Form 10-Q Silver Spike Acquisition For: Jun 30
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2022
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
Commission file number 001-40182
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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(Address of principal executive offices, including zip code)
(212 ) 905-4923
Registrant’s Telephone Number, Including Area Code
N/A
(Former name, former address and former fiscal year, if changed since last report)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on
which registered
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit such files).Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,”
“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☐
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒ No ☐
As of August 12, 2022, there were 28,750,000 Class A ordinary shares, $0.0001 par value per share, and 7,187,500 Class B ordinary shares, $0.0001 par value per share, issued and outstanding.
PART 1 – FINANCIAL INFORMATION
SILVER SPIKE ACQUISITION CORP II
CONDENSED
BALANCE SHEETS
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June 30, 2022
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December 31,
2021
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ASSETS
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Unaudited | |||||||
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Current assets
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Cash
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$
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$ |
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Prepaid expenses
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Total Current Assets
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Marketable securities held in Trust Account
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TOTAL ASSETS
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$
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$
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LIABILITIES AND SHAREHOLDERS’ DEFICIT
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||||||||
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Current liabilities:
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Accounts payable and accrued expenses
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$
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$
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Total Current Liabilities
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Warrant liabilities
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Deferred underwriting fee payable
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Total Liabilities
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Commitments and Contingencies
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Class A ordinary shares subject to possible redemption,
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Shareholders’ Deficit
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Preference shares, $
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Class A ordinary shares, $
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Class B ordinary shares, $
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Additional paid-in capital
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Accumulated deficit
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(
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)
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(
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)
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Total Shareholders’ Deficit
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(
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)
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(
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)
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
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$
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$
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The accompanying notes are an integral part of the unaudited condensed financial statements.
SILVER SPIKE ACQUISITION CORP II
(Unaudited)
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Three Months
Ended
June 30,
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Six Months
Ended
June 30,
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|||||||||||||||
| 2022 |
2021 |
2022 |
2021 |
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Formation and operational costs
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$
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$ |
$
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$ | ||||||||||
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Loss from operations
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(
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)
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( |
) |
(
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)
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( |
) | ||||||||
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Other income (expense):
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||||||||||||||||
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Interest earned on marketable securities held in Trust Account
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||||||||||||||
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Change in fair value of warrant liabilities
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( |
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Broken deal fees income (loss)
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||||||||||||||||
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Unrealized loss on marketable securities held in Trust Account
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( |
) | ( |
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Total other income (expense), net
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( |
) |
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( |
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||||||||||||||||
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Net income (loss)
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$
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$ |
( |
) |
$
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$ | ( |
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Basic weighted average shares outstanding, Class A Ordinary Shares subject to possible redemption
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||||||||||||||
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Basic net income (loss) per common share, Class A Ordinary Shares subject to possible redemption
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$
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$ |
( |
) |
$
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$ | ( |
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Basic weighted average shares outstanding, Class B Ordinary Shares subject to possible redemption
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Basic net income (loss) per share, Class B Ordinary Shares
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$
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$ |
( |
) |
$
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$ | ( |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
SILVER SPIKE ACQUISITION CORP II
(Unaudited)
FOR THE THREE AND SIX
MONTHS ENDED JUNE 30, 2022
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Class B
Ordinary Shares
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Additional
Paid-in
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Accumulated
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Total Shareholders’
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||||||||||||||||
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Shares
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Amount
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Capital
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Deficit
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Deficit
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Balance – January 1, 2022
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$
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$
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$
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(
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)
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$
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(
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)
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|||||||||
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Remeasurement for Class A ordinary shares to redemption amount
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—
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Net income
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—
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Balance – March 31, 2022
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$
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$
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$
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(
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)
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$
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(
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)
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|||||||||
| Remeasurement for Class A ordinary shares to redemption amount |
— | ( |
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| Net income |
— | |||||||||||||||||||
| Balance – June 30, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
FOR THE THREE AND SIX
MONTHS ENDED JUNE 30, 2021
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Class B
Ordinary Shares
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Additional
Paid-in
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Accumulated
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Total Shareholders’
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||||||||||||||||
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Shares
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Amount
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Capital
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Deficit
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Deficit
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Balance – January 1, 2021
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$
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$
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$
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(
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)
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$
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Remeasurement for Class A ordinary shares to redemption amount
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—
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(
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)
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(
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(
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Net income
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—
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Balance – March 31, 2021
