NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS
TCW Special Purpose Acquisition Corp. (the “Company”
or “TCW”) is a blank check company incorporated in Delaware on December 21, 2020. The Company was formed for the purpose
of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with
one or more businesses (a “Business Combination”).
The Company is not limited to a particular industry
or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and,
as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of March 31, 2021, the Company had not
commenced any operations. All activity for the period from December 21, 2020 (inception) through March 31, 2021 relates to the Company’s
formation, the initial public offering (“Initial Public Offering”) as 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 will generate non-operating income in the form
of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial
Public Offering.
The registration statement for the Company’s Initial
Public Offering was declared effective on March 1, 2021. On March 4, 2021, the Company consummated the Initial Public Offering
of 45,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public
Shares”), at $10.00 per Unit, generating gross proceeds of $450,000,000, which is discussed in Note 4.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 7,333,333 warrants (the “Private Placement Warrants”) at a price of $1.50
per Private Placement Warrant in a private placement to TCW Special Purpose Sponsor LLC (the “Sponsor”) generating gross proceeds
of $11,000,000, which is described in Note 5.
Following the closing of the Initial Public Offering
on March 4, 2021, an amount of $450,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public
Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), and were invested
in 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 in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940,
as amended (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 funds held in the Trust
Account, as described below.
On March 4, 2021, the underwriters notified
the Company of their intention to partially exercise their over-allotment option. As such, on March 5, 2021, the Company consummated
the sale of an additional 1,393,299 Units, at $10.00 per Unit, and the sale of an additional 185,774 Private Placement Warrants, at $1.50
per Private Placement Warrant, generating total gross proceeds of $14,211,651. A total of $13,932,990 of the net proceeds was deposited
into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $463,932,990.
Transaction costs related to the issuances described
above amounted to $26,216,175, consisting of $9,278,660 of cash underwriting fees, $16,237,655 of deferred underwriting fees and $699,860
of other costs. In addition, at March 31, 2021, $564,489 of cash was held outside of the Trust Account and is available for working
capital purposes.
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 the Private Placement Warrants,
although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company
must complete a Business Combination with one or more target businesses that together have an aggregate fair market value of at least
80% of the value of the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust
Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
The Company will provide its holders of the outstanding
Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the
completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or
(ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct
a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public
Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro
rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There
will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will proceed with a Business Combination
only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination
and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder
vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company
will, pursuant to its second 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 (“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 other legal reasons, the Company will offer to redeem shares
in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks
stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note
6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally,
each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction
or don’t vote at all.
Notwithstanding the above, if the Company seeks
stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, 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% or more
of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed to waive (i) redemption
rights with respect to any Founder Shares and Public Shares held in connection with the completion of an initial Business Combination,
(ii) redemption rights with respect to any Founder Shares and Public Shares held in connection with a stockholder vote to approve an amendment
to an amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection
with an initial Business Combination or to redeem 100% of Public Shares if the Company has not consummated an initial Business Combination
within 24 months from the closing of the Initial Public Offering or with respect to any other provisions relating to stockholders’
rights or pre-initial Business Combination activity and (iii) rights to liquidating distributions from the Trust Account with respect
to any Founder Shares held if the Company fails to complete an initial Business Combination within 24 months from the closing of the Initial
Public Offering or any extended period of time that the Company may have to consummate an initial Business Combination.
The Company will have until March 4, 2023
to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination
within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten business days thereafter, 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 earned on the funds held in the Trust Account and not previously
released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of remaining stockholders and board of directors, liquidate and dissolve, subject, in each case, to our obligations under Delaware law
to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions
with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within
the Combination Period.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
The underwriters have agreed to waive their rights
to their deferred underwriting commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business
Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust
Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the
per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held in the Trust
Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or
products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement,
reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual 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 the interest which may be withdrawn to pay the Company’s taxes. This liability will not apply with respect to any claims
by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, in the event that an executed waiver is deemed to
be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.
The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by
endeavoring to have all vendors, service providers (except 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.
Liquidity
As of March 31, 2021, the Company had $564,489
in cash held outside of the Trust Account and working capital of $1,175,610.
