warrant liabilities:
| |
|
Private
Placement
Warrants |
|
| Fair value as
of September 8, 2020 (inception) |
|
$ |
— |
|
|
Initial measurement on December 17, 2020 (IPO) |
|
|
4,251,000 |
|
|
Change in valuation inputs or other assumptions |
|
|
1,199,000 |
|
|
Fair value as of December 31, 2020 |
|
$ |
5,450,000 |
|
Transfers to or from levels 1, 2 and 3 are recognized at the end of
the reporting period. There were no transfers between levels for
the period ending December 31, 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
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 financial
statement.
EXHIBIT INDEX
|
Exhibit
No. |
|
Description |
| 1.1 |
|
Underwriting
Agreement, dated December 14, 2020, by and between the Company and
EarlyBirdCapital, Inc. (1) |
| 3.1 |
|
Amended
and Restated Memorandum and Articles of Association.
(1) |
| 4.1 |
|
Specimen
Unit Certificate (2) |
| 4.2 |
|
Specimen
Ordinary Share Certificate (2) |
| 4.3 |
|
Specimen
Warrant Certificate (2) |
| 4.4 |
|
Warrant
Agreement, dated December 14, 2020, by and between the Company and
Continental Stock Transfer & Trust Company, as warrant agent.
(1) |
| 4.5 |
|
Description
of Registered Securities* |
| 10.1 |
|
Promissory
Note, dated September 29, 2020, issued to ATA Limited Partnership
(3) |
| 10.2 |
|
Letter
Agreement, dated December 14, by and among the Company, its
officers, its directors and the Sponsor. (1) |
| 10.3 |
|
Investment
Management Trust Agreement, dated December 14, 2020, by and between
the Company and Continental Stock Transfer & Trust Company, as
trustee. (1) |
| 10.4 |
|
Registration
Rights Agreement, dated December 14, 2020, by and among the
Company, the Sponsor and the investors party thereto.
(1) |
| 10.5 |
|
A
Warrant Subscription Agreement, dated December 14, 2020 by and
between the Company and ATAC Limited Partnership.
(1) |
| 10.6 |
|
A
Warrant Subscription Agreement, dated December 14, 2020 by and
between the Company and EarlyBirdCapital, Inc. (1) |
| 10.7 |
|
A
Business Combination Marketing Agreement, dated December 14, 2020
by and between the Company and EarlyBirdCapital, Inc.
(1) |
| 10.8 |
|
Stock
Escrow Agreement, date December 14, 2020 by and between the
Company, the Sponsor and Continental Stock Transfer & Trust
Company.(1) |
| 10.9 |
|
Advisory
Agreement, dated December 14, 2020, by and between the Company and
Fifth Partners, LLC. (1) |
| 10.10 |
|
Form
of Indemnity Agreement (2) |
| 14.1 |
|
Form
of Code of Ethics. (2) |
|
31.1 |
|
Certification of the Principal Executive Officer required by Rule
13a-14(a) or Rule 15d-14(a).* |
|
31.2 |
|
Certification of the Principal Financial Officer required by Rule
13a-14(a) or Rule 15d-14(a).* |
|
32.1 |
|
Certification of the Principal Executive Officer required by Rule
13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350** |
|
32.2 |
|
Certification of the Principal Financial Officer required by Rule
13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350** |
| ** |
Furnished herewith
|
| |
|
|
|
|
(1) |
Incorporated by reference to the Company’s Form 8-K, filed with
the SEC on December 18, 2020. |
| |
|
(2) |
Incorporated by reference to the Company’s S-1/A, filed on
December 10, 2020. |
| |
|
(3) |
Incorporated by reference to the Company’s S-1, filed on
November 20, 2020. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
July 1, 2021
|
Americas
Technology Acquisition Corp. |
| |
|
|
| |
By: |
/s/ Jorge Marcos
|
| |
Name: |
Jorge Marcos |
| |
Title: |
Chief Executive Officer
(Principal Executive Officer) |
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
|
Name |
|
Position |
|
Date |
| |
|
|
|
/s/ Jorge Marcos
|
|
Chief
Executive Officer |
|
July 1, 2021
|
|
Jorge
Marcos |
|
(Principal
Executive Officer) |
|
|
| |
|
|
|
/s/ Juan Pablo Visoso
|
|
Chief
Financial Officer |
|
July 1, 2021
|
|
Juan
Pablo Visoso |
|
(Principal
Financial and Accounting Officer) |
|
|
| |
|
|
|
/s/ Lisa Harris
|
|
Chairman |
|
July 1, 2021
|
|
Lisa
Harris |
|
|
|
|
| |
|
|
|
/s/ Alberto Pontonio
|
|
Director |
|
July 1, 2021
|
|
Alberto
Pontonio |
|
|
|
|
| |
|
|
|
/s/ Maurizio Angelone
|
|
Director |
|
July 1, 2021
|
|
Maurizio
Angelone |
|
|
|
|
| |
|
|
|
/s/ Royce Wilson
|
|
Director |
|
July 1, 2021
|
|
Royce
Wilson |
|
|
|
|
|
|
|
|
|
|
|
/s/ Antonio Garza
|
|
Director |
|
July 1, 2021
|
|
Antonio
Garza |
|
|
|
| |
|
|
|
|
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