NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
1. Description of Organization, Business
Operations, Basis of Presentation and Going Concern
FirstMark Horizon Acquisition Corp. (the “Company”)
is a blank check company incorporated in Delaware on August 13, 2020. 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”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with
emerging growth companies.
As of September 30, 2021, the Company had
not commenced any operations. All activity for the period from August 13, 2020 (inception) through September 30, 2021 relates to the
Company’s formation and the initial public offering (the “Initial Public Offering”) described below, and since the
closing of the Initial Public Offering, the search for a prospective initial 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 on cash and cash equivalents and securities from the proceeds derived from the
Initial Public Offering (as defined below).
The Company’s sponsor is FirstMark Horizon
Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statements for the Company’s Initial
Public Offering became effective on October 5, 2020. On October 8, 2020, the Company consummated its Initial Public Offering of 41,400,000
units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public Shares”),
including 5,400,000 additional Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating
gross proceeds of $414.0 million, and incurring offering costs of approximately $23.3 million, inclusive of approximately $14.5 million
in deferred underwriting commissions (Note 5).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of 6,853,333 warrants (each, a “Private
Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant
to the Sponsor, generating proceeds of approximately $10.3 million (Note 4).
Upon the closing of the Initial Public Offering
and the Private Placement, $414.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds
of the Private Placement was held in a trust account (“Trust Account”) located in the United States with Continental Stock
Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185
days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act, which
invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of
a Business Combination and (ii) the distribution of the Trust Account as described below.
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 Warrants,
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 one or more
initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined
below) (excluding the amount of any deferred underwriting discount held in the Trust Account) at the time of the agreement to enter into
the initial Business Combination. However, the Company only intends to complete a Business Combination if the post-transaction company
owns or acquires 50% or more of the issued and 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.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company will provide the holders (the “Public
Stockholders”) of the Company’s issued and outstanding shares of Class A common stock, par value $0.0001 per share, sold
in the Initial Public Offering (the “Public Shares”) 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 held in the Trust Account (initially anticipated to be $10.00 per Public Share).
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 5). These Public Shares will be recorded at a redemption value
and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards
Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities
from Equity” (“ASC 480”). If the Company seeks stockholder approval, the Company will proceed with a Business Combination
if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in connection
with a Business Combination in an amount that would cause its net tangible assets to be less than $5,000,001. 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 “Certificate of Incorporation”), conduct the redemptions
pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) and file tender offer documents
with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or
the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem the Public Shares
in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. 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 in connection with a Business Combination, the initial stockholders (as defined below) have agreed
to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering
in favor of a Business Combination. In addition, the initial stockholders have agreed to waive their redemption rights with respect to
their Founder Shares and Public Shares in connection with the completion of a Business Combination.
The 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% of the Public Shares, without the prior consent
of the Company.
The holders of the Founder Shares (the “initial
stockholders”) have agreed not to propose an amendment to the Certificate of Incorporation (A) to modify the substance or timing
of the Company’s obligation to allow redemption in connection with a Business Combination or to redeem 100% of the Public Shares
if the Company does not complete a Business Combination within the Combination Period (as defined below) or (B) with respect to any other
provision relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public
Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
If the Company is unable to complete a Business
Combination within 24 months from the closing of the Initial Public Offering, or October 8, 2022, (the “Combination Period”)
and the Company’s stockholders have not amended the Certificate of Incorporation to extend such Combination Period, the Company
will (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business
days thereafter, redeem 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes
payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish Public Stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably
possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors,
liquidate and dissolve, 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.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The initial stockholders have agreed to waive
their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete
a Business Combination within the Combination Period. However, if the initial stockholders acquire Public Shares in or after the Initial
Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the
Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to
the deferred underwriting commission (see Note 5) 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 residual assets remaining available for distribution (including Trust Account assets) will be only $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 (except for the Company’s independent registered public accounting firm) 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 (a “Target”),
reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) the lesser amount per Public Share held
in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each
case net of interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims by a third party
or Target that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the
Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable
against a third party, our 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 (other than the Company’s independent registered public accounting firm), 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.