The Company’s liquidity needs prior to the
consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the Founder Shares, and a
loan of $300,000 under an unsecured and non-interest bearing promissory note (see Note 6). Subsequent to the consummation of the Initial
Public Offering, the Company’s liquidity will be satisfied through the net proceeds from the private placement held outside of the
Trust Account.
Based on the foregoing, management believes that
the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a
Business Combination or one year from this filing. Over this time period, the Company will be using the funds held outside of the Trust
Account for paying existing accounts payable and accrued liabilities, 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.
Risks and Uncertainties
Management is currently evaluating 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 financial statements. The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
NOTE 2. REVISION OF PREVIOUSLY ISSUED FINANCIAL
STATEMENTS
On April 12, 2021, the Acting Director of the
Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting
considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting
Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”).
Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business
combination, which terms are similar to those contained in the warrant agreement governing the Company’s warrants. As a result of
the SEC Statement, the Company reevaluated the accounting treatment of (i) the 15,000,000 redeemable warrants (the “Public Warrants”)
that were included in the units issued by the Company in its initial public offering (the “Initial Public Offering”) and (ii)
the 7,333,333 redeemable warrants that were issued to the Company’s sponsor in a private placement that closed concurrently with
the closing of the Initial Public Offering (together with the Public Warrants, the “Warrants”). The Company previously accounted
for the Warrants as components of equity.
In further consideration of the guidance in Accounting
Standards Codification (“ASC”) 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC
815”), the Company concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the
Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC
815, the Warrants should be recorded as derivative liabilities on the balance sheet and measured at fair value at inception (on the date
of the Initial Pulic Offering) and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair
value recognized in the Statements of Operations in the period of change.
In accordance with ASC Topic 340, Other Assets
and Deferred Costs, as a result of the classification of the Warrants as derivative liabilities, the Company expensed a portion of
the offering costs originally recorded as a reduction in equity. The portion of offering costs that was expensed was determined based
on the relative fair value of the Public Warrants and shares of Class A common stock included in the Units.
The Company’s accounting for the Warrants
as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported cash.
The following tables summarize the effect of the
revision on each financial statement line item as of the date indicated:
|
|
|
As Previously Reported
|
|
|
Adjustment
|
|
|
As Revised
|
|
|
Balance Sheet as of March 4, 2021 (audited)
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities
|
|
$
|
—
|
|
|
$
|
33,276,670
|
|
|
$
|
33,276,670
|
|
|
Total liabilities
|
|
|
17,281,245
|
|
|
|
33,276,670
|
|
|
|
50,557,915
|
|
|
Class A common stock subject to possible redemption
|
|
|
430,910,870
|
|
|
|
(33,276,670
|
)
|
|
|
397,634,200
|
|
|
Class A common stock
|
|
|
191
|
|
|
|
333
|
|
|
|
524
|
|
|
Additional paid-in capital
|
|
|
5,006,048
|
|
|
|
1,274,783
|
|
|
|
6,280,831
|
|
|
Accumulated deficit
|
|
|
(7,529
|
)
|
|
|
(1,275,116
|
)
|
|
|
(1,282,645
|
)
|
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements of the Company
are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant
to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared
in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.
Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results
of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments,
consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and
cash flows for the periods presented.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on
March 3, 2021, as well as the Company’s Current Reports on Form 8-K, as filed with the SEC on March 4, 2021 and March 10, 2021.
The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December
31, 2021 or for any future interim periods.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Use of Estimates
The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting 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 financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of March 31, 2021 and December 31, 2020.
Investments Held in Trust Account
At March 31, 2021, the assets held in the
Trust Account were held in money market funds, which were invested in U.S. Treasury securities.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
Common Stock Subject to Possible Redemption
The Company accounts for its common stock subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 Distinguishing
Liabilities from Equity. Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair
value. Conditionally redeemable common stock (including common stock that features 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) is classified
as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features
certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future
events. As of March 31, 2021 and December 31, 2020, 41,008,684 and no 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 condensed
balance sheet, respectively.
Warrant Liabilities
The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC
815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition
of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including
whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period
end date while the warrants are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Public Warrants
was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified
Black-Scholes model (see Note 10).
