NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Description
of Organization, Business Operations and Basis of Presentation
Organization and General
Horizon Acquisition Corporation (the “Company”),
formerly known as EAC Holdings Inc., is a blank check company incorporated in the Cayman Islands on June 12, 2020. The Company was
incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses that the Company has not yet identified (“initial Business Combination”). Although
the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company
intends to focus in the financial, technology and business services sectors. The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the
Jumpstart our Business Startups Act of 2012 (the “JOBS Act”).
As of March 31, 2021, the Company had not
yet commenced operations. All activity for the period from June 12, 2020 (inception) through March 31, 2021 relates to the
Company’s formation and the initial public offering (the “Initial Public Offering”) described below. The Company will
not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will
generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial
Public Offering. The Company has selected December 31 as its fiscal year end.
Sponsor and Initial Public Offering
The Company’s sponsor is Horizon Sponsor,
LLC, a Delaware limited liability company (“Sponsor”). The registration statement for the Company’s Initial Public
Offering was declared effective on August 20, 2020. On August 25, 2020, the Company consummated its Initial Public Offering
of 50,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units, the “Public
Shares”), at $10.00 per Unit, generating gross proceeds of $500.0 million, and incurring offering costs of approximately $19.6
million, inclusive of approximately $12.1 million in deferred underwriting commissions (Note 6). On August 26, 2020, the Company
issued an additional 4,398,433 Units at the Initial Public Offering price at $10.00 per Unit pursuant to the exercise by the underwriters
of a portion of their over-allotment option, generating additional gross proceeds of approximately $44.0 million, and incurring additional
offering costs of approximately $2.4 million, inclusive of an additional of approximately $1.5 million in deferred underwriting commissions.
Simultaneously, with the consummation of the
Initial Public Offering, the Company consummated the private placement (the “Private Placement”) of 5,933,333 Private Placement
Warrants at a price of $1.50 per Private Placement Warrant, generating total proceeds of $8.9 million (Note 4). In connection with the
exercise by the underwriters of the over-allotment option, the Sponsor purchased an additional 586,458 Private Placement Warrants at
a price of $1.50 per Private Placement Warrant, generating additional total proceeds of approximately $0.9 million.
Trust Account
Upon the closing of the Initial Public Offering
and the Private Placement on August 25, 2020, approximately $500.0 million ($10.00 per Unit) of the net proceeds of the Initial
Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (“Trust Account”), with
Continental Stock Transfer & Trust Company acting as trustee. On August 26, 2020, an additional amount of approximately
$44.0 million, for a total of approximately $544.0 million was deposited to the Trust Account. The proceeds in the Trust Account are
invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act
having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier
of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Initial Business Combination
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of its Initial Public Offering and the sale of Private
Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a
Business Combination. The Company’s initial Business Combination must be with one or more operating businesses or assets with
a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred
underwriting commissions and taxes payable on the income earned on the Trust Account) at the time the Company signs a definitive
agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the
post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target business 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 of 1940, as amended, or the Investment Company Act.
The Company will provide the holders of the
Public Shares (the “Public 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 general 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. The Public Shareholders will be entitled to redeem their Public Shares for a pro
rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per share, plus any pro rata interest earned
on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to
be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the
Company will pay to the underwriters (as discussed in Note 6). These Public Shares have been recorded at a redemption value and classified
as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”)
Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if
the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority of the shares
voted are voted in favor of the Business Combination. If a shareholder vote is not required by applicable law or stock exchange listing
requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to
the amended and restated memorandum and articles of association which was adopted by the Company upon the consummation of the Initial
Public Offering (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to
the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents with
the SEC prior to completing a Business Combination. If, however, a shareholder approval of the transaction is required by applicable
law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other reasons, the
Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the
tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for
or against the proposed transaction or whether they were a Public Shareholder on the record date for the general meeting held to approve
the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the holders of the founder
shares prior to this Initial Public Offering (the “Initial Shareholders”) have agreed to vote their founder shares (as defined
in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition,
the Initial Shareholders have agreed to waive their redemption rights with respect to their founder shares and Public Shares in connection
with the completion of a Business Combination. In addition, the Company has agreed not to enter into a definitive agreement regarding
an initial Business Combination without the prior consent of the Sponsor.