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$
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$
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$
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$
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(
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)
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$
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(
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)
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||||||||
| Remeasurement for Class A ordinary shares to redemption amount |
— | ( |
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| Net loss |
— | ( |
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| Balance – June 30, 2021 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
SILVER SPIKE ACQUISITION CORP II
(Unaudited)
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For the Six
Months Ended
June 30,
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For the Six
Months Ended
June 30,
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2022
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2021
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Cash Flows from Operating Activities:
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Net income (loss)
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$
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$
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(
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)
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Adjustments to reconcile net income (loss) to net cash used in operating activities:
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Change in fair value of warrant liabilities
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(
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)
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Interest earned on marketable securities held in Trust Account
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(
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)
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(
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)
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Unrealized loss on marketable securities held in Trust Account
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Transaction costs incurred in connection with Initial Public Offering
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Changes in operating assets and liabilities:
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||||||||
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Prepaid expenses
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(
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)
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|||||
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Accounts payable and accrued expenses
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Net cash used in operating activities
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(
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(
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Cash Flows from Investing Activities:
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Investment of cash into Trust Account
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(
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)
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Net cash used in investing activities
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(
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)
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Cash Flows from Financing Activities:
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Proceeds from sale of Units, net of underwriting discounts paid
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Proceeds from sale of Private Placement Warrants
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Proceeds from promissory note – related party
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Repayment of due to/from – related party
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(
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)
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|||||
| Repayment of promissory note – related party |
( |
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Payment of offering costs
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(
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)
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Net cash (used in) provided by financing activities
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(
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)
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Net Change in Cash
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(
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)
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|||||
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Cash – Beginning
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||||||
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Cash – Ending
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$
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$
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Non-cash investing and financing activities:
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||||||||
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Offering costs included in accrued offering costs
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$
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$
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Initial classification of Class A ordinary shares subject to possible redemption
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$
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$
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||||
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Remeasurement for Class A ordinary shares to redemption amount
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$
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$
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||||
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Deferred underwriting fee payable
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$
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$
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||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
NOTE 1. DESCRIPTION OF
ORGANIZATION
AND BUSINESS OPERATIONS
Silver Spike
Acquisition Corp II (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on September 2, 2020. The Company was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses (“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 June 30, 2022, the Company had not commenced any
operations. All activity through June 30, 2022 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and, after the Initial Public Offering, identifying a target company for a
Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the marketable
securities held in the Trust Account (as defined below).
The registration
statement for the Company’s Initial Public Offering was declared effective on March 10, 2021. On March 15, 2021, the Company consummated the Initial Public Offering of 25,000,000 units and, together with the full exercise by the underwriters of the over-allotment option to purchase an additional 3,750,000 units on March 23, 2021, sold a total of 28,750,000 units (the
“Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”) at $10.00 287,500,000 , which is described in Note 3.
Simultaneously with
the closing of the Initial Public Offering, the Company consummated the sale of 5,166,667 warrants (the “Private Placement
Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to Silver Spike Sponsor, LLC (the “Sponsor”),
generating gross proceeds of $7,750,000 , which is described in Note 4.
Transaction costs
amounted to $16,328,950 , consisting of $5,750,000
of underwriting fees, $10,062,500 of deferred underwriting fees and $516,450 of other offering costs.
Following the closing
of the Initial Public Offering on March 15, 2021 and the full exercise by the underwriters of the over-allotment option on March 23, 2021, an amount of $287,500,000 ($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 invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the
Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of the Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, 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 sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied
generally toward consummating a Business Combination. Nasdaq rules provide that the Business Combination must be with one or more
target businesses that together have an aggregate fair market value of at least 80 % of the assets held in the Trust Account
(excluding any deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the
post-Business Combination 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 business 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.
The Company will
provide its shareholders 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 shareholder meeting called to approve the Business Combination or (ii)
by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be
entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share) as of business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account
and not previously released to the Company to pay its tax obligations. The per-share amount to be distributed to shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the
underwriters (as discussed in Note 6). 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, after payment of the deferred underwriting commission, of at least $5,000,001
upon such completion of a Business Combination and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of
the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its
Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same
information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its
Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination and to waive its redemption rights with respect to any such shares in connection with
a shareholder vote to approve a Business Combination or seek to sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, subject to the immediately succeeding paragraph, each public shareholder
may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
If the Company seeks
shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder 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 15 % or more of the Public Shares without the Company’s prior written consent.
The Sponsor has
agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination (and not seek to sell its shares to the Company in any tender offer the
Company undertakes in connection with its initial Business Combination) and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow
redemption in connection with our initial business combination or to redeem 100 % of the Public Shares if the Company does not
complete a Business Combination within 18 months from the closing of the Public Offering or (ii) with respect to any other provision
relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment and (c) that the
Founder Shares shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the Sponsor will be entitled to liquidating distributions from the Trust Account with respect to any
Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination.
