MSP Recovery, Inc. 10-K/A

ITEM 8. Financial Statements and Supplementary Data LIONHEART ACQUISITION CORPORATION II INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-2 Financial Statements: Balance Sheets (as restated) F-3 Statements of Operations (as restated) F-4 Statements of Changes in Stockholders’ Equity (Deficit) (as restated) F-5 Statements of Cash Flows (as restated) F-6 Notes to Financial Statements F-7 to F-23 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Lionheart Acquisition Corporation II Opinion on the Financial Statements We have audited the accompanying balance sheets of Lionheart Acquisition Corporation II (the “Company”) as of December 31, 2020 and 2019, the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for year ended December 31, 2020 and for the period from December 23, 2019 (inception) through December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the year ended December 31, 2020 and for the period from December 23, 2019 (inception) through December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. Restatement of Financial Statements As discussed in Note 2 to the financial statements, the accompanying financial statements as of December 31, 2020 and the year then ended have been restated. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2020 . Houston, Texas March 31, 2021, except for the effects of Amendment #1 related to the reclassification of warrants discussed in Notes 2 and 11, as to which the date is May 19, 2021, and except for the effects of Amendment #2 related to the reclassification of Class A shares to temporary equity discussed in Note 2 as to which the date is December 6, 2021. F- 2 LIONHEART ACQUISITION CORPORATION II BALANCE SHEETS December 31, 2020 2019 (As Restated) ASSETS Current Assets Cash $ 1,017,137 $ — Prepaid expenses 124,766 — Total Current Assets 1,141,903 — Deferred offering costs — 26,171 Marketable securities held in Trust Account 230,011,254 — TOTAL ASSETS $ 231,153,157 $ 26,171 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities Accrued expenses $ 1,163,558 $ 1,000 Accrued offering costs 5,450 26,171 Total Current Liabilities 1,169,008 27,171 Warrant liability 13,365,500 — Deferred underwriting fee payable 8,050,000 — Total Liabilities 22,584,508 27,171 Commitments and Contingencies (Note 7) Class A common stock subject to possible redemption, 23,000,000 and no shares at redemption value as of December 31, 2020 and 2019, respectively 230,000,000 — Stockholders’ Equity (Deficit) Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding — — Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 650,000 and no shares issued and outstanding (excluding 23,000,000 and no shares subject to possible redemption) as of December 31, 2020 and 2019, respectively 65 — Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 5,750,000 and no shares issued and outstanding as of December 31, 2020 and 2019 575 — Additional paid-in capital — — Accumulated deficit (21,431,991 ) (1,000 ) Total Stockholders’ Equity (Deficit) (21,431,351 ) (1,000 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 231,153,157 $ 26,171 The accompanying notes are an integral part of the financial statements. F- 3 LIONHEART ACQUISITION CORPORATION II STATEMENTS OF OPERATIONS Year Ended December 31, For the Period from December 23, 2019 (Inception) Through December 31, 2020 2019 (As Restated) Operating costs $ 1,472,168 $ 1,000 Loss from operations (1,472,168 ) (1,000 ) Other income (expenses): Change in fair value of warrant liability 236,500 $ — Transaction costs (837,355 ) Interest earned on marketable securities held in Trust Account 11,254 Other income (expenses), net (589,601 ) (1,000 ) Net loss $ (2,061,769 ) $ (1,000 ) Basic and diluted weighted average shares outstanding, Class A common stock 8,674,180 — Basic and diluted net loss per share, Class A common stock $ (0.15 ) $ 0.00 Basic and diluted weighted average shares outstanding, Class B common stock 5,127,732 — Basic and diluted net loss per share, Class B common stock $ (0.15 ) $ (0.00 ) The accompanying notes are an integral part of the financial statements . F- 4 LIONHEART ACQUISITION CORPORATION II STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) Class A Common Stock Class B Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance – December 23, 2019 (inception) — $ — — $ — $ — $ — $ — Net loss — — — — — (1,000 ) (1,000 ) Balance – December 31, 2019 — $ — — $ — $ — $ (1,000 ) $ (1,000 ) Issuance of Class B common stock to Sponsor — — 5,750,000 575 24,425 — 25,000 Sale of 650,000 Private Placement Units 650,000 65 — — 6,123,809 — 6,123,874 Accretion to common stock subject to redemption amount — — — — (6,148,234 ) (19,369,222 ) (25,517,456 ) Net loss — — — — — (2,061,769 ) (2,061,769 ) Balance – December 31, 2020 (As Restated) 650,000 $ 65 5,750,000 $ 575 $ — $ (21,431,991 ) $ (21,431,351 ) The accompanying notes are an integral part of the financial statements. F- 5 LIONHEART ACQUISITION CORPORATION II STATEMENTS OF CASH FLOWS Year Ended December 31, For the Period from December 23, 2019 (Inception) Through December 31, 2020 2019 (As Restated) Cash Flows from Operating Activities: Net loss $ (2,061,769 ) $ (1,000 ) Adjustments to reconcile net loss to net cash used in operating activities: Change in fair value of warrants (236,500 ) — Transaction costs 837,355 — Interest earned on marketable securities