Registration statement for securities of certain foreign private issuers

Restatement of Previously Issued Financial Statements

v3.21.2
Restatement of Previously Issued Financial Statements
 12 Months Ended
Dec. 31, 2020
Collective Growth Corp [Member]  
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
Restatement of Previously Issued Financial Statements
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The Company previously accounted for its outstanding Public Warrants (as defined in Note 9) and Private Warrants (collectively, with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In Addition, the warrant agreement includes a provision that in the event of a tender offer or exchange offer made to and accepted by holders of more than
50% of the outstanding shares of a single class of stock, all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).
On April 12, 2021, the staff of the Division of Corporation Finance of the Securities and Exchange Commission 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 settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement, dated as of November 5, 2020, between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agreement”).
In further consideration of the SEC Statement, the Company’s management further 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. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s common stock 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, based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the tender offer provision fails the “classified in stockholders’ equity” criteria as contemplated by ASC
Section 815-40-25.
As a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period as well as
re-evaluate
the treatment of the warrants (including on May 5, 2020, June 30, 2020, September 30, 2020, and December 31, 2020) and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.
The Company’s accounting for the Warrants as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported cash or investments held in the trust account.
 
    
As
Previously
Reported
    
Adjustments
    
As
Restated
  
Balance sheet as of May 5, 2020 (audited)
                         
Warrant Liability
    $ —       $ 15,521,438     $ 15,521,438  
Class A Common Stock Subject to Possible Redemption
      140,786,390       (15,521,438 )      125,264,952  
Class A Common Stock
      118       155       273  
Additional
Paid-in
Capital
      5,000,764       2,365,738       7,366,502  
Accumulated Deficit
      (1,310 )      (2,365,893 )      (2,367,203 ) 
Stockholders’ Equity
      5,000,003       —         5,000,003  
Common Stock Subject to Possible Redemption
      14,078,639       (1,552,144 )      12,526,495  
Balance sheet as of June 30, 2020
                         
Warrant Liability
    $ —       $ 8,609,063     $ 8,609,063  
Class A Common Stock Subject to Possible Redemption
      140,523,230       (8,609,063 )      131,914,167  
Class A Common Stock
      121       86       207  
Additional
Paid-in
Capital
      5,263,977       (4,546,568 )      717,409  
(Accumulated Deficit) Retained Earnings
      (264,465 )      4,546,482       4,282,017  
Stockholders’ Equity
      5,000,008       —         5,000,008  
Common Stock Subject to Possible Redemption
      14,052,323       (860,906 )      13,191,417  
       
Balance sheet as of September 30, 2020
                         
Warrant Liability
    $ —       $ 7,363,688     $ 7,363,688  
Class A Common Stock Subject to Possible Redemption
      140,191,390       (7,363,688 )      132,827,702  
Class A Common Stock
      124       74       198  
Additional
Paid-in
Capital
      5,595,814       (5,595,814 )      —    
(Accumulated Deficit) Retained Earnings
      (596,312 )      5,595,740       4,999,428  
Stockholders’ Equity
      5,000,001       —         5,000,001  
Common Stock Subject to Possible Redemption
      14,019,139       (736,369 )      13,282,770  
       
Balance sheet as of December 31, 2020 (audited)
                         
Warrant Liability
    $ —       $ 41,975,813     $ 41,975,813  
Class A Common Stock Subject to Possible Redemption
      139,752,810       (41,975,810 )      97,777,000  
Class A Common Stock
      129       420       549  
Additional
Paid-in
Capital
      6,034,389       28,819,845       34,854,235  
Accumulated Deficit
      (1,034,883 )      (28,820,268 )      (29,855,151 ) 
Stockholders’ Equity
      5,000,010       (3 )      5,000,007  
Common Stock Subject to Possible Redemption
      13,975,281       (4,197,581 )      9,777,700  
       
Statement of Operations for the Six Months Ended June 30, 2020 (audited)
                         