The Company will have
until March 15, 2023 (the “Combination Period”) to consummate a Business Combination. 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 no more than 10 business days thereafter, redeem 100% of the outstanding
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 (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 outstanding Public Shares, which redemption will
completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the
remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. The
underwriters have agreed to waive their rights to the deferred underwriting commission 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 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 ).
The Sponsor has
agreed that it will be liable to the Company, if and to the extent any claims by a third party (other than the Company’s independent auditors) 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) such 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 trust assets, in each case net of the interest which may be withdrawn
to pay taxes, except as 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”). 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 (other than the Company’s independent auditors), 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.
On January 20, 2022, Silver Spike Acquisition Corp II, an exempted company incorporated in the Cayman Islands with limited liability (“Silver Spike” or “SPAC”), entered into a Business Combination Agreement and Plan of Merger (the
“Business Combination Agreement”) by and among Silver Spike, Silver Spike Merger Sub II, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Silver Spike (“Merger Sub 1”), Eleusis Inc., a Delaware corporation (“HoldCo”),
Eclipse Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of HoldCo (“Merger Sub 2”), and Eleusis Holdings Limited, a company incorporated under the laws of England and Wales with company number 10809365
(“Eleusis”). On June 9, 2022, Silver Spike and Merger Sub 1 entered into a Termination and Release Agreement (the “Termination Agreement”), pursuant
to which Silver Spike and Eleusis mutually agreed to terminate the Business Combination Agreement effective immediately.
Liquidity, Capital Resources and
Going Concern
As of June 30, 2022, the Company had $433,813 in its operating bank accounts, $287,850,478
in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and working deficit of $907,862 . As of June 30, 2022, approximately $434,278 of the
amount on deposit in the Trust Account represented interest income.
Until the consummation of a Business Combination, the Company will be
using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to
acquire, and structuring, negotiating and consummating the Business Combination.
The Company will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company’s officers, directors and
Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not
be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations,
suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise
substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date that the financial statement are issued. These financial statements do not include any adjustments relating to the recovery of
the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
In connection with the Company’s assessment of going
concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until
March 15, 2023, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory
liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial
doubt about the Company’s ability to continue as a going concern. Management intends to complete the Business Combination prior to the termination date. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March
15, 2023.
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 condensed financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of
these condensed financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these condensed financial statements.
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in
the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (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.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as
filed with the SEC on March 31, 2022. The interim results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 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 auditor 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 shareholder 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 the condensed 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 condensed financial statements and the
reported amounts of 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant
liabilities. Such estimates may be subject to change as more current information becomes available and 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 no
Marketable Securities Held in Trust Account
At June 30, 2022 and December 31, 2021, the assets held in the Trust Account were held in U.S. Treasury Bills and money market funds which
primarily invest in U.S. Treasury Bills. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period.
Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed statements of operations. The estimated
fair values of investments held in Trust Account are determined using available market information.
Warrant Liabilities
The Company accounts for Public Warrants (as defined Note 3) and Private Placement Warrants (together, with the Public Warrants, the
“Warrants”) as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“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 ordinary shares and whether the
warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, 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 for periods where no observable traded price was available and the fair value of the Private Warrants was estimated using a Modified Black-Scholes model. For periods subsequent to the detachment of the Public
Warrants from the Units, the close price of the Public Warrant price was used as the fair value as of each relevant date (see Note 9).
Offering Costs
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5-A – Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the Initial Public Offering that are related to the Initial Public
Offering. Transaction costs related to equity instruments of the Company are charged against the aggregate offering proceeds. Transaction costs related to the issuance of equity-like instruments which the Company classifies as derivative
liabilities are immediately expensed concurrent with the Initial Public Offering. In the event that the issuance of two or more instruments are deemed to constitute one in the same transaction, the Company allocates the transaction costs
between the constituent components pro rata according to the fair value of each component.
Offering costs associated with the
Class A ordinary shares were initially charged to temporary equity and then accreted to ordinary shares subject to redemption upon the completion of the Initial Public Offering. Transaction costs amounted to $16,328,950 , of which $467,695 were
allocated to expense associated with the warrant liabilities. To the extent that the aggregate proceeds from the issuance of an instrument which is classified by the Company as a derivative liability is less than the fair market value
determination of such liability, the amount of such liability in excess of the aggregate issuance proceeds is immediately recorded as compensation expense.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a
liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares 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, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain
redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are presented at redemption value as
temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets.
