QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
|||||
Emerging growth company |
Page |
||||
3 | ||||
3 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
23 | ||||
27 | ||||
27 | ||||
28 | ||||
28 | ||||
28 | ||||
28 | ||||
29 | ||||
29 | ||||
29 | ||||
29 | ||||
31 |
September 30, 2021 |
December 31, 2020 |
|||||||
Unaudited |
||||||||
Assets |
||||||||
Cash |
$ | $ | — | |||||
Prepaid expenses |
— | |||||||
Due from related party |
— | |||||||
|
|
|
|
|||||
Total current assets |
— | |||||||
Deferred offering costs |
— | |||||||
Cash and securities held in Trust Account |
— | |||||||
|
|
|
|
|||||
Total Assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Stockholders’ (Deficit) Equity: |
||||||||
Current liabilities: |
||||||||
Accrued offering costs |
$ | $ | |
|||||
Accrued expenses |
— | |||||||
Promissory note—related party |
— | |||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Warrant liability |
— | |||||||
|
|
|
|
|||||
Total liabilities |
||||||||
Commitments and Contingencies (Note 7) |
||||||||
Common stock subject to possible redemption, |
— | |||||||
Stockholders’ (Deficit) Equity: |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Stockholders’ (deficit) equity |
( |
) | ||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ (Deficit) Equity |
$ | $ | ||||||
|
|
|
|
For the three months ended September 30, 2021 |
For the nine months ended September 30, 2021 |
|||||||
Operating expenses: |
||||||||
General and administrative costs |
$ | $ | ||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Other income (expense) |
||||||||
Interest income |
||||||||
Warrant issuance costs |
( |
) | ||||||
Change in fair value of warrants |
||||||||
|
|
|
|
|||||
Total other income |
||||||||
|
|
|
|
|||||
Net income |
$ |
$ |
||||||
|
|
|
|
|||||
Basic and diluted weighted average Common Stock subject to redemption |
||||||||
|
|
|
|
|||||
Basic and diluted net income |
$ |
$ |
||||||
|
|
|
|
|||||
Basic and diluted weighted average Common Stock |
||||||||
|
|
|
|
|||||
Basic and diluted net income per Common Stock |
$ |
$ |
||||||
|
|
|
|
Common Stock |
||||||||||||||||||||
Shares |
Amount |
Additional |
Total Stockholders’ |
|||||||||||||||||
|
|
Paid-in Capital |
Accumulated Deficit |
(Deficit) Equity |
||||||||||||||||
Balance as of January 1, 2021 |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Sale of |
— | — | — | |||||||||||||||||
Issuance of representative shares |
— | |||||||||||||||||||
Issuance of representative warrants |
— | — | — | |||||||||||||||||
Subsequent remeasurement under ASC 480-10-S99 , restat ed |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||
Net Income |
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of March 31, 2021 , re stated |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of June 30, 2021 , restated |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||
Net income |
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of September 30, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
||||
Net Income |
$ | |||
Adjustments to reconcile net income to net cash used in operating activities: |
||||
Operating expenses paid by sponsor |
||||
Interest earned on treasury securities held in Trust Account |
( |
|||
Warrant issuance costs |
||||
Change in fair value of warrants |
( |
|||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
|||
Accrued expenses |
||||
|
|
|||
Net cash used in operating activities |
( |
|||
Cash Flows from Investing Activities: |
||||
Investment held in Trust Account |
( |
|||
|
|
|||
Net cash used in investing activities |
( |
|||
Cash Flows from Financing Activities: |
||||
Proceeds from initial public offering, net of underwriting discounts paid |
||||
Proceeds from private placement |
||||
Repayment of promissory note to related party |
( |
|||
Payments of offering costs |
( |
|||
|
|
|||
Net cash provided by financing activities |
||||
Net Change in Cash |
||||
Cash – Beginning |
||||
|
|
|||
Cash – Ending |
$ | |||
|
|
|||
Supplemental Disclosure of Non-cash Financing Activities: |
||||
Fair value of representative shares |
$ | |||
|
|
|||
Fair value of representative warrants |
$ | |||
|
|
|||
Offering costs paid by Sponsor under promissory note |
$ | |||
|
|
Balance Sheet as of March 1, 2021 as adjusted for exercise of over- allotment (restated on Form 10-Q on June 8, 2021) |
As Previously Reported |
Restatement Adjustment |
As Restated |
|||||||||
Common stock, $0.0001 par value; shares subject to possible redemption |
$ | $ | $ | |||||||||
Stockholders’ equity (deficit) c ommon stock - $0.0001 par value |
( |
) | ||||||||||
Additional paid-in-capital |
( |
) | ||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
Total stockholders’ equity (deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
Number of shares subject to redemption |
||||||||||||
|
|
|
|
|
|
Balance Sheet as of March 31, 2021 (filed on June 8, 2021) |
As Previously Reported |
Restatement Adjustment |
As Restated |
|||||||||
Common stock, $0.0001 par value; shares subject to possible redemption |
$ | $ | $ | |||||||||
Stockholders’ equity (deficit) c ommon stock - $0.0001 par value |
( |
) | ||||||||||
Additional paid-in-capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ||||||||
Total stockholders’ equity (deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
Number of shares subject to redemption |
||||||||||||
|
|
|
|
|
|
Unaudited Statements of Operations for the three months ended March 31, 2021 as adjusted for Temporary Equity related to Public Shares |
As Reported |
Restatement Adjustment |
As Restated |
|||||||||
Basic and diluted weighted average shares outstanding, common stock subject to redemption |
( |
) | ||||||||||