Proposed Business Combination
On October 6, 2021, the Company entered into
an Agreement and Plan of Merger (the “Merger Agreement”) with Sirius Merger Sub, Inc., a Delaware corporation and a wholly
owned direct subsidiary of the Company (“Merger Sub”), Starry, Inc., a Delaware corporation (“Starry”), and Starry
Holdings, Inc., a Delaware corporation and wholly owned direct subsidiary of Starry (“Holdings”). Pursuant to the Merger
Agreement, and subject to the terms and conditions contained therein, the business combination will be effected in two steps: (a) the
Company will merge with and into Holdings (the “SPAC Merger” and, the closing of the SPAC Merger, the “SPAC Merger
Closing,” and, the time at which the SPAC Merger becomes effective, the “SPAC Merger Effective Time”), with Holdings
surviving the SPAC Merger as a publicly traded entity (such surviving entity, “New Starry”), and becoming the sole owner
of Merger Sub; and (b) at least twenty-four (24) hours, but no more than forty-eight (48) hours, after the SPAC Merger Effective Time,
Merger Sub will merge with and into Starry (the “Acquisition Merger” and, together with the SPAC Merger and all other transactions
contemplated by the Merger Agreement, the “Business Combination”), with Starry surviving the Acquisition Merger as a wholly
owned subsidiary of New Starry. New Starry will have a dual-class share structure with super voting rights for Starry’s co-founder
and Chief Executive Officer, Chaitanya Kanojia.
Refer to the Current Report on Form 8-K, filed with the SEC on October
7, 2021 for additional information.
Basis of Presentation
The accompanying unaudited condensed financial
statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X and pursuant
to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the
opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments
necessary for the fair statement of the balances and results for the period presented. Operating results for the three and nine months
ended September 30, 2021 are not necessarily indicative of the results that may be expected for the period ending December 31, 2021.
The accompanying unaudited condensed financial statements should be
read in conjunction with the audited financial statements and notes thereto included in the Form 10-K/A filed by the Company with the
SEC on December 14, 2021.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Restatement to Previously Reported Financial
Statements
In preparation of the Company’s unaudited condensed financial
statements for the quarterly period ended September 30, 2021, the Company concluded it should restate its previously issued financial
statements to classify all Class A common stock subject to possible redemption in temporary equity. In accordance with ASC 480-10-S99,
redemption provisions not solely within the control of the Company, require common stock subject to redemption to be classified outside
of permanent equity. The Company had previously classified a portion of its Class A common stock in permanent equity. Although the Company
did not specify a maximum redemption threshold, its charter currently provides that the Company will not redeem its Public Shares in an
amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable shares
classified as temporary equity as part of net tangible assets. Effective with these condensed financial statements, the Company revised
this interpretation to include temporary equity in net tangible assets.
In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,”
and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in
Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impact was material
to the previously filed financial statements that contained the error, reported in the Company’s
Form 10-Qs for the quarterly periods ended March 31, 2021, and June 30, 2021 (the “Affected Quarterly Periods”). Therefore,
the Company, in consultation with its Audit Committee, concluded that the Affected Quarterly
Periods should be restated to present all Class A common stock subject to possible redemption as temporary equity and to recognize accretion
from the initial book value to redemption value at the time of its Initial Public Offering. As such, the Company is reporting these restatements
to those periods in this quarterly report. The previously presented Affected Quarterly Periods
should no longer be relied upon.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The impact of the restatement on the financial statements
for the Affected Quarterly Periods is presented below.
The table below presents the effect of the financial
statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of March
31, 2021:
March 31, 2021
|
|
As
Previously Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Total assets
|
|
$
|
415,579,179
|
|
|
$
|
-
|
|
|
$
|
415,579,179
|
|
Total liabilities
|
|
$
|
47,467,226
|
|
|
$
|
-
|
|
|
$
|
47,467,226
|
|
Class A common stock subject to possible redemption
|
|
$
|
363,111,950
|
|
|
$
|
50,888,050
|
|
|
$
|
414,000,000
|
|
Preferred stock
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Class A common stock
|
|
$
|
509
|
|
|
$
|
(509
|
)
|
|
$
|
-
|
|
Class B common stock
|
|
$
|
1,035
|
|
|
$
|
-
|
|
|
$
|
1,035
|
|
Additional paid-in captial
|
|
$
|
6,182,045
|
|
|
$
|
(6,182,045
|
)
|
|
$
|
-
|
|
Accumulated deficit
|
|
$
|
(1,183,586
|
)
|
|
$
|
(44,705,496
|
)
|
|
$
|
(45,889,082
|
)
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(50,888,050
|
)
|
|
$
|
(45,888,047
|
)
|
Total Liabilities, Class A Common Stock Subject to Redemption and Stockholders’ Equity (Deficit)
|
|
$
|
415,579,179
|
|
|
$
|
-
|
|
|
$
|
415,579,179
|
|
The table below presents the effect of the financial
statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for
the three months ended March 31, 2021:
Form 10-Q (March 31, 2021): For the Three Months Ended March 31, 2021
|
|
|
|
|
|
As
Previously Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Cash Flows from Operating Activities
|
|
$
|
(108,630
|
)
|
|
$
|
-
|
|
|
$
|
(108,630
|
)
|
Cash Flows from Investing Activities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash Flows from Financing Activities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Supplemental Disclosure of Noncash Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
18,729,650
|
|
|
$
|
(18,729,650
|
)
|
|
$
|
-
|
|
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The table below presents the effect of the financial
statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of June 30,
2021:
June 30, 2021
|
|
As
Previously Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Total assets
|
|
$
|
414,869,841
|
|
|
$
|
-
|
|
|
$
|
414,869,841
|
|
Total liabilities
|
|
$
|
47,081,116