The Company
recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of
redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
At June 30, 2022 and December 31, 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the
following table:
|
Class A ordinary
shares subject to
possible redemption
|
||||
|
Gross proceeds
|
$
|
|
||
|
Less:
|
||||
|
Proceeds allocated to Public Warrants
|
(
|
)
|
||
|
Class A ordinary shares issuance costs
|
(
|
)
|
||
|
Plus:
|
||||
|
Accretion of carrying value to redemption value
|
|
|||
|
Accretion of carrying value to redemption value – Over-Allotment
|
|
|||
|
Class A ordinary shares subject to possible redemption - December 31, 2021
|
|
|
||
|
Remeasurement of Class A ordinary shares subject to possible redemption:
|
||||
| Class A Ordinary shares subject to possible redemption - June 30, 2022: |
$ |
|||
Income Taxes
The Company accounts for income taxes under ASC 740,
“Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future
tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in
income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax
expense. There were no no
The Company is considered an exempted Cayman Islands
Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero
Net Income (Loss) Per Ordinary Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares
outstanding for the period. Remeasurement associated with the redeemable Class A ordinary shares is excluded from income (loss) per ordinary share as the redemption value approximates fair value.
The
calculation of diluted income per ordinary share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the
occurrence of future events. The warrants are exercisable to purchase 12,354,167 Class A ordinary shares in the aggregate. As of
June 30, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income
(loss) per ordinary share is the same as basic net income (loss) per ordinary shares for the periods presented.
The following table reflects the calculation of basic and
diluted net income (loss) per ordinary share (in dollars, except per share amounts):
|
|
Three Months Ended
|
Six Months Ended | ||||||||||||||||||||||||||||||
|
|
June 30, 2022
|
June 30, 2021
|
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||||||||
|
|
Class A
|
Class B
|
Class A
|
Class B
|
Class A |
Class B |
Class A |
Class B |
||||||||||||||||||||||||
|
Basic and diluted net income (loss) per ordinary share
|
||||||||||||||||||||||||||||||||
|
Numerator:
|
||||||||||||||||||||||||||||||||
|
Allocation of net income (loss), as adjusted
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$ |
$ |
$ |
( |
) | $ |
( |
) | ||||||||||||||
|
Denominator:
|
||||||||||||||||||||||||||||||||
|
Basic and diluted weighted average ordinary share outstanding
|
|
|
|
|
||||||||||||||||||||||||||||
|
Basic and diluted net income (loss) per ordinary share
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$ |
$ |
$ |
( |
) | $ |
( |
) | ||||||||||||||
Concentration of Credit Risk
Financial instruments that potentially subject the Company
to concentrations of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management
believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities,
which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed financial statements, primarily due to their short-term nature, except for warrant
liabilities (see Note 9).
Fair Value Measurements
Fair value is defined as the price that would be received
for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers
include:
|
|
●
|
Level 1, defined as observable inputs such as quoted prices
(unadjusted) for identical instruments in active markets;
|
|
●
|
Level 2, defined as inputs other than quoted prices in active
markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
|
|
●
|
Level 3, defined as unobservable inputs in which little or no market
data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
In some circumstances, the inputs used to measure fair
value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the
fair value measurement.
Derivative Financial Instruments
The Company evaluates its financial instruments to
determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the
derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheets as current or non-current based on whether or not
net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheets date.
Recently Issued 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 condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the
Initial Public Offering, the Company sold 28,750,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary
share and of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50
per whole share (see Note 8).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with
the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 5,166,667 Private Placement Warrants at a purchase
price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $7,750,000 . 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. Each
Private Placement Warrant is exercisable for one Class A Share at a price of $11.50 per share, subject to adjustment (see Note 8). If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of
the Private Placement Warrants held in the Trust Account 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.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In September 2020,
the Company issued an aggregate of 7,187,500 Class B ordinary shares (the “Founder Shares”) to the Sponsor for an aggregate purchase
price of $25,000 . The Founder Shares will automatically convert into Class A ordinary shares on the first business day following the
completion of a Business Combination on a one -for-one basis, subject to certain adjustments, as described in Note 9.
The Founder Shares
included an aggregate of up to 937,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’
over-allotment was not exercised in full or in part, so that the number of Founder Shares would collectively represent 20 % of the
Company’s issued and outstanding shares upon the completion of the Initial Public Offering. As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are currently subject to forfeiture.
The Sponsor has
agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier of: (A) one year
after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading
day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation,
merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Administrative Services Agreement
The Company entered into an agreement whereby, commencing on March 10, 2021, the Company will pay the Sponsor up to $20,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company
will cease paying these monthly fees. For the three and six months ended June 30, 2021, the Company incurred $60,000 and $80,000 in fees for these services, respectively, of which amounts are included in accounts payable and accrued expenses in the accompanying
condensed balance sheets. For the three and six months ended June 30, 2022, the Company incurred $60,000 and $120,000 in fees for these services, respectively, of which $248,969 of such fees are included in accounts payable and accrued expenses in the accompanying condensed balance sheets.