Change in fair value of warrant liability
    $ —       $ 6,912,375     $ 6,912,375  
Transaction costs associated with Initial Public Offering
      —         (700,705 )      (700,705 ) 
Compensation expense related to warrant liabilities
      —         (1,665,188 )      (1,665,188 ) 
Net (loss) income
      (264,117 )      4,546,482       4,282,365  
Weighted average shares outstanding, Common Stock
      4,114,265       292,500       4,406,765  
Basic and diluted net loss per share, Common Stock
      (0.06 )      1.03       0.97  
       
Statement of Operations for the Nine Months Ended September 30, 2020 (audited)
                         
Change in fair value of warrant liability
    $ —       $ 8,157,750     $ 8,157,750  
Transaction costs associated with Initial Public Offering
      —         (700,705 )      (700,705 ) 
Compensation expense related to warrant liabilities
      —         (1,665,188 )      (1,665,188 ) 
Net (loss) income
      (595,964 )      5,791,857       5,195,893  
Weighted average shares outstanding, Common Stock
      4,398,294       483,351       4,881,645  
Basic and diluted net loss per share, Common Stock
      (0.14 )      1.20       1.06  
Statement of Operations for the Year Ended December 31, 2020 (audited)
                         
Change in fair value of warrant liability
    $ —       $ (26,454,375 )    $ (26,454,375 ) 
Transaction costs associated with Initial Public Offering
      —         (700,705 )      (700,705 ) 
Compensation expense related to warrant liabilities
      —         (1,665,188 )      (1,665,188 ) 
Net loss
      (1,034,535 )      (28,820,268 )      (29,854,803 ) 
Weighted average shares outstanding, Class A Common Stock subject to possible redemption
      14,045,743       (834,101 )      13,211,642  
Basic and diluted net income per share, Class A Common Stock subject to possible redemption
      0.00       —         0.00  
Weighted average shares outstanding, Common Stock
      4,547,874       546,951       5,094,825  
Basic and diluted net loss per share, Common Stock
      (0.23 )      (5.63 )      (5.86 ) 
       
Cash Flow Statement for the Six Months Ended June 30, 2020 (audited)
                         
Net (loss) income
    $ (264,117 )    $ 4,546,482     $ 4,282,365  
Change in fair value of warrant liability
      —         (6,912,375 )      (6,912,375 ) 
Transaction costs associated with Initial Public Offering
      —         700,705       700,705  
Compensation expense related to warrant liabilities
      —         1,665,188       1,665,188  
Initial classification of Class A Common Stock subject to possible redemption
      140,786,390       (9,506,250 )      131,280,140  
Change in value of Class A Common Stock subject to possible redemption
      (263,160 )      897,187       634,027  
       
Cash Flow Statement for the Nine Months Ended September 30, 2020 (audited)
                         
Net (loss) income
    $ (595,964 )    $ 5,791,857     $ 5,195,893  
Change in fair value of warrant liability
      —         (8,157,750 )      (8,157,750 ) 
Transaction costs associated with Initial Public Offering
      —         700,705       700,705  
Compensation expense related to warrant liabilities
      —         1,665,188       1,665,188  
Initial classification of Class A Common Stock subject to possible redemption
      140,786,390       (9,506,250 )      131,280,140  
Change in value of Class A Common Stock subject to possible redemption
      (595,000 )      2,142,562       1,547,562  
       
Cash Flow Statement for the Year Ended December 31, 2020 (audited)
                         
Net loss
    $ (1,034,535 )    $ (28,820,268 )    $ (29,854,803 ) 
Change in fair value of warrant liability
      —         26,454,375       26,454,375  
Transaction costs associated with Initial Public Offering
      —         700,705       700,705  
Compensation expense related to warrant liabilities
      —         1,665,188       1,665,188  
Initial classification of Class A Common Stock subject to possible redemption
      140,786,390       (9,506,250 )      131,280,140  
Change in value of Class A Common Stock subject to possible redemption
      (1,033,580 )      (32,469,560 )      (33,503,140 )