ANNUAL 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) |
(Commission File Number) |
(I.R.S. Employer Identification Number) | ||
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(Address of principal executive offices) |
(Zip Code) |
Title of Each Class: |
Trading Symbol: |
Name of Each Exchange on Which Registered: | ||
Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-fourth of one |
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redeemable warrant |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page |
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iii |
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1 |
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Item 1. |
1 |
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Item 1A. |
19 |
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Item 1B. |
54 |
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Item 2. |
54 |
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Item 3. |
54 |
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Item 4. |
54 |
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55 |
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Item 5. |
55 |
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Item 6. |
56 |
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Item 7. |
56 |
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Item 7A. |
61 |
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Item 8. |
61 |
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Item 9. |
61 |
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Item 9A. |
62 |
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Item 9B. |
62 |
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63 |
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Item 10. |
63 |
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Item 11. |
71 |
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Item 12. |
73 |
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Item 13. |
74 |
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Item 14. |
76 |
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77 |
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Item 15. |
77 |
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Item 16. |
78 |
• | “amended and restated memorandum and articles of association” are to the amended and restated memorandum and articles of association of the Company in place upon the consummation of our initial public offering; |
• |
“assets under management” or “AUM” are to assets managed by Oaktree and a proportionate amount ($27.2 billion) of the AUM reported by DoubleLine Capital LP (“Doubleline”), in which Oaktree owns a 20% minority interest (Oaktree’s methodology for calculating AUM includes (i) the net asset value of assets managed directly by Oaktree, (ii) the leverage on which management fees are charged, (iii) undrawn capital that Oaktree is entitled to call from investors in Oaktree funds pursuant to their capital commitments, (iv) for collateralized loan obligation vehicles, the aggregate par value of collateral assets and principal cash, (v) for publicly-traded business development companies (“BDCs”), gross assets (including assets acquired with leverage), net of cash, and (vi) Oaktree’s pro rata portion of the AUM reported by DoubleLine. Oaktree’s calculation of AUM may differ from the calculations of other asset managers and, as a result, Oaktree’s measurements of AUM may not be comparable to similar measures presented by other asset managers. Oaktree’s definition of AUM is not based on the definitions of AUM that may be set forth in agreements governing the investment funds, vehicles or accounts that it manages and is not calculated pursuant to regulatory definitions); |
• | “Companies Act” are to the Companies Act (2020 Revision) of the Cayman Islands as the same may be amended from time to time; |
• | “Founders” are to Patrick McCaney, Alexander Taubman, Zaid Pardesi and Mathew Pendo, senior investment professionals of Oaktree; |
• | “founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to our initial public offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”); |
• | “management” or our “management team” are to our executive officers and directors; |
• | “Oaktree” are to Oaktree Capital Management, L.P., an affiliate of our sponsor, and its affiliates where applicable; |
• |
“OACC” are to Oaktree Acquisition Corp. III, a special purpose acquisition company that expects to complete its initial public offering in 2021. |
• | “ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares; |
• | “private placement warrants” are to the warrants to be issued to our sponsor in a private placement simultaneously with the closing of our initial public offering and upon conversion of working capital loans, if any; |
• | “public shares” are to our Class A ordinary shares sold as part of the units in our initial public offering (whether they are purchased in our initial public offering or thereafter in the open market); |