Basic and diluted weighted average shares outstanding, common stock not subject to redemption |
( |
) | ||||||||||
EPS - Redeemable c ommon Stock |
$ | $ | $ | |||||||||
EPS - Non-Redeemable c ommon Stock |
$ | $ | ( |
) | $ |
Statement of Changes in Stockholders’ (Deficit) Equity for the three months ended March 31, 2021 |
As Reported |
Restatement Adjustment |
As Restated |
|||||||||
Sale of 20,700,000 Units through public offering and over-allotment, net of fair value of warrant liability |
$ |
$ |
( |
) |
$ |
|||||||
Offering costs |
( |
) |
||||||||||
Common stock subject to possible redemption |
( |
) |
||||||||||
Reclassification of deficit additional paid-in capital to retained earnings and subsequent remeasurement under ASC 480-10-S99 paid-in |
( |
) |
( |
) | ||||||||
Subsequent remeasurement under ASC 480-10-S99 against accumulated deficit |
$ |
$ |
( |
) |
$ |
( |
) |
Balance Sheet as of June 30, 2021 (filed on August 24, 2021) |
As P Reported |
Restatement Adjustment |
As R | |||||||||
Common stock, $0.0001 par value; shares subject to possible redemption |
$ | $ | $ | |||||||||
Stockholders’ equity (deficit) |
||||||||||||
Common stock - $0.0001 par value |
( |
) | ||||||||||
Additional paid-in-capital |
( |
) | ||||||||||
Accumulated deficit |
( |
) | ( |
) | ||||||||
Total stockholders’ equity (deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
Number of shares subject to redemption |
||||||||||||
|
|
|
|
|
|
Unaudited Statements of Operations for the three and six months ended June 30, 2021 as adjusted for Temporary Equity related to Public Shares |
As Reported |
Restatement Adjustment |
As Restated |
|||||||||
Three months |
||||||||||||
Basic and diluted weighted average shares outstanding, common stock subject to redemption |
||||||||||||
Basic and diluted weighted average shares outstanding, common stock not subject to redemption |
( |
) | ||||||||||
EPS - Redeemable c ommon Stock |
$ | $ | ( |
) | $ | ( |
) | |||||
EPS - Non-Redeemable c ommon Stock |
$ | ( |
) | $ | $ | ( |
) | |||||
Six months |
||||||||||||
Basic and diluted weighted average shares outstanding, common stock subject to redemption |
( |
) | ||||||||||
Basic and diluted weighted average shares outstanding, common stock not subject to redemption |
( |
) | ||||||||||
EPS - Redeemable c ommon Stock |
$ | $ | $ | |||||||||
EPS - Non-Redeemable c ommon Stock |
$ | $ | ( |
) | $ |
Statement of Changes In Shareholders’ Equity (Deficit) for the three months ended June 30, 2021 |
As Previously Reported |
Restatement Adjustment |
As Restated |
|||||||||
Remeasurement of common st subject to possible redemptionock |
$ |
$ |
( |
) |
$ |
Amortized Cost and Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value as of September 30, 2021 |
|||||||||||||
U.S. Money Market |
$ | $ | $ | $ | ||||||||||||
U.S. Treasury Securities |
||||||||||||||||
$ | $ | $ | $ |
• | 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. |
Redeemable Common Stock |
Non-Redeemable Common Stock |
|||||||
For the three months ended Sept 30, 2021 |
||||||||
Allocation of net income including common stock subject to redemption outstanding |
$ |
$ |
||||||
Weighted Average Common Stock |
||||||||
Basic and Diluted net income per share |
$ |
$ |
||||||
For the nine months ended Sept 30, 2021 |
||||||||
Allocation of net income including common stock subject to possible redemption |
$ |
$ |
||||||
Weighted Average Common Stock |
||||||||
Basic and Diluted net income per share |
$ |
$ |
Gross proceeds from public issuance |
$ | |||
Less: |
||||
Proceeds allocated to public warrants |
( |
) | ||
Redeemable common stock issuance costs |
( |
) | ||
|
|
|||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
|
|
|||
Contingently redeemable common stock |
$ | |||
|
|
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported last sale price of the Common Stock equals or exceeds $ days within a on the third trading day prior to the date the Company sends to the notice of redemption to the warrant holders. |
Warrant liability at March 1, 2021, as adjusted for over-allotment |
$ | |||
Change in fair value of warrant liabilities |
( |
) | ||
Warrant liabilities at September 30, 2021 |
$ |
September 30, 2021 |
March 1, 2021 |
|||||||
Exercise price |
$ | $ | ||||||
Share price |
$ | $ | ||||||
Volatility |
% | % | ||||||
Expected life of the options to convert |
||||||||
Risk-free rate |
% | % | ||||||
Dividend yield |
% | % | ||||||
Likelihood of completing a business combination |
% | % |
September 30, 2021 |
Quoted Prices In Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||||||
Liabilities: |
||||||||||||||||
Warrant liability - Public Warrants |
$ | $ | $ | — | $ | — | ||||||||||
Warrant liability – Private Warrants |
||||||||||||||||
$ | $ | $ | $ |
• | may significantly dilute the equity interest of investors in our Initial Public Offering; |
• | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change of control if a substantial number of shares of our 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; and |
• | may adversely affect prevailing market prices for our Units, common stock and/or warrants. Similarly, if we issue debt securities, it could result in: |
• | default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves 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; |
• | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and |
• | other disadvantages compared to our competitors who have less debt. |
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
ISLEWORTH HEALTHCARE ACQUISITION CORP. | ||||||
Date: November 16, 2021 | By: | /s/ Robert Whitehead | ||||
Name: | Robert Whitehead | |||||
Title: | Chief Executive Officer | |||||
By: | /s/ Dan Halvorson | |||||
Name: | Dan Halvorson | |||||
Title: | Chief Financial Officer |