Notwithstanding the foregoing, 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 more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without the
prior consent of the Company.
The Company’s Sponsor, officers and directors
have agreed not to propose an amendment to the Company’s Amended and Restated Memorandum and Articles of Association to either
(i) to modify the substance or timing of the Company’s obligation to allow the redemption of its Public Shares in connection
with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within 24
months from the closing of the Initial Public Offering or (ii) with respect to any other provisions relating to shareholders’
rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem
their Class A ordinary shares in conjunction with any such amendment.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
If the Company is unable to complete a Business
Combination within 24 months from the closing of the Initial Public Offering, or August 25, 2022 (the “Combination Period”),
the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but
not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and up to $100,000 of interest
to pay dissolution expenses), divided by the number of then issued and 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 board of directors,
liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands
law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
In connection with the redemption of 100% of
the Company’s outstanding Public Shares for a portion of the funds held in the Trust Account, each holder will receive a full
pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account
and not previously released to the Company to pay the Company’s taxes payable (less taxes payable and up to $100,000 of
interest to pay dissolution expenses). The Initial Shareholders have agreed to waive their liquidation rights with respect to the
founder shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial
Shareholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating
distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination
within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see
Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period
and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the
redemption of the Company’s Public Shares. In the event of such distribution, it is possible that the per share value of the
residual assets remaining available for distribution in the Trust Account will be less than the $10.00 per share initially held in
the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the
Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective
target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or
business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public
share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the Trust
Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such
liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights
to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the
Company’s indemnity of the underwriters of 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 vendors, service providers (except the Company’s independent registered public accounting
firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company
waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. There can be no guarantee that
the Company will be successful in obtaining such waivers from its targeted vendors and service providers.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
Basis of presentation
The accompanying unaudited
condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United
States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly,
they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial
statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances
and results for the periods presented. Operating results for the three months ended March 31, 2021 are not necessarily indicative
of the results that may be expected through December 31, 2021, or any future period.
The accompanying unaudited condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K, as amended,
filed by the Company with the SEC on May 7, 2021.
Emerging growth company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS
Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in
its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and 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 an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging growth companies but any such 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 other public companies difficult or
impossible because of the potential differences in accounting standards used.
Liquidity and
Capital Resources
As of March 31, 2021, the Company had approximately
$799,000 outside of the Trust Account.
The Company’s liquidity needs up to March 31,
2021 have been satisfied through (i) the payment of $25,000 from the Sponsor to cover certain expenses on behalf of the Company
in exchange for the issuance of the founder shares, (ii) a loan of approximately $185,000 from the Sponsor (see Note 5), and (iii) the
proceeds from the consummation of the Private Placement, the proceeds of which are not held in the Trust Account. The Company fully repaid
the loan from the Sponsor on August 28, 2020. In addition, in order to finance transaction costs in connection with a Business Combination,
the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide
the Company Working Capital Loans (see Note 5). As of March 31, 2021 and December 31, 2020, there were no amounts outstanding
under any Working Capital Loan.
Based on the foregoing,
management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of
the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation of an
Initial Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing
accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective
target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating
and consummating the Initial Business Combination.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 2 — Summary
of Significant Accounting Policies
Use of Estimates
The preparation of financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. One of the more significant accounting estimates included in these financial statements is the determination
of the fair value of the warrant liability.
Making estimates requires
management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation
or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly
from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31,
2021 or December 31, 2020.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the federal
depository insurance coverage of $250,000, and investments held in Trust Account. The Company has not experienced losses on these accounts
and management believes the Company is not exposed to significant risks on such accounts. The Company’s investments held in the
Trust Account as of December 31, 2020 is comprised of investments in U.S. Treasury securities with an original maturity of 185 days
or less or investments in a money market funds that comprise only U.S. treasury securities money market funds.
Investments Held in the Trust Account
The Company’s portfolio of investments
held in the Trust Account is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities, or
a combination thereof. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities
are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in
fair value of these securities is included in net gain on investments held in Trust Account in the accompanying statement of operations.