• | “public shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares; provided that our sponsor’s and each member of our management team’s status as a “public shareholder” will only exist with respect to such public shares; and |
• | “sponsor” are to Oaktree Acquisition Holdings II, L.P., a Cayman Islands exempted limited partnership; |
• | “we,” “us,” “company” or “our company” are to Oaktree Acquisition Corp. II, a Cayman Islands exempted company. |
• | 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; |
• | our potential ability to obtain additional financing to complete our initial business combination; |
• | our pool of prospective target businesses; |
• | the ability of our officers and directors to generate a number of potential investment 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; |
• | the trust account not being subject to claims of third parties; |
• | our financial performance following our initial public offering; and |
• | the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this Report. |
• | Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination. |
• | Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
• | If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote. |
• | The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. |
• | The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. |
• | The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares. |
• | The requirement that we consummate an initial business combination within 24 months after the closing of our initial public offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets as we approach our business combination deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders. |
• | We may not be able to consummate an initial business combination within 24 months after the closing of our initial public offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. |
• | If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares or public warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares. |
• | Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless. |
• | Since our sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may have acquired during or may acquire after our initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. |
• | Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
• | Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests. |
• | Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination. |
• | Past performance by Oaktree or its affiliates, including the Value Equity Fund or our management team, may not be indicative of future performance of an investment in us. |
• | You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss. |
• | You will not be entitled to protections normally afforded to investors of many other blank check companies. |
• | The other risks and uncertainties discussed in “Risk Factors” and elsewhere in this report. |
ITEM 1. |
BUSINESS |
• | Operating companies in the public and private markets, defining corporate strategy, and identifying, mentoring and recruiting top talent; |
• | Growing companies, both organically and through strategic transactions, expanding product portfolios and broadening geographic footprints; |
• | Strategically investing in leading private and public industrial and consumer companies to help accelerate growth and maturation; |
• | Sourcing, structuring, acquiring and selling businesses; |
• | Accessing public and private capital markets to optimize capital structure, including financing businesses and helping companies transition ownership structures; and |
• | Fostering relationships with sellers, capital providers and experienced target management teams. |
• | Will benefit from a public currency |
• | Has a healthy growing platform |
• | Has a management team and/or a strong sponsor that desires a significant equity stake in the post-business combination company |
• | Can be acquired at an attractive valuation for public market investors |
• | Will be resilient to economic cycles |
• | Will have attractive cash flow profile and/or unit economics |
• | Will benefit from Oaktree’s long-term sponsorship as it looks to accelerate its growth in the public markets |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
• | We issue ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then outstanding (other than in a public offering); |
• | Any of our directors, officers or substantial shareholders (as defined by the NYSE rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or |
• | The issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
• | the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; |
• | the expected cost of holding a shareholder vote; |
• | the risk that the shareholders would fail to approve the proposed business combination; |
• | other time and budget constraints of the company; and |
• | additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
• | file proxy materials with the SEC. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
• | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
ITEM 1A. |
RISK FACTORS |
• | may significantly dilute the equity interest of our investors; |
• | may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
• | could cause a change in control if a substantial number of Class A ordinary shares 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 adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and |
• | will not result in adjustment to the exercise price of our warrants. |
• | 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 Class A ordinary shares; |
• | 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 Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and 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; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | solely dependent upon the performance of a single business, property or asset; or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, |
• | registration as an investment company; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | costs and difficulties inherent in managing cross-border business operations; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future business combinations may be effected; |
• | exchange listing and/or delisting requirements; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | local or regional economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | underdeveloped or unpredictable legal or regulatory systems; |
• | corruption; |
• | protection of intellectual property; |
• | social unrest, crime, strikes, riots and civil disturbances; |
• | regime changes and political upheaval; |
• | terrorist attacks and wars; and |
• | deterioration of political relations with the United States. |
• | we have a board that includes a majority of ‘independent directors,’ as defined under the rules of the NYSE; |
• | we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
• | we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
ITEM 2. |
PROPERTIES |
ITEM 3. |
LEGAL PROCEEDINGS |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
ITEM 6. |
SELECTED FINANCIAL DATA |
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; |
• | may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
• | could cause a change in control if a substantial number of our Class A ordinary shares 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 ordinary shares and/or warrants. Similarly, if we issue debt securities or otherwise incur significant debt, 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 Class A ordinary shares; |
• | 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 Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and 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; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. |
CONTROLS AND PROCEDURES |
ITEM 9B. |
OTHER INFORMATION |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name |
Age |
Position | ||
Patrick McCaney | 40 | Chief Executive Officer and Director | ||
Alexander Taubman | 33 | President | ||
Zaid Pardesi | 38 | Chief Financial Officer and Head of M&A | ||
Mathew Pendo | 57 | Chief Operating Officer | ||
John Frank | 64 | Chairman and Director | ||
Paul Meister | 68 | Director | ||
Andrea Wong | 54 | Director | ||
Anthony Grillo | 65 | Director |
• | meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems; |
• | monitoring the independence of the independent registered public accounting firm; |
• | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
• | inquiring and discussing with management our compliance with applicable laws and regulations; |
• | pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed; |
• | appointing or replacing the independent registered public accounting firm; |
• | determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; |
• | monitoring compliance on a quarterly basis with the terms of our initial public offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of our initial public offering; and |
• | reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval. |
• | should have demonstrated notable or significant achievements in business, education or public service; |
• | should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and |
• | should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, 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 the compensation of all of our other Section 16 executive officers; |
• | reviewing 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 executive officers and employees; |
• | 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 directors. |
• | duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; |
• | duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; |
• | directors should not improperly fetter the exercise of future discretion; |
• | duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and |
• | duty to exercise independent judgment. |
Individual |
Entity |
Entity’s Business |
Affiliation | |||
