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) |
(Commission File Number) |
(I.R.S. Employer Identification Number) | ||
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-third of one redeemable warrant to purchase one share of Class A common stock |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page No. |
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Item 1. |
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1 |
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2 |
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3 |
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4 |
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5 |
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Item 2. |
17 |
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Item 3. |
19 |
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Item 4. |
19 |
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20 |
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Item 1. |
20 |
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Item 1A. |
20 |
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Item 2. |
20 |
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Item 3. |
21 |
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Item 4. |
21 |
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Item 5. |
21 |
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Item 6. |
21 |
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22 |
Item 1. |
Financial Information |
September 30, 2021 |
December 31, 2020 |
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(unaudited) |
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(auditied) |
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ASSETS |
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CURRENT ASSETS |
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Cash |
$ | $ | ||||||
Prepaid expenses |
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Total current assets |
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NONCURRENT ASSETS |
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Cash held in trust account |
— | |||||||
Other assets |
— | |||||||
Derivative forward purchase agreement |
— | |||||||
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Total noncurrent assets |
— | |||||||
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TOTAL ASSETS |
$ | $ | ||||||
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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CURRENT LIABILITIES |
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Accounts payable |
$ | $ | ||||||
Accrued deferred offering costs |
— | |||||||
Franchise tax payable |
— | |||||||
No te payable – related party |
— | |||||||
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Total current liabilities |
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LONG-TERM LIABILITIES |
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Deferred underwriting commissions |
— | |||||||
Derivative warrant liabilities |
— | |||||||
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Total liabilities |
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Commitments and Contingencies |
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Redeemable Class A common stock; |
— | |||||||
STOCKHOLDERS’ DEFICIT |
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Preferred stock, $ September 30, 2021 and December 31, 2020, respectively |
— | |||||||
Class A common stock, $ |
|
|
— |
|
|
|
— |
|
Class B common stock, $ September 30, 2021 and December 31, 2020, respectively |
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Additional paid-in capital |
— | |||||||
Accumulated deficit |
( |
) | ( |
) | ||||
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|
|
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Total Stockholders’ Deficit |
( |
) | ( |
) | ||||
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|
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
$ | |
$ | |
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|
|
|
|
Three Months Ended September 30, 2021 |
Nine Months Ended September 30, 2021 |
August 31, 2020 (inception) through September 30, 2020 |
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OPERATING EXPENSES |
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General and administrative expenses |
$ | $ | $ | |||||||||
Franchise tax expense |
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Total operating expenses |
( |
) | ( |
) | ( |
) | ||||||
OTHER INCOME (EXPENSE) |
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Interest income on marketable securities held in Trust Account |
||||||||||||
Underwriting discounts and offering costs attributed to derivative warrant liability |
— | ( |
) | |||||||||
Change in fair value of derivative warrant liabilities |
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Change in fair value of derivative forward purchase agreement |
( |
) | ||||||||||
Total other income |
