QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification Number) | ||
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-third of one redeemable warrant to purchase one share of Class A common stock |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page No. |
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1 | ||||||
Item 1. |
1 | |||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. |
19 | |||||
Item 3. |
21 | |||||
Item 4. |
21 | |||||
22 | ||||||
Item 1. |
22 | |||||
Item 1A. |
22 | |||||
Item 2. |
22 | |||||
Item 3. |
24 | |||||
Item 4. |
24 | |||||
Item 5. |
24 | |||||
Item 6. |
24 | |||||
25 |
Item 1. |
Financial Information |
June 30, 2021 |
December 31, 2020 |
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ASSETS |
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CURRENT ASSETS |
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Cash |
$ | $ | ||||||
Prepaid expenses |
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Total current assets |
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NONCURRENT ASSETS |
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Cash held in trust account |
— | |||||||
Other assets |
— | |||||||
Derivative forward purchase agreement |
— | |||||||
Total noncurrent assets |
— | |||||||
TOTAL ASSETS |
$ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILTIES |
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Accounts payable |
$ | $ | ||||||
Accrued deferred offering costs |
— | |||||||
Franchise tax payable |
— | |||||||
Note payable – related party |
— | |||||||
Total current liabilities |
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LONG-TERM LIABILTIES |
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Deferred underwriting commissions |
— | |||||||
Derivative warrant liabilities |
— | |||||||
Total liabilities |
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Commitments and Contingencies |
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Class A common stock, $ |
— | |||||||
STOCKHOLDERS’ EQUITY |
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Preferred stock, $ |
— | |||||||
Class A common stock, $ |
— | |||||||
Class B common stock, $ |
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Additional paid-in capital |
— | |||||||
Retained earnings (Accumulated deficit) |
( |
) | ||||||
Total stockholders’ equity (deficit) |
( |
) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | $ | ||||||
Three Months Ended |
Six Months Ended |
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June 30, 2021 |
June 30, 2021 |
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OPERATING EXPENSES |
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General and administrative expenses |
$ | $ | ||||||
Franchise tax expense |
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Total operating expenses |
( |
) | ( |
) | ||||
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OTHER INCOME (EXPENSE) |
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Interest income on marketable securities held in Trust Account |
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Underwriting discounts and offering costs attributed to derivative warrant liability |
— | ( |
) | |||||
Change in fair value of derivative warrant liabilities |
( |
) | ||||||
Change in fair value of derivative forward purchase agreement |
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Total other income (expense) |
( |
) | ||||||
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INCOME (LOSS) BEFORE INCOME TAX |
( |
) | ||||||
Income tax expense (benefit) |
— | |||||||
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NET INCOME (LOSS) |
$ | ( |
) | $ | ||||
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Basic and diluted weighted average shares outstanding, Redeemable Class A common stock |
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Basic and diluted net income (loss) per share, Class A common stock subject to possible redemption |
$ | $ | ||||||
Basic and diluted weighted average shares outstanding, Non-redeemable common stock |
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Basic and diluted net income (loss) per share, Non-redeemable common stock |
$ | ( |
) | $ |
Retained Earnings (Accumulated Deficit) |
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Additional Paid-in Capital |
Total Stockholders’ Equity |
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Class A Common Stock |
Class B Common Stock |
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Shares |
Amount |
Shares |
Amount |
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Balance— Jan 1, 202uary 1 |
— | $ | — | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||
Sale of units in initial public offering, net of offering costs and initial fair value of public warrants |
— | — | — | |||||||||||||||||||||||||
Forfeiture of Founder Shares |
— | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||
Initial classification of derivative forward purchase agreement |
( |
) | ( |
) | ||||||||||||||||||||||||
Initial classification of common stock subject to possible redemption |
( |
) | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||
Change in common stock subject to possible redemption |
( |
) | ( |
) | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Balance—March 31, 2021 |
$ | $ | — | $ | $ | |||||||||||||||||||||||
Change in Common Stock subject to possible redemption |
— | — | — | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance—June 30, 2021 |
$ | $ | $ | — | $ | $ | ||||||||||||||||||||||
Six Months Ended |
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June 30, 2021 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income |
$ | |||
Adjustments to reconcile net income to net cash used in operating activities: |
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Interest earned on cash held in Trust Account |
( |
) | ||
Underwriting discounts and offering costs attributed to warrant liability |
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Change in fair value of derivative warrant liabilities |
( |
) | ||
Change in fair value of derivative forward purchase agreement |
( |
) | ||
Changes in operating assets and liabilities: |
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Prepaid expenses |
( |
) | ||
Accounts payable and accrued expenses |
( |
) | ||
Other assets |
( |
) | ||
Franchise tax payable |
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Net cash used in operating activities |
( |
) | ||
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Investment of cash in Trust Account |
( |
) | ||
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Net cash used in investing activities |
( |
) | ||
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CASH FLOW FROM FINANCING ACTIVITIES |
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Proceeds from sale of Units, net of underwriting discounts paid |
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Proceeds from sale of Private Placement Warrants |
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Repayment of note payable – related party |