Patrick McCaney | Oaktree Capital Management, L.P. | Asset Management | Managing Director and Portfolio Manager | |||
Oaktree Acquisition Corp. III | Special Purpose Acquisition Company | Co-Chief Executive Officer and Director | ||||
Alexander Taubman | Oaktree Capital Management, L.P. | Asset Management | Managing Director | |||
Oaktree Acquisition Corp. III | Special Purpose Acquisition Company | Co-Chief Executive Officer | ||||
Taubman Ventures Group LLC and certain affiliates | Asset Management | Advisor | ||||
Zaid Pardesi | Oaktree Capital Management, L.P. | Asset Management | Managing Director | |||
Oaktree Acquisition Corp. III | Special Purpose Acquisition | President and Chief Financial | ||||
Company | Officer | |||||
John Frank | Oaktree Capital Management, L.P. | Asset Management | Vice Chairman | |||
Oaktree Acquisition Corp. III | Special Purpose Acquisition Company | Chairman and Director | ||||
Oaktree Specialty Lending Corporation | Asset Management | Chairman and Director | ||||
Chevron Corporation | Energy | Director | ||||
Mathew Pendo | Oaktree Capital Management, L.P. | Asset Management | Managing Director, Head of Corporate Development and Capital Markets | |||
Oaktree Acquisition Corp. III | Special Purpose Acquisition Company | Chief Operating Officer | ||||
Oaktree Specialty Lending Corporation | Asset Management | President and Chief Operating Officer | ||||
Oaktree Strategic Income II | Asset Management | President and Chief Operating Officer | ||||
Anthony Grillo | WeR.AI | Software Development | Director | |||
NarrativeWave | Software Development | Director | ||||
Littelfuse | Electronic Component Manufacturing | Director | ||||
Paul Meister | Liberty Lane Partners, LLC | Private Equity | Co-Founder | |||
Perspecta Trust | Investment, Trust and Wealth Advisory Services | Co-Founder |
Quanterix Corporation | Healthcare | Director | ||||
University of Michigan’s Life Sciences Institute | Life Sciences | Co-Chair of External Advisory Board; Chair of the Provost’s Advisory Committee | ||||
Aptiv PLC | Technology | Director | ||||
Amneal Pharmaceuticals, Inc. | Healthcare | Chairman and Director | ||||
Andrea Wong | Liberty Media Corporation | Media | Director | |||
Qurate Retail Group | Media | Director | ||||
Hudson Pacific Properties | Real Estate | Director | ||||
Roblox Corporation | Technology | Director |
• | Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. |
• | Our sponsor subscribed for founder shares and purchased private placement warrants in a transaction that closed simultaneously with the closing of our initial public offering. |
• | Our sponsor and each member of our management team have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of our initial public offering. Additionally, our sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless. Except as described herein, our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. The private placement warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and directors owns ordinary shares or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. |
• | 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 is included by a target business as a condition to any agreement with respect to our initial business combination. |
ITEM 11. |
EXECUTIVE COMPENSATION |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS |
• | 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. |
Class A ordinary shares |
Class B ordinary shares |
Ordinary shares |
||||||||||||||||||
Name of Beneficial Owners (1) |
Number of Shares Beneficially Owned |
Approximate Percentage of Class |
Number of Shares Beneficially Owned |
Approximate Percentage of Class |
Approximate Percentage of Voting Control |
|||||||||||||||
Oaktree Acquisition Holdings II, L.P. (our sponsor) (2) |
— | — | 6,250,000 | 100 | % | 20.0 | % | |||||||||||||
Patrick McCaney (3) |
— | — | — | — | — | |||||||||||||||
Alex Taubman (3) |
— | — | — | — | — | |||||||||||||||
Zaid Pardesi (3) |
— | — | — | — | — | |||||||||||||||
John Frank (3) |
— | — | — | — | — | |||||||||||||||
Mathew Pendo (3) |
— | — | — | — | — | |||||||||||||||
Andrea Wong (3) |
— | — | — | — | — | |||||||||||||||
Anthony Grillo (3) |
— | — | — | — | — | |||||||||||||||
Paul Meister (3) |
— | — | — | — | — | |||||||||||||||
All officers and directors as a group (eight individuals) |
— | — | — | — | — | |||||||||||||||
Integrated Core Strategies (US) LLC (4) |
1,600,480 | 6.4 | % | — | — | 5.1 | % |
(1) | Unless otherwise noted, the business address of each of our shareholders is 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071. |
