You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed financial statements and related notes included in Part I, Item 1 of this report. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled "Risk factors."
Unless the context otherwise requires, we use the terms "5:01," "company," "we,"
"us" and "our" in this report to refer to
Overview
We are a blank check company incorporated in
Our sponsor is 5:01
Concurrently with the closing of our IPO, we consummated the private placement,
or the private placement, of 360,000 shares of Class A common stock, or each, a
private placement share and, collectively, the private placement shares, at a
price of
Upon the closing of the IPO, the Over-Allotment and the private
placement, approximately
We will provide the holders of our outstanding public shares, or the public stockholders, with the opportunity to redeem all or a portion of their public shares upon the completion of a business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer.
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If we are unable to complete a business combination within 24 months from the
closing of the IPO, or
The issuance of additional shares in our business combination:
• may significantly dilute the equity interest of our stockholders, which
dilution would increase if the anti-dilution provisions in the shares of Class B common stock resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the shares of Class B common stock;
• may subordinate the rights of holders of shares of Class A common stock if
shares of preferred stock are issued with rights senior to those afforded our shares of Class A common stock;
• could cause a change in control if a substantial number of our shares of
Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
• may have the effect of delaying or preventing a change of control of us by
diluting the share ownership or voting rights of a person seeking to obtain control of us; and
• may adversely affect prevailing market prices for our Class A common stock.
Similarly, if we issue debt securities, it could result in:
• default and foreclosure on our assets if our operating revenues after a
business combination are insufficient to pay our debt obligations;
• acceleration of our obligations to repay the indebtedness even if we have made
all principal and interest payments when due if the debt security contains covenants that require the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant;
• our immediate payment of all principal and accrued interest, if any, if the
debt security is payable on demand; and
• our inability to obtain additional financing, if necessary, if the debt
security contains covenants restricting our ability to obtain additional
financing while such security is outstanding.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. Our plans to raise capital or to consummate our initial business combination may not be successful.
Liquidity and Capital Resources
As of
Prior to
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Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity since inception up to
For the period from
Contractual Obligations Registration Rights
The holders of founder shares and private placement shares are entitled to registration rights pursuant to a registration and stockholder rights agreement. The holders of these securities are entitled to make up to three demands that we register such securities, subject to specified conditions. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the consummation of the business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. However, the registration and stockholder rights agreement will provide that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period.
Underwriting Agreement
The underwriter was entitled to an underwriting discount of
In connection with the consummation of the Over-Allotment on
Director Compensation
Upon closing of the IPO, we agreed to pay our non-employee directors
16 Critical Accounting Policies
Deferred Offering Costs Associated with the IPO
Deferred offering costs consisted of legal, accounting, underwriting fees and
other costs incurred through the balance sheet date that were directly related
to the IPO and that were charged to stockholders' equity upon the completion of
the IPO in
Net Loss Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." Net loss per share is computed by dividing net loss by the
weighted average number of shares of common stock outstanding during the period,
excluding common stock subject to forfeiture. Weighted average shares at
Off-Balance Sheet Arrangements
As of
JOBS Act
The Jumpstart Our Business Startups Act of 2012 , or the JOBS Act, contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.
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