|
|
|
$
|
-
|
|
|
$
|
47,081,116
|
|
Class A common stock subject to possible redemption
|
|
$
|
362,788,720
|
|
|
$
|
51,211,280
|
|
|
$
|
414,000,000
|
|
Preferred stock
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Class A common stock
|
|
$
|
512
|
|
|
$
|
(512
|
)
|
|
$
|
-
|
|
Class B common stock
|
|
$
|
1,035
|
|
|
$
|
-
|
|
|
$
|
1,035
|
|
Additional paid-in captial
|
|
$
|
6,505,272
|
|
|
$
|
(6,505,272
|
)
|
|
$
|
-
|
|
Accumulated deficit
|
|
$
|
(1,506,814
|
)
|
|
$
|
(44,705,496
|
)
|
|
$
|
(46,212,310
|
)
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,005
|
|
|
$
|
(51,211,280
|
)
|
|
$
|
(46,211,275
|
)
|
Total Liabilities, Class A Common Stock Subject to Redemption and Stockholders’ Equity (Deficit)
|
|
$
|
414,869,841
|
|
|
$
|
-
|
|
|
$
|
414,869,841
|
|
The table below presents the effect of the financial
statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for
the six months ended June 30, 2021:
Form 10-Q (June 30, 2021) - For the Six Months Ended June 30, 2021
|
|
|
|
As
Previously Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Cash Flows from Operating Activities
|
|
$
|
(728,904
|
)
|
|
$
|
-
|
|
|
$
|
(728,904
|
)
|
Cash Flows from Investing Activities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash Flows from Financing Activities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Supplemental Disclosure of Noncash Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
323,230
|
|
|
$
|
(323,230
|
)
|
|
$
|
-
|
|
In connection with the change in
presentation for the Class A common stock subject to possible redemption, the Company has revised its earnings per share calculation
to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business
Combination as the most likely outcome, in which case, both classes of shares participate pro rata in the income and losses of the
Company. The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per common stock
is presented below for the Affected Quarterly Periods:
|
|
Earnings Per Share for Class A Common Stock
|
|
|
|
As
Previously Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Form 10-Q (March 31, 2021): For the Three Months Ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
18,729,649
|
|
|
$
|
-
|
|
|
$
|
18,729,649
|
|
Weighted average shares outstanding
|
|
|
34,459,041
|
|
|
|
6,940,959
|
|
|
|
41,400,000
|
|
Basic and diluted earnings per share
|
|
$
|
0.00
|
|
|
$
|
0.36
|
|
|
$
|
0.36
|
|
Form 10-Q (June 30, 2021) - For the Three Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(323,228
|
)
|
|
$
|
-
|
|
|
$
|
(323,228
|
)
|
Weighted average shares outstanding
|
|
|
36,278,517
|
|
|
|
5,121,483
|
|
|
|
41,400,000
|
|
Basic and diluted earnings per share
|
|
$
|
0.00
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
Form 10-Q (June 30, 2021) - For the Six Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
18,406,421
|
|
|
$
|
-
|
|
|
$
|
18,406,421
|
|
Weighted average shares outstanding
|
|
|
35,390,056
|
|
|
|
6,009,944
|
|
|
|
41,400,000
|
|
Basic and diluted earnings per share
|
|
$
|
0.00
|
|
|
$
|
0.36
|
|
|
$
|
0.36
|
|
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
|
|
Earnings Per Share for Class B Common Stock
|
|
|
|
As
Previously Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Form 10-Q (March 31, 2021): For the Three Months Ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
18,729,649
|
|
|
$
|
-
|
|
|
$
|
18,729,649
|
|
Weighted average shares outstanding
|
|
|
17,290,959
|
|
|
|
(6,940,959
|
)
|
|
|
10,350,000
|
|
Basic and diluted earnings per share
|
|
$
|
1.08
|
|
|
$
|
(0.72
|
)
|
|
$
|
0.36
|
|
Form 10-Q (June 30, 2021) - For the Three Months Ended June 30, 2021
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Net loss
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$
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(323,228
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)
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$
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-
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$
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(323,228
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)
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Weighted average shares outstanding
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15,439,160
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(5,089,160
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)
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10,350,000
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Basic and diluted earnings per share
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$
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(0.02
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)
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$
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0.01
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$
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(0.01
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)
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Form 10-Q (June 30, 2021) - For the Six Months Ended June 30, 2021
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Net income
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$
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18,406,421
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$
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-
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$
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18,406,421
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Weighted average shares outstanding
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16,359,944
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(6,009,944
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)
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10,350,000
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Basic and diluted earnings per share
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$
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1.13
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$
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(0.77
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)
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$
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0.36
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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 auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act of 2002, 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 an