Promissory Note – Related Party
On September 18,
2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $250,000 . The Promissory Note is non-interest bearing and payable on the earlier of (i) March 31, 2021 or (i) the consummation of the Proposed Public Offering. As of June 30, 2022 and
December 31, 2021, there no
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 officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants. 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. As of June 30, 2022 and December 31, 2021, there were no
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a
registration rights agreement entered into on March 10, 2021, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of the Working Capital Loans (and any Class A ordinary shares issuable
upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such
securities for resale. The holders of these securities will be entitled to make up to three demands, excluding short form
registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and
rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the
Securities Act 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
paid a cash underwriting discount of $0.20 per Unit, or $5,750,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35
per Unit, or $10,062,500 in the aggregate, which 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.
Business Combination
On January 20, 2022, Silver Spike Acquisition Corp II, an exempted company incorporated in the Cayman Islands with limited liability
(“Silver Spike” or “SPAC”), entered into a Business Combination Agreement and Plan of Merger (the “Business Combination Agreement”) by and among Silver Spike, Silver Spike Merger Sub II, Inc., a Delaware corporation and a direct, wholly
owned subsidiary of Silver Spike (“Merger Sub 1”), Eleusis Inc., a Delaware corporation (“HoldCo”), Eclipse Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of HoldCo (“Merger Sub 2”), and Eleusis Holdings
Limited, a company incorporated under the laws of England and Wales with company number 10809365 (“Eleusis”). On June 9, 2022, Silver Spike and Merger Sub 1 entered into a Termination and Release Agreement (the “Termination Agreement”), pursuant to which Silver Spike and Eleusis mutually agreed to terminate the Business Combination Agreement effective immediately.
NOTE 7. SHAREHOLDERS’ DEFICIT
Preferred Shares
The Company is
authorized to issue 1,000,000 preference shares with a par value of $0.0001 . The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special
rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without shareholder approval, issue preferred shares with voting and other rights that could
adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. At June 30, 2022 and December 31, 2021, there were no
Class A Ordinary Shares
The Company is
authorized to issue 200,000,000 0.0001 one
vote for each share. At June 30, 2022 and December 31, 2021, there were 28,750,000
Class B Ordinary Shares
The Company is
authorized to issue 20,000,000 0.0001 one
vote for each share. At June 30, 2022 and December 31, 2021, there were 7,187,500
NOTE 8. WARRANT LIABILITIES
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 30 days after the completion of a Business Combination. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not
be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance
of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption
from registration is available. 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 is available.
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 it commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement for the registration, under the Securities Act, of
the Class A ordinary shares 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 or redemption of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants
is not effective by the sixtieth (60 th) 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 Class A ordinary shares 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 we do 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.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00 .
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants):
| ● |
in whole and not in part;
|
| ● |
at a price of $
|
| ● |
upon not less than
|
| ● |
if, and only if, the last
reported sale price of the Class A ordinary shares for any
|
If and when the
Public 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 Class A ordinary share equals or exceeds $10.00 .
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
| ● |
in whole and not in part;
|
| ● |
at $
|
| ● |
if, and only if, the Reference
Value equals or exceeds $
|
| ● |
if the Reference Value is less
than $
|
The exercise price
and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or
consolidation. However, except as described above, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the
Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with
respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x)
the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (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 a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its 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 $10.00 and $18.00 per share redemption trigger price will be
adjusted (to the nearest cent) to be equal to 100 % and 180 % of the higher of the Market Value and the Newly Issued Price, respectively.
The Private Placement
Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Placement Warrants and the Class A ordinary shares 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, except as described above, 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.
NOTE 9. FAIR VALUE MEASUREMENTS
The Company follows
the guidance in ASC Topic 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least
annually.
The fair value of the
Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly
transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent
sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the
observable inputs and unobservable inputs used in order to value the assets and liabilities:
| ● |
Level 1: Quoted prices in active
markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing
basis.
|
| ● |
Level 2: Observable inputs other
than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
| ● |
Level 3: Unobservable inputs
based on the Company assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The following table
presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
Description
|
Level
|
June 30, 2022
|
December 31, 2021
|
|||||||||
|
Assets:
|
||||||||||||
|
Marketable securities held in Trust Account
|
1
|
$
|
|
$
|
|
|||||||
|
Liabilities:
|
||||||||||||
|
Warrant Liabilities – Public Warrants
|
1
|
|
|
|||||||||
|
Warrant Liabilities – Private Placement Warrants
|
3
|
|
|
|||||||||
The Warrants are
accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the condensed balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in
fair value presented within change in fair value of warrant liabilities in the condensed statements of operations.
The Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair
value measurement. The Modified Black Scholes model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the ordinary shares. The expected volatility as of the
Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own
Public Warrant pricing. A Monte Carlo simulation methodology was used in estimating the fair value of the Public Warrants for periods where no observable traded price was available, using the same expected volatility as was used in measuring
the fair value of the Private Placement Warrants. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value as of each relevant date. The measurement
of the Public Warrants after the detachment of the Public Warrants from the Units is classified as Level 1 due to the use of an observable market quote in an active market.
The key inputs into the Monte Carlo
simulation as of June 30, 2022
and December 31, 2021 were as follows:
|
Input
|
June 30, 2022
|
December 31, 2021
|
||||||
|
Risk-free interest rate
|
|
%
|
|
%
|
||||
|
Expected term (years)
|
|
|
||||||
|
Expected volatility
|
|
%
|
|
%
|
||||
|
Exercise price
|
|
|
||||||
|
Fair value of Units
|
|
|
||||||
The following tables
summarize the changes in the fair value of the Level 1 Public Warrants & Level 3 Private Warrants warrant liabilities:
|
Public Warrants
|
Private Warrants
|
Warrant Liabilities
|
||||||||||
| Level 1 |
Level 3 |
|||||||||||
|
Fair value as of January 1, 2021
|
$
|
|
$
|
|
$
|
|
||||||
|
Change in fair value
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Fair value as of March 31, 2022
|
|
|
|
|||||||||
| Change in fair value |
( |
) | ( |
) | ( |
) | ||||||
| Fair value as of June 30, 2022 | ||||||||||||
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated
subsequent events and transactions that occurred after the balance sheets date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have
required adjustment or disclosure in the condensed financial statements.
| ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Silver Spike Acquisition Corp II References to our “management” or our “management team” refer to our
officers and directors, and references to the “Sponsor” refer to Silver Spike Sponsor LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act
that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for
future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such
forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially
from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements,
please refer to the Risk Factors section of the final prospectus for our Initial Public Offering filed with the SEC on March 12, 2021. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except
as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in the Cayman Islands on September 2, 2020 formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share
purchase, reorganization or similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering, our shares, debt or a combination of cash,
shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete business combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through June 30, 2022 were organizational activities, those necessary to prepare
for the IPO, and, after the IPO, identifying a target for our Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate non-operating income in the form of
interest income on marketable securities. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a
Business Combination.
For the three months ended June 30, 2022, we had a net income of $3,659,895, which consists of change in fair value of warrant liabilities of $3,088,542, interest earned on marketable securities
held in the Trust Account of $368,551, offset by formation and operational costs of $265,209 an unrealized loss on marketable securities held in the Trust Account of $125,779 and a broken deal income of $593,790.
For the six months ended June 30, 2022, we had a net income of $9,888,470, which consists of change in fair value of warrant liabilities of $10,130,417 and interest earned on marketable
securities held in the Trust Account of $434,278, offset by the operational costs of $1,134,454, an unrealized loss on marketable securities held in the Trust Account of $140,561 and broken deal income of $593,790.
For the three months ended June 30, 2021, we had a net loss of $5,391,776, which consists of operational costs of $209,522 and change in fair value of warrant liabilities of $5,188,750, offset
by interest earned on marketable securities held in Trust Account of $6,496.
For the six months ended June 30, 2021, we had a net loss of $3,360,334, which consists of operational costs of $740,789 and change in fair value of warrant liability of $2,634,791, offset by
interest earned on marketable securities held in Trust Account of $15,246.
Liquidity, Capital Resources and Going Concern
On March 15, 2021, together with the full exercise by the underwriters of the over-allotment option on March 23, 2021, we consummated the IPO of 28,750,000 Units, at a price of $10.00 per unit,
generating gross proceeds of $287,750,000. Simultaneously with the closing of the IPO, we consummated the sale of 5,166,667 private placement warrants to our sponsor at a price of $1.50 per warrant, generating gross proceeds of $7,750,000.
Following the IPO and the sale of the private placement warrants, a total of $287,500,000 was placed in the trust account. We incurred $16,328,950 in transaction costs, including $5,750,000 of
underwriting fees, $10,062,500 of deferred underwriting fees and $516,450 of other offering costs.
For the six months ended June 30, 2022, cash used in operating activities was $370,089. Net income of $9,883,470 was affected by interest earned on marketable securities held in the Trust
Account of $434,278, a change in the fair market value of the warrant liabilities of $10,130,417, an unrealized loss on marketable securities held in the Trust Account of $140,561 and a forgiveness of fees incurred of $593,790, and changes in
operating assets and liabilities, which provided $171,575 of cash for operating activities.