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INCOME (LOSS) BEFORE INCOME TAX |
( |
) | ||||||||||
Income tax expense (benefit) |
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NET INCOME (LOSS) |
$ | $ | |
$ | ( |
) | ||||||
Basic and diluted weighted average shares outstanding, Class A common stock |
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Basic and diluted net income (loss) per share, Class A common stock |
$ | $ | $ | |||||||||
Basic and diluted weighted average shares outstanding, Class B |
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Basic and diluted net income (loss) per share, Class B common stock |
$ | $ | $ | ( |
) |
(1) | The weighted average shares outstanding for the period from August 31, 2020 (inception) through September 30, 2020 excludes an aggregate of up to Class B common stock that was subject to forfeiture if the over-allotment option was exercised in full or in part by the underwriters. The underwriters partially exercised their over-allotment shares on January 29, 2021; therefore the Sponsor forfeited Founder Shares as a result of the partial exercise of the over-allotment shares, while the remaining |
Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
(Accumulated Deficit) |
Total Stockholders’ Deficit |
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Shares |
Amount |
Shares |
Amount |
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Balance—December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Forfeiture of founder shares (2) |
— |
— |
( |
) |
( |
) |
— |
— |
||||||||||||||||||||
Initial classification of derivative forward purchase agreement |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||
Accretion to shares subject to possible redemption |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Balance—March 31, 2021 |
— |
— |
— |
( |
) | ( |
) | |||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Balance—June 30, 2021 |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
|||||||||||||||||||||||
Balance—September 30, 2021 |
— |
$ |
— |
$ |
$ |
— |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||
Additional Paid-in Capital |
(Accumulated Deficit) |
Total Stockholders’ Deficit |
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Class A Common Stock |
Class B Common Stock |
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Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance—August 31, 2020 (inception) |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||
Issuance of Class B stock to Sponsor (1) |
— |
— |
— |
|||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||
Balance—September 30, 2020 |
— |
$ |
— |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||
(1) | The Class B common stock includes an aggregate of up to Class B common stock that was subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. |
(2) |
On January 29, 2021 the Sponsor forfeited |
Nine Months Ended September 30, 2021 |
August 31, 2020 (inception) through September 30, 2020 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income to net cash used in operating activities: |
— | |||||||
Interest earned on cash held in Trust Account |
( |
) | ||||||
Underwriting discounts and transaction costs attributed to warrant liability |
||||||||
Change in fair value of warrant liabilities |
( |
) | ||||||
Change in fair value of derivative forward purchase agreement |
( |
) | ||||||
Changes in operating assets and liabilities: |
— | |||||||
Prepaid expenses |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Other assets |
( |
) | ||||||
Franchise tax payable |
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|
|
|
|
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Net cash used in operating activities |
( |
) | ||||||
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|
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Investment of cash in Trust Account |
( |
) | ||||||
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|
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Net cash used in investing activities |
( |
) | ||||||
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|
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CASH FLOW FROM FINANCING ACTIVITIES |
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Proceeds from sale of Units, net of underwriting discounts paid |
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Proceeds from sale of Private Placement Warrants |
||||||||
Proceeds from sale of Class B common stock |
— | |||||||
Proceeds from issuance of note payable – related party |
— | |||||||
Repayment of note payable – related party |
( |
) | ||||||
Payment of offering costs |
( |
) | ( |
) | ||||
|
|
|
|
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Net cash provided by financing activities |
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NET CHANGE IN CASH |
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CASH, BEGINNING OF PERIOD |
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|