( |
) | ||
Payment of offering costs |
( |
) | ||
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Net cash provided by financing activities |
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NET CHANGE IN CASH |
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CASH, BEGINNING OF PERIOD |
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CASH, END OF PERIOD |
$ | |||
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SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES |
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Initial classification of derivative warrant liability |
$ | |||
Initial classification of derivative forward purchase agreement |
$ | |||
Initial classification of common stock subject to possible redemption |
$ | |||
Change in value of common stock subject to possible redemption |
$ | |||
Deferred underwriting fees charged to additional paid in capital |
$ |
Fair Value Measured as of June 30, 2021 |
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Level 1 |
Level 2 |
Level 3 |
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Assets: |
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Investments held in Trust Account (1) |
$ | $ | — | $ | — | |||||||
Derivative forward purchase agreement (2) |
$ | — | $ | — | $ | |||||||
Liabilities: |
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Derivative warrant liabilities—Public Warrants (3) |
$ | $ | — | $ | — | |||||||
Derivative warrant liabilities—Private Placement Warrants (4) |
$ | — | $ | — | $ |
(1) | The fair value of the investments held in Trust Account was based on the quoted market price. |
(2) | The fair value of the derivative forward purchase agreement was based on the forward price formula . |
(3) | The fair value of the derivative warrant liabilities – Public Warrants was based the quoted market price for MIT.W as of the reporting date. |
(4) | The fair value of the derivative warrant liabilities – Private Placement Warrants was based on a modified Black-Scholes model. |
February 2, 2021 (Initial Measurement) |
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Strike price |
$ | |||
Term (in years) |
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Risk-free rate |
% | |||
Volatility |
% | |||
Dividend yield |
% | |||
Fair value of Public Warrants |
$ | |||
Fair value of Private Placement Warrants |
$ |
June 30, 2021 |
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Strike price |
$ | |||
Term (in years) |
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Risk-free rate |
% | |||
Volatility |
% | |||
Dividend yield |
% | |||
Fair value of Private Placement Warrants |
$ |
• | Term – the expected life of the warrants was assumed to be equivalent to their remaining contractual term. |
• | Risk-free rate – the risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal to the remaining expected life of the Warrants. |
• | Volatility – the Company estimated the volatility of its common stock warrants based on implied volatility and actual historical volatility of a group of comparable publicly traded companies observed over a historical period equal to the expected remaining life of the Warrants. |
• | Dividend yield – the dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the Private Placement Warrants. |
Public Warrants |
Private Placement Warrants |
Total Derivative Warrant Liability |
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Derivative warrant liabilities at January 1, 2021 |
$ | $ | $ | |||||||||
Issuance of Public and Private Warrants (1) |
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Change in fair value of warrant liabilities |
( |
) | ( |
) | ( |
) | ||||||
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Derivative warrant liabilities at March 31, 2021 |
$ | $ | $ | |||||||||
Change in fair value of warrant liabilities |
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Derivative warrant liabilities at June 30, 2021 |
$ | $ | $ | |||||||||
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(1) |
– during the 1 st quarter of 2021, these warrants were transferred from Level 3 in the fair value hierarchy to Level 1 in the fair value hierarchy |
FPA Asset (Liability) |
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Derivative forward purchase agreement at January 1, 2021 |
$ | |||
Executed forward purchase agreement in connection with IPO |
( |
) | ||
Change in fair value of the derivative forward purchase agreement |
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Derivative forward purchase agreement at March 31, 2021 |
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Change in fair value of the derivative forward purchase agreement |
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Derivative forward purchase agreement at June 30, 2021 |
$ | |||
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• | in whole and not in part; |
• | at a price of $ |
• | at any time during the exercise period; |
• | upon a minimum of |
• | if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $ |
• | If, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. |
Three Months Ended |
Six Months Ended |
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June 30, 2021 |
June 30, 2021 |
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Redeemable Class A Common Stock |
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Numerator: Earnings allocable to Redeemable Class A common stock |
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Interest income earned on Trust Account |
$ | $ | ||||||
Less: Applicable franchise and income taxes |
( |
) | ( |
) | ||||
Net income attributable to Redeemable Class A common stock |
$ | $ | ||||||
Denominator: Weighted Average Stock Outstanding, Redeemable Class A |
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Basic and diluted weighted average shares outstanding, Redeemable Class A |
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Basic and diluted net income (loss) per share, Redeemable Class A |
$ | $ | ||||||
Non-Redeemable Class A and Class B Common Stock |
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Numerator: Net income (loss) minus net earnings |
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Net income (loss) |
$ | ( |
) | $ | ||||
Less: Net income allocable to Redeemable Class A common stock |
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Net income (loss) attributable to Non-Redeemable Class A and Class B common stock shareholders |
$ | ( |
) | $ | ||||
Denominator: Weighted Average Stock Outstanding, Non-Redeemable Class A and Class B |
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Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B |
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Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B |
$ | ( |
) | $ |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits. |
* | Filed herewith. |
** | Furnished. |
MASON INDUSTRIAL TECHNOLOGY, INC. | ||||||
Date: July 29, 2021 | By: | /s/ Derek Satzinger | ||||
Name: Derek Satzinger | ||||||
Title: Chief Financial Officer |