(2) | Represents shares directly held by Oaktree Acquisition Holdings II, L.P. (“Holdings”). The general partner of Holdings is Oaktree Acquisition Holdings II GP Ltd. (“Holdings GP”). The director of Holdings GP is Oaktree. The director of Oaktree is Oaktree Capital Management GP, LLC (“Management GP”). The sole managing member of Management GP is Atlas OCM Holdings, LLC (“Atlas”). Oaktree Capital Group Holdings GP, LLC (“OCGH GP”) is the indirect owner of the class B units of Atlas. Brookfield Asset Management, Inc. (“BAM”) is the indirect owner of the class A units of Atlas. Partners Limited (“Partners”) is the sole owner of Class B Limited Voting Shares of BAM. Each of Holdings, Holdings GP, Oaktree, Management GP, Atlas, BAM, and Partners, disclaims beneficial ownership of the Class B ordinary shares reported herein except to the extent of their respective pecuniary interest therein. The principal business office of each of Holdings, Holdings GP, Oaktree, Management GP, Atlas and OCGH GP is 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071. The Principal Business Office of each of BAM and Partners is C/O Oaktree Capital Management, L.P., 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071. |
(3) | Does not include any shares indirectly owned by this individual as a result of his partnership interest in our sponsor. |
(4) | Includes Class A ordinary shares beneficially held by Integrated Core Strategies (US) LLC, a Delaware limited liability company (“Integrated Core Strategies”), Riverview Group LLC, a Delaware limited liability company (“Riverview Group”), ICS Opportunities, Ltd., an exempted company organized under the laws of the Cayman Islands (“ICS Opportunities”), Millennium International Management LP, a Delaware limited partnership (“Millennium International Management”), Millennium Management LLC, a Delaware limited liability company (“Millennium Management”), Millennium Group Management LLC, a Delaware limited liability company (“Millennium Group Management”), and Israel A. Englander, a United States citizen (“Mr. Englander”), based solely on the Schedule 13G/A filed jointly by Integrated Core Strategies, Riverview Group, ICS Opportunities, Millennium International Management, Millennium Management, Millennium Group Management, and Mr. Englander, with the SEC on January 25, 2021. Integrated Core Strategies, Riverview Group, and ICS Opportunities beneficially own an aggregate of 1,600,480 of the company’s Class A ordinary shares as a result of holding 1,321,634 of the company’s Class A ordinary shares and 278,846 of the company’s units. Millennium International Management, the investment manager to ICS Opportunities, Millennium Management, the general partner of the managing member of Integrated Core Strategies and Riverview Group and the general partner of the 100% owner of ICS Opportunities, Millennium Group Management, the managing member of Millennium Management and the general partner of Millennium International Management, and Mr. Englander, the sole voting trustee of a trust which is the managing member of Millennium Group Management, may be deemed to beneficially own 1,600,480 of the company’s Class A ordinary shares. The foregoing should not be construed in and of itself as an admission by Millennium International Management, Millennium Management, Millennium Group Management or Mr. Englander as to beneficial ownership of the securities owned by Integrated Core Strategies, Riverview Group or ICS Opportunities, as the case may be. The business address of each of Integrated Core Strategies, Riverview Group, and Mr. Englander is c/o Millennium Management LLC, 666 Fifth Avenue, New York, New York 10103; the business address of ICS Opportunities is c/o Millennium International Management LP, 666 Fifth Avenue, New York, New York 10103 ;the business address of each of Millennium International Management, Millennium Management, and Millennium Group Management is 666 Fifth Avenue, New York, New York 10103. |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENTS SCHEDULES |
Exhibit No. |
Description | |
101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label 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) |
* | Filed herewith |
** | Furnished herewith |
(1) | Incorporated by reference to the company’s Form S-1/A, filed with the SEC on September 14, 2020. |
(2) | Incorporated by reference to the company’s Form 8-K, filed with the SEC on September 22, 2020. |
(3) | Incorporated by reference to the company’s Form S-1, filed with the SEC on August 31, 2020. |
(4) | Incorporated by reference to the Initial 10-K filed on March 31, 2021. |
ITEM 16. |
FORM 10-K SUMMARY |
OAKTREE ACQUISITION CORP. II |
/s/ Zaid Pardesi |
Name: Zaid Pardesi |
Title: Chief Financial Officer and Head of M&A |
Name |
Position |
Date | ||
/s/ Patrick McCaney |
Chief Executive Officer, Director and Authorized Representative | December 13, 2021 | ||
Patrick McCaney | ( Principal Executive Officer |
|||
/s/ Zaid Pardesi | Chief Financial Officer and Head of M&A |
December 13, 2021 | ||
Zaid Pardesi | ( Principal Financial and Accounting Officer |
|||
/s/ John Frank | Chairman and Director | December 13, 2021 | ||
John Frank | ||||
/s/ Paul Meister | Director | December 13, 2021 | ||
Paul Meister | ||||
/s/ Andrea Wong | Director | December 13, 2021 | ||
Andrea Wong | ||||
/s/ Anthony Grillo | Director | December 13, 2021 | ||
Anthony Grillo |
Page No. |
||||
F-2 | ||||