The estimated fair values of investments held in the Trust Account are determined using available market information.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under the ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the balance sheet.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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.
As of March 31, 2021 and December 31, 2020, the carrying
values of cash, accounts payable and accrued expenses approximate their fair values due to the short-term nature of the instruments.
The Company’s marketable securities held in Trust Account is comprised of investments in U.S. Treasury securities with an
original maturity of 185 days or less and are recognized at fair value. The fair value of marketable securities held in Trust
Account is determined using quoted prices in active markets.
The fair value of warrants
issued in connection with the Initial Public Offering, exercise of the over-allotment option and Private Placement were initially and
subsequently measured at fair value using a Monte Carlo simulation model. Beginning as of December 31, 2020, the fair value of Public
Warrants have been measured based on the listed market price of such the Public Warrants. The Private Placement Warrants continue to
be measured at fair value using a Monte Carlo simulation model through March 31, 2021.
Derivative Warrant Liabilities
The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The
18,132,811 issued in connection with the Initial Public Offering (the “Public Warrants”) and the 6,519,791 Private Placement
Warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments
as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement
at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Offering costs associated with Initial
Public Offering
Offering costs consist of legal,
accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public
Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative
fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred and
presented as non-operating expenses in the statement of operations. Offering costs associated with the Public Shares were charged to
shareholders’ equity. Of the total offering costs of the Initial Public Offering, approximately $0.6 million was expensed as incurred
and $21.5 million is included in stockholders’ equity.
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 ASC Topic 480 “Distinguishing Liabilities from Equity.”
Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair
value. Shares of conditionally redeemable Class A ordinary shares (including Class A 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, Class A 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 the occurrence of uncertain future events. Accordingly, at March 31, 2021 and December 31, 2020, 49,814,654
and 49,047,261 Class A ordinary shares subject to possible redemption, respectively, are presented as temporary equity, outside of
the shareholders’ equity section of the Company’s balance sheet.
Income Taxes
ASC Topic 740 prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained
upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2021. The Company’s management
determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of March 31,
2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
There is currently no
taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman Islands income tax regulations, income
taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s
management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net Income per Ordinary Share
The Company complies with accounting and disclosure
requirements of ASC Topic 260, “Earnings Per Share.” Net income per common share is computed by dividing net loss by the weighted
average number of shares of ordinary shares outstanding during the period. The Company has not considered the effect of the warrants sold
in the Initial Public Offering and Private Placement to purchase an aggregate of 24,652,602 shares of the Company’s ordinary shares
in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and
the inclusion of such warrants would be anti-dilutive.
The Company’s statement of operations includes
a presentation of income per common share for Class A ordinary shares subject to possible redemption in a manner similar to the two-class
method of income per common share. Net income per common share, basic and diluted, for Class A ordinary shares subject to possible
redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net
of applicable franchise and income taxes, by the weighted average number of shares of Class A ordinary shares subject to possible
redemption outstanding since original issuance.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Net income per ordinary share, basic and diluted,
for non-redeemable common stock is calculated by dividing the net income, adjusted for income or loss on marketable securities attributable
to common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period.
Non-redeemable ordinary shares include Founder
Shares and non-redeemable shares of Class A ordinary shares as these shares do not have any redemption features. Non-redeemable ordinary
shares participate in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.
Recent Adopted
Accounting Standards
In August 2020,
the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible
Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation
models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to
qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The
Company early adopted the ASU on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position,
results of operations or cash flows.
Recent Issued
Accounting Standards
The Company’s
management does not believe that any recently issued, but not yet effective, accounting standards updates, if currently adopted, would
have a material effect on the accompanying financial statement.
Note 3 — Initial
Public Offering
On August 25, 2020,
the Company consummated its Initial Public Offering of 50,000,000 Units, at $10.00 per Unit, generating gross proceeds of $500.0 million,
and incurring offering costs of approximately $19.6 million, inclusive of approximately $12.1 million in deferred underwriting commissions.
The Sponsor purchased 15,500,000 Units (the “Affiliated Units”) at the Initial Public Offering price. The underwriters did
not receive any underwriting discounts or commissions on the Affiliated Units.