For the six months ended June 30, 2021, cash used in operating activities was $380,006. Net loss of $3,360,334 was affected by interest earned on marketable securities held in the Trust Account
of $15,246, a change in the fair market value of the warrant liabilities of $2,634,791, offset by transaction costs in connection with the warrant liabilities of $467,695, and changes in operating assets and liabilities, which used $106,912 of cash
for operating activities.
As of June 30, 2022, we had marketable securities held in the trust account of $287,850,478. We intend to use substantially all of the funds held in the trust account, including any amounts
representing interest earned on the trust account (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our Business Combination. To the extent that our share capital is used, in whole or in
part, as consideration to complete a Business Combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our
growth strategies.
As of June 30, 2022, we had cash of $433,813 held outside the trust account. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses,
perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of
prospective target businesses, structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our sponsor or an affiliate of our sponsor or certain of our officers and
directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working
capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant unit at
the option of the lender. The warrants would be identical to the private placement warrants.
We will need to raise additional capital through loans or additional investments from our Sponsor, shareholders, officers, directors, or third parties. Our officers, directors and Sponsor may,
but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we
are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and
reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern for at
least one year from the date that the financial statement are issued.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of
Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until March 15, 2023, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If
a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination
not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. Management intends to complete the Business Combination prior to the termination date. No adjustments have been
made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March 15, 2023.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2022. We do not participate in transactions that create relationships with
unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our Sponsor a monthly fee of $20,000 for office
space, and administrative and support services, provided to the Company. We began incurring these fees on March 10, 2021 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s
liquidation.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $10,062,500 in the aggregate, which will become payable to the underwriters from the amounts held in the Trust Account
solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could
materially differ from those estimates. We have identified the following critical accounting policies:
Warrant Liabilities
We account for the warrants issued in connection with our Initial Public Offering in accordance with the guidance contained in ASC 815-40-15-7D under which the warrants do not meet the criteria
for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. The fair value of the Public Warrants was estimated using a Monte Carlo simulation approach for periods where no observable traded price
was available and the fair value of the Private Warrants was estimated using a Modified Black-Scholes model. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the
fair value as of each relevant date.
Class A Ordinary Shares Subject to Redemption
We account for our ordinary shares subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares 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 our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary
shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as
temporary equity, outside of the shareholders’ equity section of our condensed balance sheets.
Net Income (Loss) per Ordinary Share
Net income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding for the period. Remeasurement associated with the redeemable shares
of Class A ordinary shares is excluded from income per ordinary share as the redemption value approximates fair value.
Recent Accounting Pronouncements
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 (“ASU 2020-06”), 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 simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021.
Adoption of ASU 2020-06 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 our condensed financial statements.
| ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Not required for smaller reporting companies.
| ITEM 4. |
CONTROLS AND PROCEDURES
|
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the
time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the
effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive
officer and principal financial and accounting officer have concluded that, due to the events that led to the Company’s restatement of its financial statements to reclassify all complex financial instruments to temporary equity from permanent
equity and over-allotment liability, during the period covered by this report, a material weakness existed and our disclosure controls and procedures were not effective. As a result, we performed additional analysis as deemed necessary to ensure
that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form 10-Q present fairly in all material respects our
financial position, results of operations and cash flows for the period presented.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2022 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. Management has identified a material weakness for complex financial instruments, as described above. In light of the material weakness identified and the resulting restatement, although we
have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the
complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party
professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
PART II – OTHER INFORMATION
| ITEM 1. |
LEGAL PROCEEDINGS
|
None.
| ITEM 1A. |
RISK FACTORS
|
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our final prospectus for our Initial Public Offering filed
with the SEC on March 12, 2021. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem
immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our final prospectus for our Initial Public Offering filed with the SEC
on March 12, 2021, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by negative impacts on the global
economy, capital markets or other geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities
United States and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent invasion of Ukraine by Russia in February 2022. In
response to such invasion, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and
restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain
countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine during the ongoing military conflict, increasing geopolitical tensions with Russia. The invasion of Ukraine by Russia
and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created global security concerns that could have a lasting impact on
regional and global economies. Although the length and impact of the ongoing military conflict in Ukraine is highly unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices, credit and
capital markets, as well as supply chain interruptions. Additionally, Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital
markets.