Offering Costs Associated with the Initial
Public Offering
The Company complies with the requirements of
ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist principally of professional
and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly
attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for
equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting
to $26,216,175 as a result of the Initial Public Offering (consisting of a $9,278,660 underwriting fee, $16,237,655 of deferred underwriting
fees and $699,860 of other offering costs). The Company recorded $24,898,405 of offering costs as a reduction of equity in connection
with the shares of Class A common Stock included in the Units. The Company immediately expensed $1,317,770 of offering costs in connection
with the Public Warrants and Private Placement Warrants that were classified as liabilities.
Income Taxes
The Company complies with the accounting and reporting
requirements of ASC Topic 740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases
of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to
the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing
authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense.
There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 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.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
Net Earnings (Loss) Per Share of Common
Stock
Net earnings (loss) per share is computed by dividing
net earnings by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the
effect of the Warrants sold in the Public Offering and private placement to purchase an aggregate of 22,983,540 shares in the calculation
of diluted loss per share, since the exercise of the Warrants are contingent upon the occurrence of future events and the inclusion of
such Warrants would be anti-dilutive.
The Company’s statement of operations includes
a presentation of net earnings (loss) per share for common shares subject to possible redemption and applies the two-class method in calculating
net earnings (loss) per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by
dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average
number of Class A common stock subject to possible redemption outstanding since original issuance. Net loss per share, basic and diluted,
for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class
A redeemable common stock, by the weighted average number of Class A and Class B non-redeemable common stock outstanding for the period.
Class B non-redeemable common stock includes the Founder Shares as these shares do not have any redemption features and do not participate
in the income earned on the Trust Account.
The following table reflects the calculation of
basic and diluted net earnings (loss) per common share (in dollars, except per share amounts):
|
|
|
Three
Months Ended
March 31,
2021
|
|
|
Class A Common Stock subject to possible redemption
|
|
|
|
|
Numerator: Earnings attributable to Class A Common Stock subject to possible redemption
|
|
|
|
|
Interest income on Trust Account
|
|
$
|
1,509
|
|
|
Less: Interest available to be withdrawn for payment of taxes
|
|
|
(1,509
|
)
|
|
Net earnings attributable to Class A Common Stock subject to possible redemption
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Denominator: Weighted average Class A Common Stock subject to possible redemption
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption
|
|
|
41,008,684
|
|
|
Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
Non-Redeemable Class A and Class B Common Stock
|
|
|
|
|
|
Numerator: Net loss minus net earnings
|
|
|
|
|
|
Net loss
|
|
$
|
(1,004,921
|
)
|
|
Less: Net earnings attributable to Class A Common Stock subject to possible redemption
|
|
|
—
|
|
|
Non-redeemable net loss
|
|
$
|
(1,004,921
|
)
|
|
|
|
|
|
|
|
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock
|
|
|
16,583,011
|
|
|
Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock
|
|
$
|
(0.06
|
)
|
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company
is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The Company applies ASC Topic 820, Fair Value
Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value
within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to
transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants
on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants
would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting
entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the
assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information
available in the circumstances.
The carrying amounts reflected in the balance
sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature.
Level 1 — Assets and liabilities with unadjusted,
quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in
active markets for identical assets or liabilities.
Level 2 — Inputs to the fair value measurement
are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable
inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 — Inputs to the fair value measurement
are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets
or liabilities.
See Note 10 for additional information on assets
and liabilities measured at fair value.
Recent Accounting Standards
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial
statements.
NOTE 4. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 46,393,299 Units, which includes the partial exercise by the underwriters of their over-allotment option in the amount of 1,393,299,
at $10.00 per Unit, generating gross proceeds of $463,932,990. Each Unit consisted of one share of the Company’s Class A common stock,
$0.0001 par value, and one-third of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase
one share of Class A common stock at an exercise price of $11.50 per whole share (see Note 8).
NOTE 5. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 7,333,333 Private Placement Warrants at a price of $1.50 per Private Placement
Warrant (for an aggregate purchase price of $11,000,000). On March 4, 2021, the underwriters notified the Company of their intention
to exercise the over-allotment option in part, resulting in the Sponsor paying an aggregate of $278,661 in exchange for an additional
185,774 Private Placement Warrants. Each Private Placement Warrant is exercisable for one share of Class A common stock at a price of
$11.50 per share. The proceeds from the sale of the Private Placement Warrants 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 proceeds
from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements
of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions
from the Trust Account with respect to the Private Placement Warrants.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
In December 2020, the Sponsor paid $25,000 to
cover certain offering costs of the Company in consideration for 7,187,500 shares of Class B common stock (the “Founder Shares”).