On August 26, 2020,
the Company issued an additional of 4,398,433 Units at the Initial Public Offering price at $10.00 per Unit pursuant to the exercise
by the underwriters of a portion of their over-allotment option, generating additional gross proceeds of approximately $44.0 million,
and incurring additional offering costs of approximately $2.4 million, inclusive of an additional of approximately $1.5 million in deferred
underwriting commissions.
Each Unit will consist
of one Class A ordinary share and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant
will entitle the holder to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment (see
Note 8).
Note 4 — Private
Placement
As a result of the purchase of the Affiliated
Units by the Sponsor, the number of Private Placement Warrants purchased by the Sponsor was reduced to account for the corresponding
reduction in underwriting discounts payable upon completion the Initial Public Offering. On August 25, 2020, simultaneous with the
consummation of the Initial Public Offering, the Company consummated the Private Placement of 5,933,333 Private Placement Warrants at
a price of $1.50 per Private Placement Warrant, generating total proceeds of $8.9 million. In connection with the partial exercise of
the over-allotment option, the Sponsor purchased an additional 586,458 Private Placement Warrants at a price of $1.50 per Private Placement
Warrant, generating additional total proceeds of approximately $0.9 million. A portion of the proceeds from the sale of the Private Placement
Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account.
Each whole Private Placement Warrant is exercisable
for one whole Class A ordinary share at a price of $11.50 per share. If the Company does not complete a Business Combination within
the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants are non-redeemable except
as described below and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Sponsor and the Company’s officers
and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30
days after the completion of the initial Business Combination.
Note 5 — Related
Party Transactions
Founder Shares
On July 2, 2020, the Sponsor paid an aggregate
of $25,000 for certain expenses on behalf of the Company in exchange for issuance of 14,375,000 Class B ordinary shares (the “founder
shares”). The Sponsor agreed to forfeit up to an aggregate of 1,875,000 founder shares to the extent that the option to purchase
additional units was not exercised in full by the underwriters or was reduced, so that the founder shares would represent 20% of the
Company’s issued and outstanding shares after the Initial Public Offering. On August 25, 2020, in connection with the purchase
of the Affiliated Units, the Sponsor surrendered 581,250 founder shares to the Company for no consideration. On August 26, 2020,
the underwriters partially exercised their over-allotment option, which resulted in 1,099,608 founder shares no longer being subject
to forfeiture. On October 4, 2020, 194,142 shares were forfeited as the remainder of the over-allotment option expired unexercised.
As a result, as of March 31, 2021 and December 31, 2020, no remaining Class B ordinary shares were subject to forfeiture.
The Initial Shareholders agreed not to transfer,
assign or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of the initial Business
Combination or earlier if, subsequent to the initial Business Combination, the closing price of the Class A ordinary shares equals
or exceeds $12.00 per share (as adjusted for share sub-divisions, capitalization of shares, 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 the initial Business Combination, and (ii) the date following the completion of the initial Business Combination on which
the Company completes a liquidation, merger, share exchange 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.
Related Party Loans
On July 2, 2020, the Sponsor agreed to loan
the Company up to $300,000 to be used for the payment of costs related to the Initial Public Offering pursuant to a promissory note (the
“Note”). The Note is non-interest bearing, unsecured and due upon the closing of the Initial Public Offering. The Company
borrowed approximately $185,000 under the Note, and fully repaid this balance on August 28, 2020.
In addition, in order to fund working capital
deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds
of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust
Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account
to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working
Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lenders’ discretion,
up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price
of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such
Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of March 31,
2021 and December 31, 2020, the Company had no borrowings under the Working Capital Loans.
Administrative Support Agreement
The Company agreed to pay the Sponsor a total
of $10,000 per month, commencing on the date of listing on the NYSE, for office space, utilities, secretarial and administrative support
services provided to members of the management team. Upon completion of the initial Business Combination or the Company’s liquidation,
the Company will cease paying these monthly fees. From the date the securities were first listed on the NYSE through March 31, 2021,
the Sponsor waived the fee.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
In addition, the Sponsor, officers and directors,
or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the
Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations.