Any of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine and
subsequent sanctions, could adversely affect our search for a business combination and any target business with which we ultimately consummate a business combination. The extent and duration of the Russian invasion of Ukraine, resulting sanctions
and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global
scale. Any such disruptions may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities, cross-border transactions or our ability to raise equity
or debt financing in connection with any particular business combination. If these disruptions or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a
target business with which we ultimately consummate a business combination, may be materially adversely affected.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including
our ability to negotiate and complete our Business Combination and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to
comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also
change from time to time and those changes could have a material adverse effect on the business, investments and results of our operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have
a material adverse effect on our business, including our ability to negotiate and complete our Business Combination and results of operations.
On March 30, 2022, the SEC issued proposed rules (the “2022 Proposed Rules”) relating to, among other items, enhancing
disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively limiting the use of projections in SEC
filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under
the Investment Company Act. The 2022 Proposed Rules, if adopted, whether in the form proposed or in revised form, and certain positions and legal conclusions expressed by the SEC in connection with the 2022 Proposed Rules may materially adversely
affect our ability to negotiate and complete our Business Combination and may increase the costs and time related thereto.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
On March 15, 2021, together with the full exercise by the underwriters of the over-allotment option on March 23, 2021, we consummated our Initial Public Offering of 28,750,000 Units, at a
price of $10.00 per Unit, generating total gross proceeds of $287,500,000. Credit Suisse and Stifel, Nicolaus & Company acted as joint book-running managers. The securities sold in the offering were registered under the Securities Act on
registration statements on Form S-1 (No. 333-252803). The SEC declared the registration statements effective on March 10, 2021.
Simultaneously with the consummation of the Initial Public Offering, we consummated a private placement of 5,166,667 Private Placement Warrants to our Sponsor at a price of $1.50 per Private
Placement Warrant, generating total proceeds of $7,750,000. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
The Private Placement Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering except that the Private Placement Warrants are not transferable,
assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are
held by the initial purchasers or their permitted transferees.
Of the gross proceeds received from the Initial Public Offering, $287,500,000 was placed in the Trust Account.
We paid a total of $5,750,000 in underwriting discounts and commissions and $516,450 for other offering costs and expenses related to the Initial Public Offering. In addition, the underwriters
agreed to defer $10,062,500 in underwriting discounts and commissions.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
None.
| ITEM 4. |
MINE SAFETY DISCLOSURES
|
Not applicable.
| ITEM 5. |
OTHER INFORMATION
|
None.
| ITEM 6. |
EXHIBITS
|
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10‑Q.
|
Exhibit No.
|
Description
|
|
|
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
|
101.INS*
|
XBRL Instance Document
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
| * |
Filed herewith.
|
| ** |
Furnished.
|
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
SILVER SPIKE ACQUISITION CORP II
|
||||
|
Date:
|
August 12, 2022
|
By:
|
/s/ Scott Gordon
|
|
|
Name:
|
Scott Gordon
|
|||
|
Title:
|
Chief Executive Officer
Principal Executive Officer
|
|||
|
Date:
|
August 12, 2022
|
By:
|
/s/ Gregory Gentile
|
|
|
Name:
|
Gregory Gentile
|
|||
|
Title:
|
Chief Financial Officer
Principal Financial and Accounting Officer
|
|||
21
Exhibit 31.1
CERTIFICATIONS
I, Scott Gordon, certify that:
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Silver Spike Acquisition Corp II;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
(Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
August 12, 2022
|
By:
|
/s/ Scott Gordon
|
||
|
Name:
|
Scott Gordon
|
|||
|
Title:
|
Chief Executive Officer
Principal Executive Officer
|
|||
Exhibit 31.2
CERTIFICATIONS
I, Gregory Gentile, certify that:
| 1. |
I have reviewed this Quarterly Report on Form 10-Q of Silver Spike Acquisition Corp II;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
(Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
August 12, 2022
|
By:
|
/s/ Gregory Gentile
|
||
|
Name:
|
Gregory Gentile
|
|||
|
Title:
|
Chief Financial Officer
Principal Financial and Accounting Officer
|
|||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADDED BY
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Silver Spike Acquisition Corp II (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2022, as filed with the Securities and Exchange Commission (the
“Report”), I, Scott Gordon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
| 1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
August 12, 2022
|
By:
|
/s/ Scott Gordon
|
||
|
Name:
|
Scott Gordon
|
|||
|
Title:
|
Chief Executive Officer
Principal Executive Officer
|
|||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADDED BY
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Silver Spike Acquisition Corp II (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2022, as filed with the Securities and Exchange Commission (the
“Report”), I, Gregory Gentile, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
| 1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
August 12, 2022
|
By:
|
/s/ Gregory Gentile
|
||
|
Name:
|
Gregory Gentile
|
|||
|
Title:
|
Chief Financial Officer
Principal Financial and Accounting Officer
|
|||
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