emerging growth 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 an 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 that is neither an emerging growth company nor an emerging growth company that has opted
out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect
on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily
determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Liquidity and Going Concern
As of September 30, 2021, the Company had approximately
$270,000 in its operating bank account, approximately $19,000 of interest income available in the Trust Account to pay the Company’s
franchise and income tax obligations and a working capital deficit of approximately $3.0 million. Further, the Company has incurred and
expects to continue to incur significant costs in pursuit of its acquisition plans.
The Company’s liquidity needs to date have
been satisfied through the $25,000 proceeds received from the sale of its Founder Shares (as defined below) to the Sponsor, the loan
proceeds under a promissory note of $167,000 from the Sponsor to cover the Company’s offering costs in connection with the Initial
Public Offering, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. The balance of the
promissory note was fully repaid on October 8, 2020. 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, provide the Company Working Capital Loans (see Note 4). As of September 30, 2021 and December 31, 2020, there were no amounts outstanding
under any Working Capital Loans.
Based on the foregoing, management has determined
that the working capital deficit raises substantial doubt about the Company’s ability to continue as a going concern until the
earlier of the consummation of a Business Combination or the date the Company is required to liquidate. The unaudited condensed financial
statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. Over this time
period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business
Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target
business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
2. Significant Accounting Policies
Use of Estimates
The preparation of unaudited condensed 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 unaudited condensed financial
statements and the reported amounts of revenue and expenses during the reporting period. 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 unaudited condensed 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 had no cash equivalents as of September
30, 2021 and December 31, 2020.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit of $250,000, and investments held in Trust Account. As of September 30, 2021 and December
31, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant
risks on such accounts.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Investments Held in Trust Account
The Company’s portfolio of investments
is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity
of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable
fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government
securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are
comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds
are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the
change in fair value of these securities is included in income from investments held in Trust Account in the accompanying unaudited condensed
statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal
or approximate the carrying amounts represented in the condensed balance sheets.
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. U.S. 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 consist of:
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Level 1, defined as observable inputs such as quoted
prices (unadjusted) for identical instruments in active markets; and
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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
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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.
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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 Warrant Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,
pursuant to ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The 13,800,000 warrants issued in connection
with the Initial Public Offering (the “Public Warrants”) and the 6,853,333 Private Placement Warrants are recognized as derivative
liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and
adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date
until exercised, and any change in fair value is recognized in the Company’s statement of operations. The initial and subsequent
fair value of the Private Warrants and the initial fair value of the Public Warrants issued in connection with the private placement
and initial public offering, respectively, have been measured using a binomial lattice model in an option pricing framework. The fair
value of the Public Warrants has subsequently been determined using listed prices in an active market for such warrants. The determination
of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the
actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation
is not reasonably expected to require the use of current assets or require the creation of current liabilities.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Offering Costs Associated with the Initial
Public Offering
Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering.
Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value
basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities are expensed as incurred, presented
as non-operating expenses in the statement of operations. Offering costs associated with the Class A common stock issued were charged
against the carrying value of the Class A common stock upon the completion of the Initial Public Offering. The Company classifies deferred
underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets
or require the creation of current liabilities.
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock
subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.”
Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair
value. Shares of conditionally redeemable Class A common stock (including Class A 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, shares of Class A common stock are classified as stockholders’
equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s
control and subject to the occurrence of uncertain future events. Accordingly, as of the Initial Public Offering, a total of 41,400,000
shares of Class A common stock subject to possible redemption, are presented at redemption value as temporary equity, outside of the
stockholders’ equity section of the Company’s balance sheet.