held in Trust Account (11,254 ) — Changes in operating assets and liabilities: Prepaid expenses (124,766 ) — Accrued expenses 1,162,558 1,000 Net cash used in operating activities (434,376 ) — Cash Flows from Investing Activities: Investment of cash into Trust Account (230,000,000 ) — Net cash used in investing activities (230,000,000 ) — Cash Flows from Financing Activities: Proceeds from issuance of Class B common stock to Sponsor 25,000 — Proceeds from sale of Units, net of underwriting discounts paid 225,400,000 — Proceeds from sale of Private Placement Units 6,500,000 — Proceeds from promissory notes – related party 140,671 — Repayment of promissory notes – related party (140,671 ) — Payment of offering costs (473,487 ) — Net cash provided by financing activities 231,451,513 — Net Change in Cash 1,017,137 — Cash – Beginning — — Cash – Ending $ 1,017,137 $ — Non-cash investing and financing activities: Initial classification of common stock subject to redemption $ 230,000,000 $ — Deferred underwriting fee payable $ 8,050,000 $ — Offering costs included in accrued offering costs 5,450 26,171 The accompanying notes are an integral part of the financial statements. F- 6 NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Lionheart Acquisition Corporation II (formerly known as Lionheart Acquisition Corp.) (the “Company”) was incorporated in Delaware on December 23, 2019. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on businesses that apply innovative digital technologies and technology-enhanced services and solutions to the identification, design, development, construction, operation, financing, management and disposition of real estate properties, commonly referred to as “PropTech.” The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2020, the Company had not commenced any operations. All activity for the period from December 23, 2019 (inception) through December 31, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on August 12, 2020. On August 18, 2020, the Company consummated the Initial Public Offering of 20,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $200,000,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 650,000 units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to Lionheart Equities, LLC, a Delaware Limited Liability Company (the “Sponsor”), and Nomura Securities International, Inc. (“Nomura”), an underwriter in the Initial Public Offering, generating gross proceeds of $6,500,000, which is described in Note 5. Following the closing of the Initial Public Offering on August 18, 2020, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”) located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account, as described below. On August 20, 2020, the underwriters notified the Company of their intention to exercise their over-allotment option in full, resulting in an additional 3,000,000 Units issued on August 24, 2020 for $30,000,000. A total of $30,000,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $230,000,000. Transaction costs amounted to $13,128,937 consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $478,937 of other offering costs. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. F- 7 The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to public stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transactions is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor, officers and directors and Nomura have agreed to vote their Founder Shares (as defined in Note 6), Private Placement Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder’s Shares, Private Placement Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect the substance or timing of the ability of holders of the Public Shares to seek redemption in connection with a Business Combination or the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. F- 8 The Company will have until February 18, 2022 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. The Sponsor and Nomura have agreed to waive their liquidation rights with respect to the Private Placement Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders or any of their respective affiliates acquire Public Shares after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity and Capital Resources At December 31, 2020, the Company had cash outside the trust of $1,017,137 and working capital of $50,240. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. On February 21, 2021, the Sponsor committed up to $750,000 in loans to the Company for continuing operations to consummate a business combination. The loans are non-interest bearing, unsecured, and to be repaid upon the consummation of a business combination. In the event that a business combination does not occur, then all loaned amounts under this commitment will be forgiven except to the extent that the Company has funds available to it outside the trust account. In addition, the Sponsor, an affiliate of the Sponsor, or our officers and directors may, but are not obligated to, loan us funds as may be required (see Note 6 Related Party Loans). The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. F- 9 NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS Amendment #1 The Company previously accounted for its outstanding Public Warrants (as defined in Note 4) and Private Placement 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 Acting Director of the Division of Corporation Finance and Acting Chief Accountant 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 (the “Warrant Agreement”). Additionally, the Company revised the Statement of Changes in Stockholders’ Equity to present temporary equity separate from permanent equity, which allows for better alignment to the presentation of the Company’s Balance Sheets. 