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CASH, END OF PERIOD |
$ | $ | ||||||
|
|
|
|
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SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES |
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Initial classification of derivative warrant liability |
$ | $ | ||||||
Initial classification of derivative forward purchase agreement |
$ | ( |
) | $ | ||||
Initial classification of common stock subject to possible redemption, as revised |
$ | $ | ||||||
Deferred underwriting fees charged to additional paid in capital |
$ | $ | ||||||
Deferred offering costs included in accrued deferred offering costs |
$ | $ |
Balance Sheet as of March 31, 2021 (unaudited) |
As previously reported |
Adjustment |
As revised |
|||||||||
Class A common stock subject to redemption |
$ |
$ |
$ |
|||||||||
Class A Common stock |
$ |
$ |
( |
) |
$ |
— |
||||||
Retained Earnings (Accumulated deficit) |
$ |
$ |
( |
) |
$ |
( |
) | |||||
Total Stockholders’ Equity (deficit) |
$ |
$ |
( |
) |
$ |
( |
) |
Balance Sheet as of June 30, 2021 (unaudited) |
As previously reported |
Adjustment |
As revised |
|||||||||
Class A common stock subject to redemption |
$ |
$ |
$ |
|||||||||
Class A Common stock |
$ |
$ |
( |
) |
$ |
— |
||||||
Retained Earnings (Accumulated deficit) |
$ |
$ |
( |
) |
$ |
( |
) | |||||
Total Stockholders’ Equity (deficit) |
$ |
$ |
( |
) |
$ |
( |
) |
Statement of cash flows as of March 31, 2021 (unaudited) |
As previously reported |
Adjustment |
As revised |
|||||||||
Initial classification of common stock subject to redemption |
$ |
$ |
$ |
|||||||||
Change in value of common stock subject to possible redemption |
( |
) |
— |
Statement of cash flows as of June 30, 2021 (unaudited) |
As previously reported |
Adjustment |
As revised |
|||||||||
Initial classification of common stock subject to redemption |
$ |
$ |
$ |
|||||||||
Change in value of common stock subject to possible redemption |
( |
) |
— |
Earnings per share |
Three months ended March 31, 2021 |
Three months ended June 30, 2021 |
Six months ended June 30, 2021 |
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As previously reported |
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Class A Common Stock |
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Basic and diluted net loss per share |
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Numerator |
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Allocation of net income |
$ |
— |
$ |
— |
$ |
— |
||||||
Denominator |
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Weighted-average shares outstanding |
||||||||||||
Basic and diluted net income per share |
$ |
— |
$ |
— |
$ |
— |
||||||
Class B Common Stock |
||||||||||||
Basic and diluted net loss per share |
||||||||||||
Numerator |
||||||||||||
Allocation of net income |
$ |
$ |
( |
) |
$ |
|||||||
Denominator |
||||||||||||
Weighted-average shares outstanding |
||||||||||||
Basic and diluted net income per share |
$ |
$ |
( |
) |
$ |
|||||||
Earnings per share |
Three months ended March 31, 2021 |
Three months ended June 30, 2021 |
Six months ended June 30, 2021 |
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As revised |
||||||||||||
Class A Common Stock |
||||||||||||
Basic and diluted net loss per share |
||||||||||||
Numerator |
||||||||||||
Allocation of net income |
$ |
$ |
( |
) |
$ |
|||||||
Denominator |
||||||||||||
Weighted-average shares outstanding |
||||||||||||
Basic and diluted net income per share |
$ |
$ |
( |
) |
$ |
|||||||
Class B Common Stock |
||||||||||||
Basic and diluted net loss per share |
||||||||||||
Numerator |
||||||||||||
Allocation of net income |
$ |
$ |
( |
) |
$ |
|||||||
Denominator |
— |
|||||||||||
Weighted-average shares outstanding |
||||||||||||
Basic and diluted net income per share |
$ |
$ |
( |
) |
$ |
|||||||
Earnings per share |
Three months ended March 31, 2021 |
Three months ended June 30, 2021 |
Six months ended June 30, 2021 |
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Impact of change on calculation |
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Class A Common Stock |
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Basic and diluted net loss per share |
||||||||||||
Numerator |
||||||||||||
Allocation of net income |
$ |
( |
) |
$ |
$ |
( |
) | |||||
Denominator |
||||||||||||
Weighted-average shares outstanding |
( |
) |
||||||||||
Basic and diluted net income per share |
$ |
( |
) |
$ |
$ |
( |
) | |||||
Class B Common Stock |
||||||||||||
Basic and diluted net loss per share |
||||||||||||
Numerator |
||||||||||||
Allocation of net income |
$ |
$ |
( |
) |
$ |
|||||||
Denominator |
— |
|||||||||||
Weighted-average shares outstanding |
||||||||||||
Basic and diluted net income per share |
$ |
$ |
( |
) |
$ |
Fair Value Measurement as of September 30, 2021 |
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Level 1 |
Level 2 |
Level 3 |
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Assets: |