Financial Statements: |
||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7-F-20 |
Assets |
||||
Current assets: |
||||
Cash |
$ | |||
Prepaid expenses |
||||
Total current assets |
||||
Investments held in Trust Account |
||||
Total assets |
$ |
|||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit |
||||
Current liabilities: |
||||
Accounts payable |
$ | |||
Accrued expenses |
||||
Accrued expenses—related party |
||||
Advance from related party |
||||
Total current liabilities |
||||
Deferred legal fees |
||||
Deferred underwriting commissions |
||||
Derivative warrant liabilities |
||||
Total liabilities |
||||
Commitments and Contingencies |
||||
Class A ordinary shares; |
||||
Shareholders’ Deficit: |
||||
Preference shares, $ |
||||
Class A ordinary shares, $ |
||||
Class B ordinary shares, $ |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
Total shareholders’ deficit |
( |
) | ||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit |
$ |
|||
General and administrative expenses |
$ | |||
Loss from operations |
( |
) | ||
Other income (expense) |
||||
Unrealized gain on investments held in Trust Account |
||||
Change in fair value of derivative warrant liabilities |
( |
) | ||
Financing costs – derivative warrant liabilities |
( |
) | ||
Total other income (expense) |
( |
) | ||
Net loss |
$ | ( |
) | |
Basic and diluted weighted average shares outstanding of Class A ordinary shares |
||||
Basic and diluted net income loss per ordinary share |
$ | ( |
) | |
Basic and diluted weighted average shares outstanding of Class B ordinary shares |
||||
Basic and diluted net loss per ordinary share |
$ | ( |
) | |
Ordinary Shares |
||||||||||||||||||||||||||||
Class A |
Class B |
Additional Paid-in |
Accumulated |
Total Shareholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Equity |
||||||||||||||||||||||
Balance—August 5, 2020 (inception) |
$ |
$ | $ | $ | $ | |||||||||||||||||||||||
Issuance of Class B ordinary shares to Sponsor |
— | — | — | |||||||||||||||||||||||||
Excess of cash receipts over the fair value of the private warrants sold to Sponsor |
— | — | — | — | — | |||||||||||||||||||||||
Forfeiture of Class B ordinary shares by Sponsor |
— | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||
Accretion on Class A ordinary shares subject to possible redemption |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance—December 31, 2020 |
— |
$ |
— |
$ |
$ |
— |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
||||
Unrealized gain on investments held in Trust Account |
( |
) | ||
General and administrative expenses paid by related party under note payable |
||||
Change in fair value of derivative warrant liabilities |
||||
Financing costs – derivative warrant liabilities |
||||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accounts payable |
||||
Accrued expenses |
||||
Due to related party |
||||
Net cash used in operating activities |
( |
) | ||
Cash Flows from Investing Activities |
||||
Cash deposited in Trust Account |
( |
) | ||
Net cash used in investing activities |
( |
) | ||
Cash Flows from Financing Activities: |
||||
Proceeds received from initial public offering, gross |
||||
Proceeds received from private placement |
||||
Offering costs paid |
( |
) | ||
Net cash provided by financing activities |
||||
Net increase in cash |
||||
Cash - beginning of the period |
||||
Cash - end of the period |
$ |
|||
Supplemental disclosure of noncash activities: |
||||
Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares |
$ | |||
Offering costs included in accrued expenses |
$ | |||
Offering costs included in note payable – related party |
$ | |||
Forfeiture of Class B ordinary shares from Sponsor |
$ | |||
Deferred legal fees |
$ | |||
Deferred underwriting commissions in connection with the initial public offering |
$ |
As of December 31, 2020 |
||||||||||||
As Previously |
Restatement |
|||||||||||
Reported |
Adjustment |
As Restated |
||||||||||
Balance Sheet |
||||||||||||
Total assets |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
Class A ordinary shares, $ |
||||||||||||
Shareholders’ equity (deficit) |
||||||||||||
Preference shares- $ |
||||||||||||
Class A ordinary shares - $ |
( |
) | ||||||||||
Class B ordinary shares - $ |
||||||||||||
Additional paid-in-capital |
( |
) | ||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total shareholders’ equity (deficit) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total liabilities, Class A ordinary shares subject to possible redemption, and shareholders’ equity (deficit) |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Earnings Per Share for Class A ordinary shares |
||||||||||||
As Reported |
Adjustment |
As Adjusted |
||||||||||
For the period from August 5, 2020 (inception) through December 31, 2020 |
||||||||||||
Net loss |
$ | ( |
) | $ | $ | ( |
) | |||||
Weighted average shares outstanding |
( |
) | ||||||||||
Basic and diluted earnings per share |
$ | $ | ( |
) | $ | ( |
) |
Earnings Per Share for Class B common stock |