Effective with the closing of the Initial Public
Offering and the over-allotment option, the Company recognized the accretion from initial book value to redemption amount, which resulted
in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Net Income (Loss) Per Share of Common Stock
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as
Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss)
per common share is calculated by dividing the net income by the weighted average shares of common stock outstanding for the respective
period.
The calculation of diluted net income (loss)
does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the private placement warrants
to purchase an aggregate of 20,653,333 shares of Class A common stock in the calculation of diluted income per share, because their inclusion
would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same as basic net income
per share for the three and nine months ended September 30, 2021. Accretion associated with the redeemable Class A common stock is excluded
from earnings per share as the redemption value approximates fair value.
The table below presents a reconciliation of
the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of common stock:
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For the Three Months Ended
September 30, 2021
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For the Nine Months Ended
September 30, 2021
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For The Period From
August 13,
2020 (inception) through
September 30, 2020
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Class A
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Class B
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Class A
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Class B
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Class A
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Class B
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Basic and diluted net income (loss) per common stock:
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Numerator:
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Allocation of net income (loss)
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$
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2,479,281
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$
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619,820
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$
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17,204,418
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$
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4,301,104
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$
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-
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$
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(30,142
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)
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Denominator:
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Basic and diluted weighted average common stock outstanding
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41,400,000
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10,350,000
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41,400,000
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10,350,000
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-
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10,350,000
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Basic and diluted net income (loss) per common stock
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$
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0.06
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$
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0.06
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$
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0.42
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$
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0.42
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$
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-
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$
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(0.00
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)
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FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Income Taxes
The Company follows the asset and liability method
of accounting for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). 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. As of
September 30, 2021 and December 31, 2020, the Company has aggregate deferred tax assets of approximately $819,000 and $267,000, respectively,
and has recognized a full valuation allowance against the deferred tax assets.
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.
There were no unrecognized tax benefits as of September 30, 2021 and December 31, 2020. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. The Company’s currently taxable income primarily consists of interest
and dividends earned and unrealized gains on investments held in the Trust Account. The Company’s general and administrative costs
are generally considered start-up costs and are not currently deductible.
No amounts were accrued for the payment of interest
and penalties as of September 30, 2021 and December 31, 2020. 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.
Recent Adopted Accounting Standards
In August 2020, the FASB issued ASU No. 2020-06,
Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic
815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible
instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that
are required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per
share calculation in certain areas. The Company early adopted the ASU on January 1, 2021 using a modified retrospective method of transition.
Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Management does not believe that any other recently
issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
3. Initial Public Offering
On October 8, 2020, the Company consummated its
Initial Public Offering of 41,400,000 Units, including 5,400,000 Over-Allotment Units, at $10.00 per Unit, generating gross proceeds
of $414.0 million, and incurring offering costs of approximately $23.3 million, inclusive of approximately $14.5 million in deferred
underwriting commissions.
Each Unit consists of one share of Class A common
stock, and one-third of one redeemable warrant (each, a “Public Warrant”). Each 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 6).
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
4. Related Party Transactions
Founder Shares
On August 18, 2020, the Sponsor purchased 8,625,000
shares of the Company’s Class B common stock, par value $0.0001 per share, (the “Founder Shares”) for an aggregate
price of $25,000. The Company transferred an aggregate of 120,000 Founder Shares to certain members of the Company’s management
team. On October 5, 2020, the Company effected a 1:1.2 stock split of its Class B common stock, resulting in the Sponsor holding an aggregate
of 10,230,000 Founder Shares and there being an aggregate of 10,350,000 Founder Shares outstanding. All shares and associated amounts
have been retroactively restated to reflect the stock split. The Sponsor agreed to forfeit up to 1,350,000 Founder Shares to the extent
that the over-allotment option is not exercised in full by the underwriters, so that the Founder Shares would represent 20.0% of the
Company’s issued and outstanding shares after the Initial Public Offering. The underwriter exercised its over-allotment option
in full on October 6, 2020; thus, the 1,350,000 Founder Shares were no longer subject to forfeiture.
The initial stockholders agreed, subject to limited
exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion
of the initial Business Combination; and (B) subsequent to the initial Business Combination (x) if the last reported sale price of 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 150 days after the initial Business Combination
or (y) the date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that
results in all of the Public Stockholders having the right to exchange their shares of Class A common stock for cash, securities or other
property. Any permitted transferees will be subject to the same restrictions and other agreements of the initial stockholders with respect
to any Founder Shares.
