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Restatement of Previously Issued Financial Statements
 6 Months Ended
Jun. 30, 2021
Condensed Financial Information Disclosure [Abstract]  
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS  

 

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain provisions that provided for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant, which terms are similar to those contained in the warrant agreement governing the Company’s warrants.

 

The Company’s management evaluated the warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity.  ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock.  Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. The Company’s Private Warrants are not indexed to the Company’s common shares in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, the tender offer provision included in the warrant agreement fails the “classified in shareholders’ equity” criteria as contemplated by ASC Section 815-40-25. As a result, the only Private Warrants shall be classified as liabilities and the Public Warrants shall be classified as equity and the Company reevaluated the accounting treatment of the 4,600,000 warrants that were issued to the Company’s sponsor in an initial public offering (“Public Warrants”). The Company previously accounted for the Public Warrants as components of liabilities. 

 

In further consideration of the guidance in Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC 815”), the Company concluded that a provision in the warrant agreement related to certain transfer provisions precludes the Private Warrants from being accounted for as components of equity. As the Private Warrants meet the definition of a derivative as contemplated in ASC 815, the Private Warrants should be recorded as derivative liabilities on the balance sheet and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the Statements of Operations in the period of change.

 

In Addition, the Company also concluded it should revise its consolidated financial statements to classify all common stock subject to possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480), paragraph 10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its common stock in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Company considered that the threshold would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside equity. As a result, the Company revised its previously filed financial statements to classify all common stock as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480. The change in the carrying value of redeemable shares of common stock resulted in charges against additional paid-in capital and accumulated deficit.

 

The following tables summarize the effect of the revision on each financial statement line item as of the dates, and for the period, indicated:

 

Adjustment #1 refer to reclassification of public warrants from warrant liabilities to equity component.

 

Adjustment #2 refer to reclassification of all public shares to temporary equity.

 

    As
Previously
Reported		     Adjustments #1     Adjustments #2     As
Restated		  
Balance sheet as of April 9, 2021                        
Warrant liabilities     14,506,560       (13,248,000 )    
-
       1,258,560  
Total liabilities     16,690,334       (13,248,000 )    
-
       3,442,334  
Ordinary shares subject to possible redemption     26,405,954      
-
       20,514,046       46,920,000  
Ordinary shares     3,465      
-
     (2,011 )     1,454  
Additional paid-in capital     5,184,021       13,248,000       (18,433,320 )    
-
  
Accumulated deficit     (187,479 )    
-
       (2,080,014 )     (2,267,493 )
Total shareholders’ equity (deficit)     5,000,007       13,248,000       (20,514,046 )     (2,266,039 )
                                 
Balance sheet as of June 30, 2021 (unaudited)                                
Ordinary shares subject to possible redemption     39,489,087      
-
       7,430,913       46,920,000  
Ordinary shares     2,183      
-
       (729 )     1,454  
Additional paid-in capital     5,350,170      
-
       (5,350,170 )    
-
  
Accumulated deficit     (352,344 )    
-
       (2,080,014 )     (2,432,358 )
Total shareholders’ equity (deficit)     5,000,009      
-
       (7,430,913 )     (2,430,904 )
                                 
Statement of operations for the three months ended June 30, 2021 (unaudited)                                
Basic and diluted weighted average shares outstanding, ordinary stock subject to possible redemption    
-
      
-
       4,145,055       4,145,055  
Basic and diluted income per share, ordinary share subject to possible redemption    
-
      
-
       0.27       0.27  
Basic and diluted weighted average shares outstanding, Non-redeemable ordinary shares     2,065,838      
-
       (641,904 )     1,423,934  
Basic and diluted net loss per share, non-redeemable ordinary shares     (0.12 )    
-
       (0.82 )     (0.94 )
                                 
Statement of Operations for the six months ended June 30, 2021 (unaudited)                                
Basic and diluted weighted average shares outstanding, ordinary stock subject to possible redemption    
-
      
-
       2,083,978       2,083,978  
Basic and diluted net (loss) income per share, ordinary share subject to possible redemption    
-
      
-
       0.82       0.82  
Basic and diluted weighted average shares outstanding, Non-redeemable ordinary shares     1,610,449      
-
       (322,725 )     1,287,724  
Basic and diluted net loss per share, non-redeemable ordinary shares     (0.21 )    
-
       (1.38 )     (1.59 )
                                 
Statement of Cash Flows for the six months ended June 30, 2021 (unaudited)                                
Initial classification of shares subject to conversion     39,653,959      
-
       5,138,404       44,792,363  
Change in value of shares subject to conversion     (164,872 )    
-
       164,872      
-
  
Allocation of offering costs to common stock subject to redemption    
-
      
-
       2,887,160       2,887,160  
Accretion of carrying value to redemption value    
-
      
-
       (5,014,797 )     (5,014,797 )
                                 
Statement of Changes In Shareholders’ Deficit for the three months ended June 30, 2021 (unaudited)                                
Initial classification of shares subject to conversion – ordinary shares – no. of shares     (3,887,643 )    
-
       (712,357 )     (4,600,000 )
Initial classification of shares subject to conversion – ordinary shares – amount     (3,888 )    
-
       (712 )     (4,600 )
Initial classification of shares subject to conversion – additional paid-in capital     (39,650,071 )    
-
       (5,137,692 )     (44,787,763 )
Initial classification of shares subject to conversion – total shareholder’s deficit     (39,653,959 )    
-
       (5,138,404 )     (44,792,363 )
Allocation of offering costs to common stock subject to redemption     2,887,160      
-
       2,887,160       2,887,160  
Accretion of carrying value to redemption value     (2,934,783 )    
-
       (2,934,783 )     (2,934,783 )
                                 
Statement of Changes In Shareholders’ Deficit for the six months ended June 30, 2021 (unaudited)                                
Initial classification of shares subject to conversion – ordinary shares – no. of shares     (3,887,643 )    
-
       (712,357 )     (4,600,000 )
Initial classification of shares subject to conversion – ordinary shares – amount     (3,888 )    
-
       (712 )     (4,600 )
Initial classification of shares subject to conversion – additional paid-in capital     (39,650,071 )    
-
       (5,137,692 )     (44,787,763 )
Initial classification of shares subject to conversion – total shareholder’s deficit     (39,653,959 )    
-
       (5,138,404 )     (44,792,363 )
Allocation of offering costs to common stock subject to redemption     2,887,160      
-
       2,887,160       2,887,160  
Accretion of carrying value to redemption value     (2,934,783 )    
-
       (2,934,783 )     (2,934,783 )