References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to
"management" or our "management team" refer to our officers and directors,
references to the "Sponsor" refer to
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the condensed consolidated
financial statements and the notes thereto contained elsewhere in this Quarterly
Report. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act")
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") that are not historical facts, and involve risks and
uncertainties that could cause actual results to differ materially from those
expected and projected. All statements, other than statements of historical fact
included in this Form 10-Q including, without limitation, statements in this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the Company's financial position, business strategy and
the plans and objectives of management for future operations, are
forward-looking statements. Words such as "expect," "believe," "anticipate,"
"intend," "estimate," "seek" and variations and similar words and expressions
are intended to identify such forward-looking statements. Such forward-looking
statements relate to future events or future performance, but reflect
management's current beliefs, based on information currently available. A number
of factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in the
forward-looking statements. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the
forward-looking statements, please refer to the Risk Factors section of the
Company's Annual Report on Form 10-KA filed with the
Exchange Commission
accessed on the EDGAR section of the
expressly required by applicable securities law, the Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
Overview
We are a blank check company formed under the laws of the
asset acquisition, stock purchase, reorganization or other similar Business
Combination with one or more businesses. We intend to effectuate our Business
Combination using cash from the proceeds of the Initial Public Offering and the
sale of the Private Placement Warrants, our capital stock, debt or a combination
of cash, stock 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.
Recent Developments
On
Sub and
The Business Combination Agreement and the transactions contemplated thereby
were approved by the board of directors of each of CPSR and
The Business Combination Agreement provides for, among other things, that Merger
Sub will merge with and into
the merger and, after giving effect to such merger,
wholly-owned subsidiary (the "Merger"). In addition, we will be renamed
Holdings, Inc.
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In accordance with the terms and subject to the conditions of the Business
Combination Agreement, at the Effective Time, (i) each share of
outstanding as of immediately prior to the Effective Time will be exchanged for
CPSR Shares based on an implied
vested and unvested stock options of
thereafter be settled or exercisable for CPSR Shares, as applicable, determined
based on the same implied
each warrant of
our shares of determined based on the same implied
described in clause (i); and (iv) each share of CPSR Class A common stock and
each share of CPSR Class B common stock that is issued and outstanding
immediately prior to the Effective Time shall become one CPSR Share following
the consummation of the Business Combination. In addition, each holder of shares
of
of 23,483,250 restricted earn out CPSR Shares, which will vest (in part) in
equal thirds if the trading price of CPSR Shares is greater than or equal to
30-trading day period on or prior to the date that is five years following the
Effective Time (the "Earn Out Period") and will also vest in connection with any
Change of Control Transaction with respect to us if the applicable thresholds
are met in such Change of Control Transaction during the Earn Out Period.
The Business Combination is expected to close in the fourth quarter of 2021,
following the receipt of the required approval by our stockholders and the
fulfillment of other customary closing conditions.
Results of Operations
We have neither engaged in any operations (other than searching for a Business
Combination after our Initial Public Offering) nor generated any revenues to
date. Our only activities through
activities, those necessary to prepare for the Initial Public Offering,
described below, finding a target company for a Business Combination and
activities in connection with the proposed acquisition of
expect to generate any operating revenues until after the completion of our
Business Combination. We generate non-operating income in the form of interest
income on marketable securities held in the Trust Account. We incur expenses as
a result of being a public company (for legal, financial reporting, accounting
and auditing compliance), as well as for due diligence expenses.
For the three months ended
which consists of changes in fair value of warrant liabilities of
operating costs of
held in Trust Account of
securities held in the Trust Account of
For the nine months ended
which consists of changes in fair value of warrant liabilities of
operating costs of
securities held in Trust Account of
securities held in the Trust Account of
For the three months ended
which consists of operating costs of
the Initial Public Offering of
Account of
Account of
For the period from
had a net loss of
earned on marketable securities held in Trust Account of
gain on marketable securities held in Trust Account of
fair value of warrant liabilities of
Liquidity and Capital Resources
On
at a price of
underwriters of the over-allotment option to purchase an additional 3,600,000,
generating gross proceeds of
the Initial Public Offering, we consummated the sale of 7,520,000 Private
Placement Warrants at a price of
private placement to our stockholders, generating gross proceeds of
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Following the Initial Public Offering, the full exercise of the over-allotment
option by the underwriters' and the sale of the Private Placement Warrants, a
total of
cash held outside of the Trust Account, after payment of costs related to the
Initial Public Offering, and available for working capital purposes. We incurred
For the nine months ended
was
warrant liabilities of
held in Trust Account of
in the Trust Account of
liabilities, which provided
For the period from
cash used in operating activities was
affected by changes in fair value of warrant liabilities of
unrealized gain on marketable securities held in Trust Account of
interest earned on marketable securities held in the Trust Account of
and changes in operating assets and liabilities, which used
operating activities.