Private Placement Warrants
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the Private Placement of 6,853,333 Private Placement Warrants, at a price of $1.50 per Private
Placement Warrant to the Sponsor, generating proceeds of approximately $10.3 million.
Each Private Placement Warrant is exercisable
for one whole share of Class A common stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement
Warrants to the Sponsor were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does
not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private
Placement Warrants will be non-redeemable (except as described below in Note 6 under “Warrants - Redemption of warrants when the
price per share of Class A common stock equals or exceeds $10.00”) so long as they are held by the initial purchasers or their
permitted transferees.
The purchasers of the Private Placement Warrants
agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants (except to permitted transferees)
until 30 days after the completion of the initial Business Combination.
Related Party Loans
On August 18, 2020, the Sponsor agreed to loan
the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the
“Note”). This loan was non-interest bearing and payable upon the completion of the Initial Public Offering. The Company borrowed
$167,000 under the Note. The Company repaid the Note in full on October 8, 2020.
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 will 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. The Working Capital Loans would
either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working
Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants
would be identical to the Private Placement Warrants. 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. To date, the Company had no borrowings under the Working
Capital Loans.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Administrative Services Agreement
The Company entered into an agreement that provides
that, commencing on October 6, 2020, through the earlier of consummation of the initial Business Combination and the Company’s
liquidation, the Company will pay an affiliate of the Sponsor a total of $10,000 per month for office space, administrative and support
services. For the three and nine months ended September 30, 2021, the Company incurred expenses of $30,000 and $90,000, under this agreement,
respectively. There were no balances outstanding under such agreement as of September 30, 2021 and December 31, 2020.
The Sponsor, officers and directors, or any of
their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s
behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s
audit committee will review on a quarterly basis all payments that were made by us to the Sponsor, directors, officers or the Company’s
or any of their affiliates.
5. Commitments and Contingencies.
Registration Rights
The holders of Founder Shares, Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any (and any shares of common stock issuable upon
the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of
the Founder Shares), are entitled to registration rights pursuant to the registration rights agreement. These holders will be entitled
to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company
will not be required to effect or permit any registration or cause any registration statement to become effective until termination of
the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were entitled to an underwriting
discount of $0.20 per Unit, or $8.28 million in the aggregate, which was paid upon the closing of the Initial Public Offering. An additional
fee of $0.35 per Unit, or approximately $14.5 million in the aggregate will be payable to the underwriters for deferred underwriting
commissions. 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.
Consulting Agreement
In connection with the search for a prospective
initial Business Combination, the Company has entered into consulting agreements with consulting firms to provide due diligence on a
target company. A portion of the fees in connection with the services rendered have been deferred to the closing of a Business Combination
without regard if the consulting firm has provided services as to the target subject of the Business Combination. If the Company does
not complete a Business Combination, then no portion of the deferred fees are due or payable to the consulting firms. For the three and
nine months ended September 30, 2021, the Company has incurred and accrued $0.7 million and $1.5 million, respectively, of deferred fees
for services rendered under such agreements.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
6. Derivative Warrant Liabilities.
As of September 30, 2021 and December 31, 2020,
the Company has 13,800,000 Public Warrants and 6,853,333 Private Placement Warrants outstanding.
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public 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; provided in each case that the Company has an effective registration statement under
the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public Warrants and a current prospectus
relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless
exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later
than 15 business days after the closing of its initial Business Combination, the Company will use its commercially reasonable efforts
to file with the SEC and have an effective registration statement covering the shares of Class A common stock issuable upon exercise of
the warrants and will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the
closing of the Company’s initial Business Combination and to maintain a current prospectus relating to those shares of Class A common
stock until the warrants expire or are redeemed. If the shares issuable upon exercise of the warrants are not registered under the Securities
Act in accordance with the above requirements, the Company will be required to permit holders to exercise their warrants on a cashless
basis. However, no warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares
to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the
securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if the
Company’s shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may,
at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance
with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect
a registration statement, and in the event the Company does not so elect, it will use its commercially reasonable efforts to register
or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption
or liquidation. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital
raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less
than $9.20 per share of Class A 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 Sponsor or its affiliates, without taking into account any Founder Shares
held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate
gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding
of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z)
the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day prior
to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $9.20
per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market
Value and the Newly Issued Price, the $18.00 per share redemption trigger prices described below under “Redemption of warrants when
the price per share of Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the price per share
of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the
Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Redemption of
warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be
equal to the higher of the Market Value and the Newly Issued Price.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Private Placement Warrants are identical to
the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon 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 non-redeemable (except as described below in “Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00”) so long as they are held by the Sponsor
or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its 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.