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Investments held in trust account (1) |
$ | |
$ | — | $ | — | ||||||
Derivative forward purchase agreements (2) |
$ | — | $ | — | $ | |||||||
Liabilities: |
||||||||||||
Derivative warrant liabilities—Public Warrants (3) |
$ | $ | — | $ | — | |||||||
Derivative warrant liabilities—Private Placement Warrants (4) |
$ | — | $ | — | $ |
(1) |
The fair value of the investments held in Trust Account was based on the quoted market price. |
(2) |
The fair value of the derivative forward purchase agreement was based on the forward price formula. |
(3) |
The fair value of the derivative warrant liabilities – Public Warrants was based the quoted market price for MIT.W as of the reporting date. |
(4) |
The fair value of the derivative warrant liabilities – Private Placement Warrants was based on a modified Black-Scholes model. |
February 2, 2021 (Initial Measurement) |
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Strike price |
$ |
|||
Term (in years) |
||||
Risk-free rate |
% | |||
Volatility |
% | |||
Dividend yield |
% | |||
Fair value of Public Warrants |
$ |
|||
Fair value of Private Placement Warrants |
$ |
September 30, 2021 |
||||
Strike price |
$ |
|||
Term (in years) |
||||
Risk-free rate |
% | |||
Volatility |
% | |||
Dividend yield |
% | |||
Fair value of Private Placement Warrants |
$ |
• | Term – the expected life of the warrants was assumed to be equivalent to their remaining contractual term. |
• | Risk-free rate – the risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal to the remaining expected life of the Warrants. |
• | Volatility – the Company estimated the volatility of its common stock warrants based on implied volatility and actual historical volatility of a group of comparable publicly traded companies observed over a historical period equal to the expected remaining life of the Warrants. |
• | Dividend yield – the dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the Private Placement Warrants. |
Public Warrants |
Private Warrants |
Total Derivative Warrants Liability |
||||||||||
Derivative warrant liabilities at January 1, 2021 |
$ | $ | $ | |||||||||
Issuance of Public and Private Warrants (1) |
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Change in fair value of warrant liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Derivative warrant liabilities at March 31, 2021 |
$ | $ | $ | |||||||||
Change in fair value of warrant liabilities |
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|
|
|
|
|
|
|||||||
Derivative warrant liabilities at June 30, 2021 |
$ | $ | $ | |||||||||
Change in fair value of warrant liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Derivative warrant liabilities at September 30, 2021 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
(1) | – During the 1 st quarter of 2021, these warrants were transferred from Level 3 in the fair value hierarchy to Level 1 in the fair value hierarchy |
FPA Asset (Liability) |
||||
Derivative forward purchase agreement at January 1, 2021 |
$ | |||
Executed forward purchase agreement in connection with IPO |
( |
) | ||
Change in fair value of the derivative forward purchase agreement |
||||
|
|
|||
Derivative forward purchase agreement at March 31, 2021 |
$ |
|||
Change in fair value of the derivative forward purchase agreement |
||||
Derivative forward purchase agreement at June 30, 2021 |
$ |
|||
Change in fair value of the derivative forward purchase agreement |
( |
) | ||
|
|
|||
Derivative forward purchase agreement at September 30, 2021 |
$ | |||
|
|
• | in whole and not in part; |
• | at a price of $ |
• | at any time during the exercise period; |
• | upon a minimum of |
• | if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $ |
• | If, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. |
Three Months Ended |
Nine Months Ended |
August 31, 2020 (inception) through |
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September 30, 2021 |
September 30, 2021 |
September 30, 2020 |
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Class A |
Class B |
Class A |
Class B |
Class A |
Class B |
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Basic and diluted net loss per share |
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Numerator |
||||||||||||||||||||||||
Allocation of net income |
$ |
$ |
$ |
$ |
$ |
— |
$ |
( |
) | |||||||||||||||
Denominator |
||||||||||||||||||||||||
Weighted-average shares outstanding (1) |
— |
|||||||||||||||||||||||
Basic and diluted net income per share |
$ |
$ |
$ |
$ |
$ |
— |
$ |
( |
) |
(1) |
The weighted average shares outstanding for the period from August 31, 2020 (inception) through September 30, 2020 excludes an aggregate of up to |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits. |
* | Filed herewith. |
** | Furnished. |
MASON INDUSTRIAL TECHNOLOGY, INC. | ||||||
Date: November 9, 2021 | By: | /s/ Derek Satzinger | ||||
Name: | Derek Satzinger | |||||
Title: | Chief Financial Officer |