In January 2021, the Company effected a 1:1.20 stock split of Class B common stock, resulting in an aggregate of 8,625,000 shares of Class
B common stock issued and outstanding. In February 2021, the Company effected a 1:1.33 stock split of Class B common stock, resulting
in an aggregate of 11,500,000 shares of Class B common stock issued and outstanding. In March 2021, the Company effected a 1:1.125 stock
split of Class B common stock, resulting in an aggregate of 12,937,500 shares of Class B common stock issued and outstanding. The Founder
Shares include an aggregate of up to 1,687,500 shares subject to forfeiture, on a pro rata basis, to the extent that the underwriter’s
over-allotment is not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s
issued and outstanding shares upon the completion of the Initial Public Offering. On March 5, 2021, the underwriters partially exercised
the over-allotment option to purchase an additional 1,393,299 Units (see Note 7). In April 2021, the remaining portion of the over-allotment
option expired. As a result, 1,339,175 shares of Class B common stock were forfeited (see Note 11).
The Sponsor has agreed that, subject to certain
limited exceptions, the Founder Shares will not be transferred, assigned, sold or released from escrow until the earlier of (a) one year
after the completion of a Business Combination or (b) the date on which the Company completes a liquidation, merger, capital stock exchange
or other similar transaction after a Business Combination that results in all of the Company’s stockholders having the right to
exchange their Class A common stock for cash, securities or other property. Notwithstanding the foregoing, if (i) the closing price of
the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 after the Business Combination
or (ii) if the Company consummates a transaction after the Business Combination which results in the Company’s stockholders having
the right to exchange their shares for cash, securities or other property, the founder shares will be released from the lock-up.
Promissory Note - Related Party
On December 28, 2020, the Company issued an unsecured
promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company received proceeds of $300,000 to cover
expenses related to the Initial Public Offering. The Promissory Note is non-interest bearing and is payable on the earlier of June 30,
2021 or the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $172,558 was repaid on March 9,
2021.
Related Party Loans
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 directors and
officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the
Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account
released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In
the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to
repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except
for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $2,000,000 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.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
Administrative Support Agreement
The Company entered into an agreement, commencing
on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for secretarial and administrative
support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
During the three months ended March 31, 2021, $10,000 of expenses were incurred.
Advance from Related Party
On February 25, 2021, the Sponsor advanced
$1,201,000 to the Company to cover the purchase of additional Private Placement Warrants if the over-allotment was exercised in full.
On March 4, 2021, the underwriters notified the Company of their intention to exercise the over-allotment option in part. Upon the
closing of the over-allotment, the Company utilized the advance from the Sponsor to issue an additional 185,774 Private Placement Warrants
for an aggregate of $278,661. On March 9, 2021, the Company repaid the remaining advance from related party of $922,339.
NOTE 7. COMMITMENTS
Registration Rights
The holders of the Founder Shares, Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise
of the Private Placement Warrants) will have registration rights to require the Company to register a sale of any of its securities held
by them pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding
short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration
rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the
expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option to purchase up to 6,750,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting
discounts and commissions. On March 5, 2021 the underwriters purchased an additional 1,393,299 Units at an offering price of $10.00
per Unit, generating additional gross proceeds of $13,932,990 to the Company. In April 2021, the remaining portion of the underwriters’
over-allotment option expired (see Note 11).
The underwriters were paid a cash underwriting
fee of $0.20 per Unit, or $9,278,660 in the aggregate. In addition, $0.35 per Unit, or $16,237,655 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.
NOTE 8. WARRANTS
Public Warrants may only be exercised for a whole
number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable
on the later of (a) 30 days after the completion of a Business Combination or (b) one year from the closing of the Initial Public Offering.
The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
The Company will not be obligated to deliver any
Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration
statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus
relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from
registration is available. No warrant will be exercisable and the Company will not be obligated to issue a share of Class A common stock
upon exercise of a warrant unless the share of Class A common stock issuable upon such warrant exercise has been registered, qualified
or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable,
but in no event later than 15 business days after the closing of a Business Combination, it 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. The company will use its commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness
of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the
provisions of the warrant agreement. If a registration statement covering the Class A common stock issuable upon exercise of the warrants
is not effective by the sixtieth (60th) business day after the closing of a Business Combination, warrant holders may, until such time
as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration
statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.