The Audit Committee of the Board of Directors will review on a quarterly basis all payments that are made by the Company to the Sponsor,
officers or directors, or their affiliates. Any such payments prior to an initial Business Combination will be made from funds held outside
the Trust Account.
Note 6 — Commitments
and Contingencies
Registration and Shareholder Rights
The holders of the founder shares, Private
Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares
issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital
Loans) are entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these
securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In
addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed
subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the
filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option, from August 20, 2020, the date of the final prospectus related to the initial public offering, to purchase up to 7,500,000
additional Units at the Initial Public Offering price less the underwriting discounts and commissions. On August 26, 2020, the Company
issued an additional of 4,398,433 Units at the Initial Public Offering price at $10.00 per Unit pursuant to the partial exercise of the
underwriters’ over-allotment option.
The underwriters were entitled to an underwriting
discount of $0.20 per unit, or $6.9 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35
per unit, or approximately $12.1 million in the aggregate will be payable to the underwriters for deferred underwriting commissions.
The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company
completes a Business Combination, subject to the terms of the underwriting agreement.
In connection with the consummation of the sale
of Units pursuant to the over-allotment option on August 26, 2020, the underwriters were entitled to an additional fee of approximately
$0.9 million paid upon closing and an additional deferred underwriting commissions of approximately $1.5 million.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that, while it is reasonably possible that the virus could have a negative effect on the Company’s
financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as
of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
Note 7 — Derivative
Warrant Liabilities
As of March 31, 2021 and December 31,
2020, the Company had 18,132,811 and 6,519,791 Public Warrants and Private Placement Warrants, respectively, outstanding.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of an initial Business Combination
and (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration
statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public Warrants and a current
prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities,
or blue sky, laws of the state of residence of the holder (or the Company permit holders to exercise their warrants on a cashless basis
under certain circumstances). The Company has agreed that as soon as practicable, but in no event later than 15 business days after the
closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC a registration
statement covering the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating
to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration
statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the
closing of the initial 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” and, in the event
the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the
Company does not so elect, it will use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws
to the extent an exemption is not available.
The warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of the initial Business Combination or earlier upon
redemption or liquidation. 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 the initial 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 board of directors and, in the case of any such issuance to the Initial Shareholders or their affiliates, without taking into
account any founder shares held by the Initial Shareholders or such affiliates, as applicable, prior to such issuance) (the “Newly
Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds,
and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business
Combination (net of redemptions), and (z) the volume weighted average trading price of Class A ordinary shares during the 10-trading
day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price,
the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent)
to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will
be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per
share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued
Price See “- Redemption of warrants when the price per class A ordinary share equals or exceeds $18.00” and “- Redemption
of warrants when the price per class A ordinary share equals or exceeds $10.00” as described below.
The Private Placement Warrants are identical
to the Public Warrants underlying the Units sold in the Initial Public Offering, except (i) that the Private Placement Warrants
and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or
salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (ii) except as described
below, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor or such its permitted transferees
and (iii) the Sponsor or its permitted transferees will have the option to exercise the Private Placement Warrants on a cashless
basis and have certain registration rights. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted
transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders
on the same basis as the Public Warrants.
HORIZON ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
Redemption of warrants when the price per
Class A ordinary share equals or exceeds $18.00:
Once the warrants become exercisable, the Company
may call the outstanding warrants for redemption (except as described herein with respect to the Private Placement Warrants):
|
|
•
|
in whole and not in part;
|
|
|
•
|
at a price of $0.01 per
warrant;
|
|
|
•
|
upon a minimum of 30 days’
prior written notice of redemption to each warrant holder; and
|
|
|
•
|
if, and only if, the last
reported sale price (the “closing price”) of Class A ordinary shares equals or exceeds $18.00 per share (as adjusted)
for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends
the notice of redemption to the warrant holders.
|
Redemption of warrants when the price per
Class A ordinary share equals or exceeds $10.00:
Once the warrants become exercisable, the Company
may call the outstanding warrants for redemption (except as described herein with respect to the Private Placement Warrants):
|
|
•
|
in whole and not in part;
|
|
|
•
|
at $0.10 per warrant upon
a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a
cashless basis prior to redemption and receive that number of Class A ordinary shares to be determined by reference to an agreed
table based on the redemption date and the “fair market value” of Class A ordinary shares;
|
|
|
•
|
if, and only if, the closing
price of Class A ordinary shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the 30-trading
day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
|
|
|
•
|
if the closing price of
the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to
the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted),
the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants,
as described above.
|
The “fair market value” of Class A
ordinary shares for the above purpose shall mean the volume weighted average price of Class A ordinary shares during the 10 trading
days immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants
be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant
(subject to adjustment).