Redemption of warrants when the price per share
of Class A common stock equals or exceeds $18.00:
Once the warrants become exercisable, the Company
may call the outstanding warrants for redemption (except as described herein with respect to the Private Placement Warrants):
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per warrant;
|
|
●
|
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
|
|
●
|
if, and only if, the last reported sale price of Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted).
|
The Company will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon
exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout
the 30-day redemption period. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right
even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants when the price per share
of Class A common stock equals or exceeds $10.00:
Once the warrants become exercisable, the Company
may redeem the outstanding warrants:
|
●
|
in whole and not in part;
|
|
●
|
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” (as defined below) of Class A common stock;
|
|
●
|
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted); and
|
|
●
|
if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
The “fair market value” of Class
A common stock shall mean the volume weighted average price of Class A common stock during the 10 trading days immediately following
the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable in connection
with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment).
In no event will the Company be required to net
cash settle any warrant. 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.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
7. Class A Common Stock Subject to Possible
Redemption
The Company’s Class A common stock features
certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events.
The Company is authorized to issue 500,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holder of the Company’s
Class A common stock are entitled to one vote for each share. As of September 30, 2021 and December 31, 2020, there were 41,400,000 shares
of Class A common stock outstanding, all of which were subject to redemption.
As of September 30, 2021, Class A common stock
reflected on the unaudited condensed balance sheet is reconciled on the following table:
Gross proceeds from Initial Public Offering
|
|
$
|
414,000,000
|
|
Less:
|
|
|
|
|
Fair value of Public Warrants at issuance
|
|
|
(22,770,000
|
)
|
Offering costs allocated to Class A common stock subject to possible redemption
|
|
|
(21,959,461
|
)
|
Plus:
|
|
|
|
|
Accretion on Class A common stock subject to possible redemption amount
|
|
|
44,729,461
|
|
Class A common stock subject to possible redemption
|
|
$
|
414,000,000
|
|
8. Stockholders’ Deficit
Preferred Stock - The Company is
authorized to issue 5,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights
and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2021 and December
31, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock - The Company
is authorized to issue 500,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of September 30, 2021 and
December 31, 2020, there were 41,400,000 shares of Class A common stock issued and outstanding, all subject to possible redemption and
therefore classified as temporary equity on the accompanying unaudited condensed balance sheets (see Note 7).
Class B Common Stock - The Company
is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of September 30, 2021 and December
31, 2020, there were 10,350,000 shares of Class B common stock issued and outstanding (see Note 4).
Common stockholders of record are entitled to
one vote for each share held on all matters to be voted on by stockholders and vote together as a single class, except as required by
law; provided, that, prior to the Company’s initial Business Combination, holders of the Class B common stock will have the right
to appoint all of the Company’s directors and remove members of the board of directors for any reason, and holders of the Class
A common stock will not be entitled to vote on the appointment of directors during such time.
As of September 30, 2021, the Class B common stock
would automatically convert into Class A common stock at the time of the initial Business Combination, or earlier at the option of the
holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like,
and subject to further adjustment as provided herein. 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 issued in the Initial Public Offering and related to the closing of the initial Business
Combination, the ratio at which the shares of Class B common stock will convert into shares of Class A common stock will be adjusted (unless
the holders of a majority of the issued and outstanding shares of Class B common stock agree to waive such anti-dilution 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 all shares of common stock issued
and 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 the initial Business Combination, excluding any shares or equity-linked securities issued,
or to be issued, to any seller in the initial Business Combination.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
9. Fair Value Measurements.
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy
of the valuation techniques that the Company utilized to determine such fair value.
|
|
Fair Value Measured as of September 30, 2021
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account
|
|
$
|
414,024,614
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
414,024,614
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative public warrant liabilities
|
|
$
|
17,388,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
17,388,000
|
|
Derivative private warrant liabilities
|
|
$
|
-
|
|
|
$
|
8,635,200
|
|
|
$
|
0
|
|
|
$
|
8,635,200
|
|
Total fair value of liabilities
|
|
$
|
17,388,00
|
|
|
$
|
8,635,200
|
|
|
$
|
0
|
|
|
$
|
26,023,200
|
|
|
|
Fair Value Measured as of December 31, 2020
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account
|
|
$
|
414,005,739
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative public warrant liabilities
|
|
$
|
34,362,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
34,362,000
|
|
Derivative private warrant liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
17,064,800
|
|
|
$
|
17,064,800
|
|
Total fair value of liabilities
|
|
$
|
34,362,000
|
|
|
$
|
-
|
|
|
$
|
17,064,800
|
|
|
$
|
51,426,800
|
|
Transfers to/from Levels 1, 2, and 3 are recognized
at the beginning of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a
Level 1 fair value measurement in December 2020, upon trading of the Public Warrants in an active market. The estimated fair value of the Private Warrants was transferred from a
Level 3 measurement to a Level 2 fair value measurement as of September 30, 2021, as the transfer of Private Placement Warrants to anyone
who is not a permitted transferee would result in the Private Placement Warrants having substantially the same terms as the Public Warrants,
the Company determined that the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant.