Notwithstanding the above, if the Company’s 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 elect, the Company will not be required to file
or maintain in effect a registration statement, and in the event the Company does not so elect, the Company 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.
Once the Public Warrants become exercisable, the
Company may redeem the Public Warrants (except 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 closing price of the Class A common stock equals or exceeds $18.00 per share (as
adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading
day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
|
The Company will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the issuance of the 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 the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Once the Public Warrants become exercisable, the
Company may redeem the Public 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 value (as defined below) of the Company’s Class A common stock
except as otherwise described below;
|
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
|
|
●
|
if, and only if, the closing price of the Company’s Class A common stock equals or exceeds $10.00
per Public Share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days
within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
|
|
|
●
|
if the closing price of the Company’s Class A common stock for any 20 trading days within a 30-trading
day period ending three trading days before the Company sends notice of redemption to the warrant holders is less than $18.00 per share
(as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), the Private Placement Warrants must
also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
The value of the Company’s Class A common
stock shall mean the volume weighted average price of the Company’s 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. This redemption feature differs from the typical
warrant redemption features used in other blank check offerings. The Company will provide its warrant holders with the final value no
later than one business day after the 10 trading day period described above ends. 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).
If the Company calls the Public Warrants for redemption,
management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,”
as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants
may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation.
However, except as described below, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise
price. 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.
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 its 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 its Sponsor or its affiliates, without taking into account any Founder Shares held by its Sponsors 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 Company’s initial Business Combination
on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading
price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which
the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, 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 price described above under “Redemption of warrants when the price per share of Class
A common stock equals or exceeds $18.00” 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 above 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.
The Private Placement Warrants are identical to
the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and the
Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until
30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants
will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees.
If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement
Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
At March 31, 2021, there were 15,464,433
Public Warrants and 7,519,107 Private Placement Warrants outstanding. The Company accounts for the Public Warrants and Private Placement
Warrants in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria
for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial
instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public
Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant
liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted
to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess
the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will
be reclassified as of the date of the event that causes the reclassification.
NOTE 9. STOCKHOLDERS’ EQUITY
Preferred stock — The Company
is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At March 31, 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 up to 380,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the
Class A common stock are entitled to one vote for each share. At March 31, 2021 and December 31, 2020, there were 5,384,615 and no
shares of Class A common stock issued or outstanding, excluding 41,008,684 and no shares of Class A common stock subject to possible redemption,
respectively.
Class B common stock — The
Company is authorized to issue up to 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class
B common stock are entitled to one vote for each share. At March 31, 2021 and December 31, 2020, there were 12,937,500 shares of
Class B common stock issued and outstanding. In April 2021, the remaining portion of the underwriters’ over-allotment option expired.
As a result, 1,339,175 shares of Class B common stock were forfeited (see Note 11).
Holders of Class A common stock and Class B common
stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law. Prior to
an initial Business Combination, holders of Class B common stock will have the right to elect all of the Company’s directors and
may remove members of the board of directors for any reason.
The Class B common stock will automatically convert
into shares of Class A common stock concurrently with or immediately following the consummation of an 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. In the case that additional shares of Class A common stock or equity-linked
securities are issued or deemed issued in connection with an initial Business Combination, the number of shares of Class A common stock
issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares
of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by
public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion
or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the
consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable
for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial Business Combination and
any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of working capital loans, provided that such
conversion of Founder Shares will never occur on a less than one-for-one basis.
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
In January 2021, the Company effected a 1:1.20
stock split of Class B common stock, resulting in an aggregate of 8,625,000 shares of Class B common stock issued and outstanding. In
February 2021, the Company effected a 1:1.33 stock split of Class B common stock, resulting in an aggregate of 11,500,000 shares of Class
B common stock issued and outstanding. In March 2021, the Company effected a 1:1.125 stock split of Class B common stock, resulting in
an aggregate of 12,937,500 shares of Class B common stock issued and outstanding.