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 August 18, 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 investments held in trust, operating expenses, cash flows or cash. As As Restated Previously Per Amendment Reported Adjustments #1 Balance sheet as of August 18, 2020 Warrant liability $ - $ 13,602,000 $ 13,602,000 Total Liabilities 7,176,121 13,602,000 20,778,121 Class A Common Stock Subject to Possible Redemption 190,045,060 (13,602,000 ) 176,443,060 Class A Common Stock 165 136 301 Additional Paid-in Capital 5,000,263 837,220 5,837,483 Accumulated Deficit (1,000 ) (837,356 ) (838,356 ) 5,000,003 - 5,000,003 Number of Class A common stock subject to redemption 19,004,506 (1,360,200 ) 17,644,306 Balance sheet as of September 30, 2020 (unaudited) Warrant liability $ - $ 13,135,500 $ 13,135,500 Total Liabilities 8,126,283 13,135,500 21,261,783 Class A Common Stock Subject to Possible Redemption 218,312,810 (13,135,500 ) 205,177,310 Class A Common Stock 182 131 313 Additional Paid-in Capital 5,082,496 370,725 5,453,221 Accumulated Deficit (83,243 ) (370,856 ) (454,099 ) 5,000,010 - 5,000,010 Number of Class A common stock subject to redemption 21,831,281 (1,313,550 ) 20,517,731 Balance sheet as of December 31, 2020 Warrant liability $ - $ 13,365,500 $ 13,365,500 Total Liabilities 9,219,008 13,365,500 22,584,508 Class A Common Stock Subject to Possible Redemption 216,934,140 (13,365,500 ) 203,568,640 Class A Common Stock 196 133 329 Additional Paid-in Capital 6,461,152 600,722 7,061,874 F- 10 Accumulated Deficit (1,461,914 ) (600,855 ) (2,062,769 ) 5,000,009 - 5,000,009 Number of Class A common stock subject to redemption 21,693,414 (1,336,550 ) 20,356,864 Statement of Operations for the Three months ended September 30, 2020 (unaudited) Change in fair value of warrant liability - 466,499 466,499 Transaction costs - (837,355 ) (837,355 ) Net loss $ (82,243 ) $ (370,856 ) $ (453,099 ) Basic and diluted weighted average shares outstanding, common stock subject to possible redemption - 18,952,768 18,952,768 Basic and diluted net earnings per share, common stock subject to possible redemption 0.00 - 0.00 Weighted average non-redeemable common shares outstanding, basic and diluted 5,952,197 (2,577,316 ) 3,374,881 Basic and diluted net loss per non-redeemable common share $ (0.02 ) 0.02 0.00 Statement of Operations for the Nine months ended September 30, 2020 (unaudited) Change in fair value of warrant liability - 466,499 466,499 Transaction costs - (837,355 ) (837,355 ) Net loss $ (82,243 ) $ (370,856 ) $ (453,099 ) Basic and diluted weighted average shares outstanding, common stock subject to possible redemption 15,112,852 3,839,915 18,952,768 Basic and diluted net earnings per share, common stock subject to possible redemption 0.00 - 0.00 Weighted average non-redeemable common shares outstanding, basic and diluted 3,895,358 (470,933 ) 3,424,425 Basic and diluted net loss per non-redeemable common share (0.02 ) 0.02 0.00 Statement of Operations for the Year ended December 31, 2020 Change in fair value of warrant liability - 236,500 236,500 Transaction costs - (837,355 ) (837,355 ) Net loss $ (1,460,914 ) $ (600,855 ) $ (2,061,769 ) Basic and diluted weighted average shares outstanding, common stock subject to possible redemption 16,131,141 4,192,832 20,323,974 Basic and diluted net earnings per share, common stock subject to possible redemption 0.00 - 0.00 Weighted average non-redeemable common shares outstanding, basic and diluted 4,542,198 (2,223,472 ) 2,318,726 Basic and diluted net loss per non-redeemable common share $ (0.32 ) (0.57 ) (0.89 ) Cash Flow Statement for the Nine months ended September 30, 2020 (unaudited) Net loss $ (82,243 ) $ (370,856 ) $ (453,099 ) Allocation of initial public offering costs - 837,356 837,356 Initial classification of warrant liability - 13,602,000 13,602,000 Initial classification of common stock subject to possible redemption 218,395,060 (13,602,000 ) 204,793,060 Change in value of common stock subject to possible redemption (82,250 ) 466,500 384,250 Cash Flow Statement for the Year ended December 31, 2020 (audited) Net loss $ (1,460,914 ) $ (600,856 ) $ (2,061,770 ) Allocation of initial public offering costs - 837,356 837,356 Initial classification of warrant liability - 13,602,000 13,602,000 Initial classification of common stock subject to possible redemption 218,395,060 (13,602,000 ) 204,793,060 Change in value of common stock subject to possible redemption (1,460,920 ) 236,500 (1,224,420 ) F- 11 Amendment #2 In connection with the preparation of the Company’s financial statements as of September 30, 2021, management identified errors made in its historical financial statements where, at the closing of the Company’s Initial Public Offering, the Company improperly valued its Class A common stock subject to possible redemption. The Company previously determined the Class A common stock subject to possible redemption to be equal to the redemption value of $10.00 per share of Class A