Level 1 assets include investments money market
funds that invest solely in U.S. government securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market
prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The initial and subsequent fair value of the Private
Warrants and the initial fair value of the Public Warrants issued in connection with the private placement and initial public offering,
respectively, have been measured using a binomial lattice model in an option pricing framework. The fair value of the Public Warrants
has subsequently been determined using listed prices in an active market for such warrants. For the three and nine months ended September
30, 2021, the Company recognized a benefit to the unaudited condensed statement of operations resulting from a decrease in the fair value
of liabilities of approximately $5.6 million and $25.4 million, respectively, which is presented as a change in fair value of derivative
warrant liabilities on the accompanying unaudited condensed statement of operations.
FIRSTMARK HORIZON ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The initial estimated fair value of the
Private Placement Warrants, and the Public Warrants prior to being separately listed and traded, is determined using Level 3 inputs.
Inherent in a binomial lattice model in an option pricing framework are assumptions related to expected stock-price volatility, the
probability of a successful business combination, term, risk-free interest rate and dividend yield. For the initial fair value
estimates, the Company estimates volatility based on the constituents of a broad-based stock price index reflecting the potential
merger targets and including a probability of a successful business combination. For subsequent fair value measurements, the Company
estimates the volatility of its common stock based on the implied volatility derived from the traded prices of the Public Warrants
which includes a probability of successful business combination. The probability of a successful business combination as of the
initial measurement date is based on industry studies and the Company’s best estimates. The risk-free interest rate is based
on the term-matched U.S. Treasury yield curve as of the measurement dates. The term of the warrants is equal to their remaining
contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
The following table provides quantitative information
regarding Level 3 fair value measurements inputs at December 31, 2020:
|
|
As of
December 31,
2020
|
|
|
|
|
|
Option term (in years)
|
|
|
5
|
|
Volatility
|
|
|
33.90
|
%
|
Risk-free interest rate
|
|
|
0.47
|
%
|
Dividend Yield
|
|
|
0
|
%
|
The change in the fair value of the warrant liabilities,
measured using Level 3 inputs, for the three months and nine months ended September 30, 2021 is summarized as follows:
Derivative warrant liabilities at January 1, 2021
|
|
$
|
51,426,800
|
|
Issuance of Public and Private Warrants, Level 3 measurements
|
|
|
-
|
|
Transfer of Public Warrants to Level 1
|
|
|
(21,390,000
|
)
|
Change in fair value of derivative warrant liabilities, Level 3
|
|
|
(19,414,130
|
)
|
Derivative warrant liabilities - Level 3, at March 31, 2021
|
|
$
|
10,622,670
|
|
Change in fair value of derivative warrant liabilities, Level 3
|
|
|
(137,070
|
)
|
Derivative warrant liabilities - Level 3, at June 30, 2021
|
|
$
|
10,485,600
|
|
Transfer of Private Warrants to Level 2
|
|
|
(10,485,600
|
)
|
Change in fair value of derivative warrant liabilities, Level 3
|
|
|
-
|
|
Derivative warrant liabilities - Level 3, at September 30, 2021
|
|
$
|
-
|
|
10. Subsequent Events.
The Company evaluated subsequent events and
transactions that occurred up to the date the unaudited condensed financial statements were available to be issued. The Company did
not identify any subsequent events, other than as described below, that would have required adjustment or disclosure in the
unaudited condensed financial statements.
On October 6, 2021, the Company entered into
the Merger Agreement with Merger Sub, Starry, and Holdings (see Note 1 for more information regarding the proposed business
combination provided by the Merger Agreement).
On
December 6, 2021, the Sponsor agreed to loan the Company an aggregate of up to $1,500,000 to cover expenses related to the Business Combination
pursuant to a promissory note (the “Second Note”). This loan was non-interest bearing and payable upon the completion of
the Business Combination. The Company borrowed $800,000 under the Note.