||||||||||||
As Reported |
Adjustment |
As Adjusted |
||||||||||
For the period from August 5, 2020 (inception) through December 31, 2020 |
||||||||||||
Net loss |
$ | ( |
) | $ | $ | ( |
) | |||||
Weighted average shares outstanding |
||||||||||||
Basic and diluted earnings per share |
$ | ( |
) | $ | $ | ( |
) |
As Reported |
Adjustment |
As Restated |
||||||||||
Supplemental Disclosure of Noncash Financing Activities: |
||||||||||||
Initial value of Class A ordinary shares subject to possible redemption as revised |
$ | $ | ( |
) | $ | |||||||
Change in value of Class A ordinary shares subject to possible redemption |
$ | ( |
) | $ | $ |
As of September 21, 2020 |
As Revised |
Adjustment |
As Restated |
|||||||||
Total assets |
$ |
$ |
||||||||||
Total liabilities |
$ |
$ |
||||||||||
Class A common stock subject to possible redemption |
||||||||||||
Preferred stock |
— | — | ||||||||||
Class A common stock |
( |
) | — | |||||||||
Class B common stock |
— | |||||||||||
Additional paid-in capital |
( |
) | — | |||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity (deficit) |
$ |
$ |
( |
) |
$ |
( |
) | |||||
|
|
|
|
|
|
|||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit) |
$ |
$ |
— |
$ |
||||||||
|
|
|
|
|
|
• | Level 1, defined as observable inputs such as quoted prices 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. |
For the Period From August 5, 2020 (inception) Through December 31, 2020 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per common share: |
||||||||
Numerator: |
||||||||
Allocation of net income |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average common shares outstanding |
||||||||
|
|
|
|
|||||
Basic and diluted net income per common share |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Gross Proceeds |
$ | |||
Less: |
— | |||
Offering costs allocated to Class A shares subject to possible redemption |
( |
) | ||
Proceeds allocated to Public Warrants at issuance |
( |
) | ||
Plus: |
||||
Accrection on Class A ordinary shares subject to possible redemption amount |
||||
|
|
|||
Class A ordinary shares subject to possible redemption |
$ |
|||
|
|
• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of |
• | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ |
• |
in whole and not in part; |
• | at $ |
• | if, and only if, the reported closing price of Class A ordinary shares equals or exceeds $ |
• | if the closing price of the Class A ordinary shares for any |
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||
Assets: |
||||||||||||
Investments held in Trust Account |
$ | $ | — | $ | — | |||||||
Liabilities: |
||||||||||||
Derivative warrant liabilities – Public Warrants |
$ | $ | — | $ | — | |||||||
Derivative warrant liabilities - Private Warrants |
$ | — | $ | — | $ |
As of September 21, 2020 |
As of September 30, 2020 |
As of December 31, 2020 |
||||||||||
Stock price |
$ | $ | $ | |||||||||
Volatility |
% | % | % | |||||||||
Expected life of the options to convert |
||||||||||||
Risk-free rate |
% | % | % | |||||||||
Dividend yield |
Derivative warrant liabilities at August 5, 2020 (inception) |
$ | |||
Issuance of Public and Private Warrants |
||||
Change in fair value of derivative warrant liabilities |
||||
|
|
|||
Transfer of Public Warrants to Level 1 |
( |
) | ||
Derivative warrant liabilities at December 31, 2020 |
$ | |||
|
|
As of September 30, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Unaudited Condensed Balance Sheet |
||||||||||||
Total assets |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
Class A ordinary shares, $ |
||||||||||||
Shareholders’ equity |
||||||||||||
Preference shares - $ |
||||||||||||
Class A ordinary shares - $ |
( |
) | ||||||||||
Class B ordinary shares - $ |
||||||||||||
Additional paid-in-capital |
( |
) | ||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total shareholders’ equity |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders’ equity |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Period From August 5, 2020 (Inception) Through September 30, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Unaudited Condensed Statement of Operations |
||||||||||||
Net loss |
$ | ( |
) | $ | $ | ( |
) | |||||
|
|
|
|
|
|
|||||||
Basic and Diluted weighted-average Class A common shares outstanding |
( |
) |
||||||||||
|
|
|
|
|||||||||
Basic and Diluted net loss per Class A share |
$ | ( |
) | $ | ( |
) | ||||||
|
|
|
|
|||||||||
Basic and Diluted weighted-average Class B common shares outstanding |
||||||||||||
|
|
|
|
|||||||||
Basic and Diluted net loss per Class B share |
$ | ( |
) | $ | ( |
) | ||||||
|
|
|
|
Period From August 5, 2020 (Inception) Through September 30, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Unaudited Condensed Statement of Cash Flows |
||||||||||||
Initial value of Class A ordinary shares subject to possible redemption as revised |
$ | $ | ( |
) | $ | |||||||
Change in initial value of Class A ordinary shares subject to possible redemption as revised |
$ |
( |
) | $ |
$ |