common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A common stock issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all shares of Class A common stock subject to possible redemption, resulting in the Class A common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification error related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A common stock. In connection with the change in presentation for the Class A common stock subject to redemption, the Company also restated its income (loss) per common stock calculated to allocate net income (loss) evenly to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stock pro rata in the income (loss) of the Company. There is no impact to the reported amounts for total assets, total liabilities, cash flows, or net income (loss). The impact of the restatement on the Company’s financial statements is reflected in the following table. As Reported As Restated Per Amendment #1 Adjustment Per Amendment #2 Balance Sheet as of August 18, 2020 Class A common stock subject to possible redemption $ 176,443,060 $ 23,556,940 $ 200,000,000 Class A common stock $ 301 $ (236 ) $ 65 Additional paid-in capital $ 5,837,483 $ (5,837,483 ) $ — Accumulated deficit $ (838,356 ) $ (17,719,221 ) $ (18,557,577 ) Total Stockholders' Equity (Deficit) $ 5,000,003 $ (23,556,940 ) $ (18,556,937 ) Balance Sheet as of September 30, 2020 (unaudited) Class A common stock subject to possible redemption $ 205,177,310 $ 24,822,690 $ 230,000,000 Class A common stock $ 313 $ (248 ) $ 65 Additional paid-in capital $ 5,453,221 $ (5,453,221 ) $ — Accumulated deficit $ (454,099 ) $ (19,369,221 ) $ (19,823,320 ) Total Stockholders' Equity (Deficit) $ 5,000,010 $ (24,822,690 ) $ (19,822,680 ) Balance Sheet as of December 31, 2020 Class A common stock subject to possible redemption $ 203,568,640 $ 26,431,360 $ 230,000,000 Class A common stock $ 329 $ (264 ) $ 65 Additional paid-in capital $ 7,061,874 $ (7,061,874 ) $ — Accumulated deficit $ (2,062,769 ) $ (19,369,222 ) $ (21,431,991 ) Total Stockholders’ Equity (Deficit) $ 5,000,009 $ (26,431,360 ) $ (21,431,351 ) Statement of Operations for the Three Months Ended September 30, 2020 (unaudited) Basic and diluted weighted average shares outstanding, Class A Common Stock 18,952,768 (8,094,616 ) 10,858,152 Basic and diluted net (loss) per share, Class A $ — $ (0.03 ) $ (0.03 ) Basic and diluted weighted average shares outstanding, Class B Common Stock 3,374,881 (1,926,749 ) 5,301,630 Basic and diluted net (loss) per share, Class B Common Stock $ — $ (0.03 ) $ (0.03 ) Statement of Operations for the Nine Months Ended September 30, 2020 (unaudited) Basic and diluted weighted average shares outstanding, Class A Common Stock 18,952,768 (15,306,965 ) 3,645,803 Basic and diluted net (loss) per share, Class A $ — $ (0.05 ) $ (0.05 ) Basic and diluted weighted average shares outstanding, Class B Common Stock 3,424,425 1,494,371 4,918,796 Basic and diluted net (loss) per share, Class B Common Stock $ — $ (0.05 ) $ (0.05 ) Statement of Operations for the Year Ended December 31, 2020 Basic and diluted weighted average shares outstanding, Class A Common Stock 20,323,974 (11,649,794 ) 8,674,180 Basic and diluted net (loss) per share, Class A $ — $ (0.15 ) $ (0.15 ) Basic and diluted weighted average shares outstanding, Class B Common Stock 2,318,726 2,809,006 5,127,732 Basic and diluted net (loss) per share, Class B Common Stock $ (0.89 ) $ 0.74 $ (0.15 ) Statement of Cash Flows for the Nine Months Ended September 30, 2020 (unaudited) Initial classification of Class A common stock subject to possible redemption $ 204,793,060 $ 25,206,940 $ 230,000,000 Change in value of Class A common stock subject to possible redemption $ 384,250 $ (384,250 ) $ — Statement of Cash Flows for the Year Ended December 31, 2020 Initial classification of Class A common stock subject to possible redemption $ 204,793,060 $ 25,206,940 $ 230,000,000 Change in value of Class A common stock subject to possible redemption $ (1,224,420 ) $ 1,224,420 $ — Statement of Changes in Stockholders' Equity (Deficit) for the Period Ended September 30, 2020 (unaudited) Sale of 23,000,000 Units, net of underwriting discounts $ 204,482,544 $ (204,482,544 ) $ — Class A common stock subject to possible redemption $ (205,177,310 ) $ 205,177,310 $ — Accretion to common stock subject to redemption amount $ — $ (25,517,456 ) $ (25,517,456 ) Total Stockholders' Equity 5,000,010 (24,822,690 ) (19,822,680 ) Statement of Changes in Stockholders' Equity (Deficit) for the Year Ended December 30, 2020 Change in value of common stock subject to redemption $ 1,608,670 $ (1,608,670 ) $ — Sale of 23,000,000 Units, net of underwriting discounts $ 204,482,544 $ (204,482,544 ) $ — Class A common stock subject to possible redemption $ (205,177,310 ) $ 205,177,310 $ — Accretion to common stock subject to redemption amount $ — $ (25,517,456 ) $ (25,517,456 ) Total Stockholders' Equity $ 5,000,009 $ (26,431,360 ) $ (21,431,351 ) F- 12 NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements is presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020 and December 31, 2019. Marketable Securities Held in Trust Account At December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury Securities. F- 13 Class A Common Stock Subject to Possible Redemption (Restated – See Note 2 – Amendment #2) The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Class A