NOTE 10. FAIR VALUE MEASUREMENTS
The following table presents information about
the Company’s financial assets that are measured at fair value on a recurring basis at March 31, 2021, and indicates the fair
value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
Description
|
|
Amount at Fair Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market investments
|
|
$
|
463,934,695
|
|
|
$
|
463,934,695
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liability – Public Warrants
|
|
$
|
22,732,717
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,732,717
|
|
|
Warrant liability – Private Placement Warrants
|
|
$
|
11,053,088
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,053,088
|
|
The Company utilizes a Monte Carlo simulation
model to value the Public Warrants and a Modified Black-Scholes model to value the Private Placement Warrants at each reporting period,
with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liabilities are determined
using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected
life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility
that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield
curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed
to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates
to remain at zero.
There were no transfers between Levels 1, 2 or
3 during the three months ended March 31, 2021.
The following table provides the significant unobservable
inputs used in the Monte Carlo Simulation to measure the fair value of the Public Warrants:
|
|
|
At March 4, 2021 (Initial Measurement)
|
|
|
As of March 31,
2021
|
|
|
Stock price
|
|
|
10.03
|
|
|
|
9.95
|
|
|
Strike price
|
|
|
11.50
|
|
|
|
11.50
|
|
|
Probability of completing a Business Combination
|
|
|
83.0
|
%
|
|
|
83.0
|
%
|
|
Expected life of the option to convert (in years)
|
|
|
6.6
|
|
|
|
6.5
|
|
|
Volatility
|
|
|
5.0% pre-merger /
23.5% post-merger
|
|
|
|
4.5% pre-merger /
23.5% post-merger
|
|
|
Risk-free rate
|
|
|
1.1
|
%
|
|
|
1.3
|
%
|
|
Fair value of warrants
|
|
|
1.49
|
|
|
|
1.47
|
|
TCW SPECIAL PURPOSE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
The following table provides the significant unobservable
inputs used in the Modified Black-Scholes model to measure the fair value of the Private Placement Warrants:
|
|
|
At
March 4, 2021
(Initial Measurement)
|
|
|
As of
March 31,
2021
|
|
|
Stock price
|
|
|
10.03
|
|
|
|
9.95
|
|
|
Strike price
|
|
|
11.50
|
|
|
|
11.50
|
|
|
Probability of completing a Business Combination
|
|
|
83.0
|
%
|
|
|
83.0
|
%
|
|
Dividend yield
|
|
|
—
|
%
|
|
|
—
|
%
|
|
Remaining term (in years)
|
|
|
6.6
|
|
|
|
6.5
|
|
|
Volatility
|
|
|
20.1
|
%
|
|
|
20.0
|
%
|
|
Risk-free rate
|
|
|
1.1
|
%
|
|
|
1.3
|
%
|
|
Fair value of warrants
|
|
|
1.49
|
|
|
|
1.47
|
|
The following table provides a summary of the
changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis:
|
|
|
Private Placement
|
|
|
Public
|
|
|
Warrant Liabilities
|
|
|
Fair value as of December 31, 2020
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Initial measurement at March 4, 2021
|
|
|
10,926,670
|
|
|
|
22,350,000
|
|
|
|
33,276,670
|
|
|
Initial measurement of over-allotment warrants
|
|
|
276,805
|
|
|
|
692,005
|
|
|
|
968,810
|
|
|
Change in valuation inputs or other assumptions
|
|
|
(150,387
|
)
|
|
|
(309,288
|
)
|
|
|
(459,675
|
)
|
|
Fair value as of March 31, 2021
|
|
$
|
11,053,088
|
|
|
$
|
22,732,717
|
|
|
$
|
33,785,805
|
|
The Company recognized gains in connection with
changes in the fair value of warrant liabilities of $459,675 within change in fair value of warrant liabilities in the Statement of Operations
during the three months ended March 31, 2021.
NOTE 11. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review,
other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in
the condensed financial statements.
The Company granted the underwriters a 45-day
option to purchase up to 6,750,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting
discounts and commissions. On March 5, 2021 the underwriters purchased an additional 1,393,299 Units at an offering price of $10.00
per Unit, generating additional gross proceeds of $13,932,990 to the Company. In April 2021, the remaining portion of the underwriters’
over-allotment option expired. As a result, 1,339,175 shares of Class B common stock were forfeited.