As of
Trust Account of
held in the Trust Account, including any amounts representing interest earned on
the Trust Account to complete our Business Combination. We may withdraw interest
to pay franchise and income taxes. During the period ended
we have withdrawn
payment of franchise taxes. To the extent that our capital stock or debt is
used, in whole or in part, as consideration to complete our Business
Combination, the remaining proceeds held in the Trust Account will be used as
working capital to finance the operations of the target business or businesses,
make other acquisitions and pursue our growth strategies.
As of
Trust Account. We intend to use the funds held outside the Trust Account
primarily to identify and evaluate target businesses, perform business due
diligence on prospective target businesses, travel to and from the offices,
plants or similar locations of prospective target businesses or their
representatives or owners, review corporate documents and material agreements of
prospective target businesses, and structure, negotiate and complete a Business
Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the Sponsor, an affiliate of the
Sponsor, or our officers and directors may, but are not obligated to, loan us
funds as may be required. If we complete a Business Combination, we would repay
such loaned amounts. In the event that a Business Combination does not close, we
may use a portion of the working capital held outside the trust account to repay
such loaned amounts but no proceeds from our Trust Account would be used for
such repayment. Up to
at a price of
be identical to the Private Placement Warrants, including as to exercise price,
exercisability and exercise period. The terms of such loans by our officers and
directors, if any, have not been determined and no written agreements exist with
respect to such loans. The loans would be repaid upon consummation of a Business
Combination, without interest.
On
non-interest bearing, unsecured and will be repaid upon the consummation of a
business combination. If the Company does not consummate a business combination,
all amounts loaned to the Company in connection with these loans will be
forgiven except to the extent that the Company has funds available to it outside
of its Trust Account. As a result, management has determined that sufficient
capital exists to sustain operations through the earlier of the consummation of
a Business Combination or
Company if a Business Combination is not completed.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
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.
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Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay an
affiliate of the Sponsor a monthly fee of
and secretarial and administrative support to the Company. We began incurring
these fees on
the earlier of the completion of the Business Combination and the Company's
liquidation.
The underwriters are entitled to a deferred fee of
in the aggregate. The deferred fee will be waived by the underwriters in the
event that the Company does not complete a Business Combination, subject to the
terms of the underwriting agreement.
Critical Accounting Policies
The preparation of condensed consolidated financial statements and related
disclosures in conformity with accounting principles generally accepted in
United States of America
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the condensed consolidated
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 Liabilities
We account for the Warrants in accordance with the guidance contained in ASC
815-40-15-7D and 7F under which the Warrants do not meet the criteria for equity
treatment and must be recorded as liabilities. Accordingly, we classify the
Warrants as liabilities at their fair value and adjust the Warrants to fair
value at each reporting period. This liability is subject to re-measurement at
each balance sheet date until exercised, and any change in fair value is
recognized in our statements of operations. The Private Placement Warrants and
the Public Warrants for periods where no observable traded price was available
are valued using a Monte Carlo simulation. For periods subsequent to the
detachment of the Public Warrants from the Units, the Public Warrant quoted
market price was used as the fair value as of each relevant date.
Class A Common Stock Subject to Possible Redemption
We account for our shares of Class A common stock subject to possible redemption
in accordance with the guidance in Accounting Standards Codification ("ASC")
Topic 480 "Distinguishing Liabilities from Equity." Shares of Class A common
stock subject to mandatory redemption is classified as a liability instrument
and is measured at fair value. Conditionally redeemable common stock (including
common stock that features redemption rights that are either within the control
of the holder or subject to redemption upon the occurrence of uncertain events
not solely within our control) is classified as temporary equity. At all other
times, common stock is classified as stockholders' equity. Our common stock
features certain redemption rights that are considered to be outside of our
control and subject to occurrence of uncertain future events. Accordingly, the
Class A common stock subject to possible redemption is presented as temporary
equity, outside of the stockholders' equity section of our unaudited condensed
consolidated balance sheets.
Net Income (Loss) per Common Share
Net income (loss) per common share is computed by dividing net income (loss) by
the weighted average number of common stock outstanding during the period. We
apply the two-class method in calculating income (loss) per common share.
Accretion associated with the redeemable shares of Class A common stock is
excluded from income (loss) per common share as the redemption value
approximates fair value.
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Recent accounting standards
In
Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in
Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies
accounting for convertible instruments by removing major separation models
required under current GAAP. ASU 2020-06 removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope
exception and it also simplifies the diluted earnings per share calculation in
certain areas. ASU 2020-06 is effective for fiscal years beginning after
early adoption permitted. We adopted ASU 2020-06 on
adoption of ASU 2020-06 did not have an impact on our condensed consolidated
financial statements.
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 unaudited condensed consolidated financial statements.
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