common stock subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock is classified as shareholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2020, Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed consolidated balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A common stock resulted in charges against additional paid-in capital and accumulated deficit. At December 31, 2020, the Class A common stock reflected in the condensed consolidated balance sheet are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants $ (13,225,000 ) Class A common stock issuance costs $ (12,292,456 ) Plus: Accretion of carrying value to redemption value $ 25,517,456 Class A common stock subject to possible redemption $ 230,000,000 Warrant Liability The Company accounts for the Warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at the end of each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The Private Warrants and the Public Warrants for periods where no observable traded price was available are valued using a Monte Carlo simulation. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. On March 27, 2020, the CARES Act was enacted in response to COVID-19 pandemic. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period which the new legislation is enacted. The CARES Act made various tax law changes including among other things (i) increasing the limitation under Section 163(j) of the Internal Revenue Code of 1986, as amended (the “IRC”) for 2019 and 2020 to permit additional expensing of interest (ii) enacting a technical correction so that qualified improvement property can be immediately expensed under IRC Section 168(k), (iii) making modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to the five preceding taxable years in order to generate a refund of previously paid income taxes and (iv) enhancing the recoverability of alternative minimum tax credits. Net Loss Per Common Share (Restated – See Note 2 – Amendment #1) Net income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 11,825,000 shares in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. F- 14 The Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for Common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Common stock subject to possible redemption outstanding since original issuance. Net loss per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net loss, adjusted for income or loss on marketable securities attributable to Common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period. Non-redeemable common stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the income or loss on marketable securities based on non-redeemable common stock shares’ proportionate interest. Year ended December 31, 2020 For the Period from December 23, 2019 (Inception) through December 31, 2019 (As Restated) Common stock subject to possible redemption Numerator: Earnings allocable to Common stock subject to possible redemption Interest earned on marketable securities held in Trust Account Less: Income taxes and franchise fees $ (11,254 ) $ — Net loss allocable to shares subject to possible redemption $ — $ — Denominator: Weighted Average Common stock subject to possible redemption Basic and diluted weighted average shares outstanding 21,833,901 — Basic and diluted net income per share $ 0.00 $ — Non-Redeemable Common Stock Numerator: Net Loss minus Net Earnings Net loss $ (2,061,769 ) $ (1,000 ) Net loss allocable to Common stock subject to possible redemption — — Non-Redeemable Net Loss $ (2,061,769 ) $ (1,000 ) Denominator: Weighted Average Non-Redeemable Common Stock Basic and diluted weighted average shares outstanding $ 2,318,726 — Basic and diluted net loss per share $ (0.89 ) $ (0.00 ) Net Income (Loss) Per Common Share (Restated – See Note 2 – Amendment #2) The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common stock is computed by dividing net income (loss) by the weighted average number of common stocks outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stocks is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 11,825,000 Class A common stocks in the aggregate. As of December 31, 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net loss per common stock is the same as basic net loss per common stock for the periods presented. The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts): For the Year Ended December 31, 2020 Class A Class B Basic and diluted net income (loss) per common stock Numerator: Allocation of net income (loss), as adjusted $ (1,295,774 ) $ (765,995 ) Denominator: Basic and diluted weighted average stock outstanding 8,674,180 5,127,732 Basic and diluted net income (loss) per common stock $ (0.15 ) $ (0.15 ) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account. F- 15 Fair value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: · Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; · Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and · Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards update, if currently adopted, would have a material effect on the Company’s financial statements. NOTE 4. INITIAL PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 23,000,000 Units, inclusive of 3,000,000 Units sold to the underwriters on August 24, 2020 upon the underwriters’ election to fully exercise their option to purchase additional Units, at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 9). NOTE 5. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor and Nomura purchased an aggregate of 650,000 Private Placement Units at a price of $10.00 per Private Placement Unit, for an aggregate purchase price of $6,500,000. Each Private Placement Unit consists of one share of Class A common stock (“Private Placement Share”) and one-half of one redeemable warrant (“Private Placement Warrant”). Each whole Private Placement Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 9). A portion of the proceeds from the Private Placement Units were added to the proceeds from the Initial Public Offering held in the Trust Account. The Private Placement Units are identical to the Public Units sold in the Initial Public Offering, except as described in Note 9. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and underlying securities will be worthless. NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares On January 10, 2020, the Sponsor purchased 5,000,000 shares (the “Founder’s Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. Subsequently, on February 6, 2020, the Company effected a stock dividend of 0.15 share for each Founder’s Share outstanding, resulting in the Sponsor holding an aggregate of 5,750,000 Founder’s Shares. All share and per-share amounts have been retroactively restated to reflect the stock dividend. The Founder’s Shares included an aggregate of up to 750,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the initial stockholders (including Nomura) would own, on an as-converted basis, 22.03% of the Company’s issued and outstanding shares after the Initial Public Offering (including the Private Placement Shares and assuming the initial stockholders do not purchase any Public Shares in the Initial Public Offering). As a result of the underwriters’ election to exercise their over-allotment option in full on August 24, 2020, the 750,000 Founder’s Shares are no longer subject to forfeiture. F- 16 The initial stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder’s Shares until the earlier to occur of: (A) six months after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 30 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On January 10, 2020, the Company issued the Promissory Note to Lionheart Equities, LLC, the Sponsor, pursuant to which the Company could borrow up to an aggregate amount of $300,000 to cover expenses related to the Initial Public Offering. The Promissory Note was non-interest bearing and payable on the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $140,671 was repaid on August 24, 2020. Administrative Services Agreement The Company entered into an agreement whereby, commencing on the August 14, 2020, the Company will pay the Sponsor a total of $15,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2020, the Company incurred and paid $66,774 in fees for these services. Related Party Loans In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1 million of such Working Capital Loans may be convertible into units identical to the Private Placement Units at a price of $10.00 per unit. NOTE 7. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on August 13, 2020, the holders of the Founder’s Shares, Private Placement Units, Private Placement Shares, Private Placement Warrants, securities issuable pursuant to the forward purchase agreement (discussed below), the units that may be issued upon conversion of Working Capital Loans, the shares of Class A common stock and the warrants issued as part of such units (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants included as part of the units that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder’s Shares) will be entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder’s Shares, only after conversion to the Company’s Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. F- 17 Underwriting Agreement The underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Forward Purchase Agreement Nomura entered into a forward purchase agreement with the Company, which provides for the purchase by Nomura of the Company’s Public Shares for an aggregate purchase price of up to $100.0 million through, other than as described below, open market purchases or privately negotiated transactions with one or more third parties. In lieu of purchasing Public Shares in the open market or privately negotiated transactions, up to $85.0 million of such aggregate purchase price may instead be in the form of an investment in the Company’s equity securities on terms to be mutually agreed between Nomura and the Company, to occur concurrently with the closing of a Business Combination. In consideration of the forward purchase commitment, the Company will pay to Nomura (i) an amount equal to 2% of the aggregate purchase price of the purchases or investment requested by the Company pursuant to the forward purchase agreement (the “commitment fee”) plus (ii) an amount equal to the internal charges and carrying costs incurred by Nomura in connection with the forward purchase commitment (the “commitment carrying costs”) on a monthly basis during the period from and including the date the Company executes a definitive agreement for a Business Combination through the earlier of (x) the consummation of a Business Combination and (y) the date the Company notifies Nomura in writing that the Company does not require Nomura to provide the forward purchase commitment. Up to $1.0 million of aggregate commitment carrying costs, to the extent timely paid pursuant to the forward purchase agreement, may be credited against the commitment fee. If the Company requests that Nomura purchase or invest the full $100.0 million forward purchase commitment pursuant to the forward purchase agreement, a maximum of $1.0 million of the commitment carrying costs will not be credited toward the commitment fee. The decision to make such an investment in other equity securities will not reduce the aggregate purchase price. However, Nomura will be excused from its purchase obligation in connection with a specific business combination unless, within five business days following written notice delivered by the Company of its intention to enter into such Business Combination, Nomura notifies the Company that it has decided to proceed with the purchase in whole or in part. Nomura may decide not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. Nomura will also be restricted from making purchases if they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Nomura has also indicated its intent, if so requested by the Company, to use its commercially reasonable efforts to underwrite, arrange and/or syndicate up to $400 million of additional financing for the Company in the form of equity or debt (or a combination thereof) in connection with a Business Combination, subject to market conditions and on terms and conditions satisfactory in all respects to Nomura in its sole judgment and determination. Right of First Refusal The Company has agreed that, if Nomura offers to purchase any securities under the forward purchase agreement, it will have a “right of first refusal” to act as a bookrunner on any capital markets transaction issued in order to complete a Business Combination. In addition, so long as the investor owns 5% or more of the outstanding common stock of the post-business combination company on a fully-diluted basis, the Sponsor has agreed to use its best efforts and influence on the successor company to offer the investor a bookrunner role on any capital markets transaction. Any such bookrunner role will be pursuant to a separate agreement containing terms and conditions customary for the investor and mutually agreed upon by the Company or its successor company, as applicable. Notwithstanding the foregoing, the right of first refusal will not have a duration of more than three years from the date of commencement of sales of the Initial Public Offering. F- 18 Advisory Agreement On October 16, 2020, the Company entered into an agreement with a service provider, pursuant to which the service provider will provide the Company with financial advisory services in connection with a potential acquisition (the “Acquisition”) and serve as the placement agent for the Company in connection with the sale of the Company’s equity or equity-linked securities (the “Securities”). The Company agreed to pay the service provider a cash fee of $7,350,000 as it relates to the financial advisory services, payable at the closing of such Acquisition and a cash fee equal to (i) 50% of 4.5% of the gross proceeds of the total Securities sold in the Acquisition , if there are only two advisors and (ii) 33.33% of 6% of the of the gross proceeds of the total Securities sold in the Acquisition, if there are only three advisors, however, shall not be less than 2% of the gross proceeds of the total Securities sold in the Acquisition. As of December 31, 2020, no amounts were incurred under this agreement. NOTE 8. PERMANENT EQUITY AND TEMPORARY EQUITY (Restated – See Note 2 – Amendment #2) Preferred Stock — On January 30, 2020, the Company amended Certificate of Incorporation such that the Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At December 31, 2020 and 2019, there were no shares of preferred stock issued or outstanding. The Company had no authorized, issued or outstanding shares of preferred stock. Class A Common Stock — On January 30, 2020, the Company amended its Certificate of Incorporation such that the Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At December 31, 2020 and 2019, there were 650,000 and no shares of Class A common stock issued and outstanding, excluding 23,000,000 and no shares of Class A common stock subject to possible redemption, respectively. Class B Common Stock — On January 30, 2020, the Company amended its Certificate of Incorporation such that the Company is authorized to issue 10,000,000 shares of common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. At December 31, 2020 and 2019, there were 5,750,000 and no shares of common stock issued and outstanding, respectively. Holders of Class A common stock and Class B common stock are entitled to one vote for each share. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination). F- 19 NOTE 9. WARRANT LIABILITY Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable, but in no event later than 30 days, after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of Class A common stock issuable upon exercise of the warrants and thereafter will use its reasonable best efforts to cause the same to become effective within 60 business days following the Business Combination and to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. Once the warrants become exercisable, the Company may redeem the Public Warrants: • in whole and not in part; • at a price of $0.01 per warrant; • upon not less than 30 days’ prior written notice of redemption to each warrant holder; and • if, and only if, the reported last reported sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending the third trading day prior to the date on which the Company sends the notice of redemption to each warrant holder. If the Company calls the Public Warrants for redemption for cash, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. F- 20 In addition, if the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of an initial Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder’s Shares or private placement securities held by them, as applicable, prior to such issuance) (the “Newly Issued Price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers of the Private Placement Units or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers of the Private Placement Units or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. NOTE 10 — INCOME TAX The Company’s net deferred tax assets (liability) at December 31, 2020 and 2019 are as follows: December 31, December 31, 2020 2019 Deferred tax assets (liability) Net operating loss carryforward $ 306,991 $ 210 Total deferred tax assets 306,991 210 Valuation Allowance (306,991 ) (210 ) Deferred tax assets (liability) $ — $ — The income tax provision for the year ended December 31, 2020 and for the period from December 23, 2019 (inception) through December 31, 2019 consists of the following: December 31, December 31, 2020 2019 Federal Current $ — $ — Deferred (306,781 ) (210 ) State and Local Current — — Deferred — — Change in valuation allowance 306,781 210 Income tax provision $ — $ — As of December 31, 2020 and 2019, the Company had $1,461,863 and $1,000 of U.S. federal and state net operating loss carryovers available to offset future taxable income, respectively. F- 21 In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2020, the change in the valuation allowance was $306,781. For the period from December 23, 2019 (inception) through December 31, 2019, the change in the valuation allowance was $210. A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 and 2019 is as follows: December 31, 2020 December 31, 2019 Statutory federal income tax rate 21.0 % 21.0 % State taxes, net of federal tax benefit — — Change in fair value of warrant liability -6.1 % -- Valuation allowance (14.9 ) (21.0 ) Income tax provision 0.0 % 0.0 % The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns since inception remain open to examination by the taxing authorities. NOTE 11. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. F- 22 The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2020 and 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level December 31, 2020 December 31, 2019 Assets: Marketable securities held in Trust Account 1 $ 230,011,254 $ — Liabilities: Warrant Liability – Public Warrants 1 12,995,000 Warrant Liability – Private Placement Warrants 3 370,500 The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the statement of operations. The Public and Private Warrants were initially valued using a binomial Monte Carlo simulation Model, which is considered to be a Level 3 fair value measurement. The Monte Carlo model’s primary unobservable input utilized in determining the fair value of the Private Warrants is the expected volatility of the common stock. The expected volatility as of the IPO date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own public warrant pricing. For periods subsequent to the detachment of the warrants from the Units, the close price of the public warrant price was used as the fair value as of each relevant date. The key inputs into the Monte Carlo simulation model for the Private Placement Warrants and Public Warrants were as follows at initial measurement, September 30, 2020 and December 31, 2020: Input August 13, 2020 September 30, 2020 December 31, 2020 Risk-free interest rate 0.42 % 0.38 % 0.51 % Trading days per year 252 252 252 Expected volatility 20.6 % 20.4 % 15.8 % Exercise price $ 11.50 $ 11.50 $ 11.50 Stock Price $ 9.43 $ 9.41 $ 10.08 The following table presents the changes in the fair value of warrant liabilities: Private Placement Public Warrant Liabilities Fair value as of December 23, 2019 (inception) $ — $ — $ — Initial measurement on August 18, 2020 and over-allotment on August 20, 2020 377,000 13,225,000 13,602,000 Change in valuation inputs or other assumptions (6,500 ) (230,000 ) (236,500 ) Fair value as of December 31, 2020 $ 370,500 $ 12,995,000 $ 13,365,500 For the period ending December 31, 2020, a total of $13,255,000 was transferred out of Level 3 to Level 1. NOTE 12. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, other than described below and in Note 2, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On February 21, 2021, the Sponsor committed up to $750,000 in loans to the Company for continuing operations to consummate a business combination. The loans are non-interest bearing, unsecured, and to be repaid upon the consummation of a business combination. In the event that a business combination does not occur, then all loaned amounts under this commitment will be forgiven except to the extent that the Company has funds available to it outside the trust account. F- 23 ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.