In no event will the Company be required to net
cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates
the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will
they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
Note 8 — Shareholders’
Equity
Preference
Shares - The Company is authorized to issue 1,000,000 preference with such designations, voting and other rights and preferences
as may be determined from time to time by the Company’s board of directors. As of March 31, 2021 and December 31, 2020,
there were no preference shares issued or outstanding.
Class A
Ordinary Shares - The Company is authorized to issue 400,000,000 Class A ordinary shares with a par value of
$0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. As of March 31,
2021, there were 54,398,433 Class A ordinary shares issued and outstanding, including 49,814,654 Class A ordinary shares subject
to possible redemption and have been reflected as temporary equity on the balance sheet. As of December 31, 2020, there were 54,398,433
Class A ordinary shares issued and outstanding, including 49,047,261 Class A ordinary shares subject to possible redemption
and have been reflected as temporary equity on the balance sheet.
HORIZON
ACQUISITION CORPORATION
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Class B
Ordinary Shares - The Company is authorized to issue 40,000,000 Class B ordinary shares with a par value of $0.0001
per share. On July 2, 2020, the Company issued 14,375,000 Class B ordinary shares, of which an aggregate of up to 1,875,000
Class B ordinary shares were subject to forfeiture to the Company by the Initial Shareholders for no consideration to the extent
that the underwriters’ over-allotment option is not exercised in full or in part, so that the Initial Shareholders would collectively
own 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. On August 25, 2020, in connection
with the purchase of the Affiliated Units, the Sponsor surrendered 581,250 founder shares to the Company for no consideration. On August 26,
2020, the underwriters partially exercised their over-allotment option, which resulted in 1,099,608 founder shares no longer being subject
to forfeiture. As a result, 194,142 Class B ordinary shares were subject to forfeiture. On October 4, 2020, these shares were
forfeited as the remainder of the over-allotment option expired unexercised. As of March 31, 2021 and December 31, 2020, there
were 13,599,608 Class B ordinary shares outstanding, and no shares were subject to forfeiture, respectively.
Ordinary shareholders of record are entitled to
one vote for each share held on all matters to be voted on by shareholders and holders of Class A ordinary shares and holders of
Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required
by law; provided that only holders of Class B ordinary shares will have the right to vote on the appointment of directors prior to,
or in connection with, the completion of the initial Business Combination.
The Class B ordinary shares will automatically
convert into Class A ordinary shares at the time of the consummation of the initial Business Combination on a one-for-one basis,
subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to
further adjustment. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed issued in
connection with the initial Business Combination, the number of Class A ordinary shares issuable upon conversion of all founder shares
will equal, in the aggregate, on an as-converted basis, 20% of the total number of Class A ordinary shares outstanding after such
conversion (after giving effect to any redemptions of Class A ordinary shares by Public Shareholders), including the total number
of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights
issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding
any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued,
or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued upon conversion of Working
Capital Loans; provided that such conversion of founder shares will never occur on a less than one-for-one basis.
HORIZON
ACQUISITION CORPORATION
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 9 — Fair Value Measurements
The following table presents information about
the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 and
indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
|
March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Quoted Prices in Active
Markets
(Level 1)
|
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
|
Significant Other
Unobservable Inputs
(Level 3)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account
|
|
$
|
544,010,831
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative warrant liabilities -Public Warrants
|
|
$
|
19,946,090
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Derivative warrant liabilities -Private Warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
7,171,770
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Quoted Prices in Active
Markets
(Level 1)
|
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
|
Significant Other
Unobservable Inputs
(Level 3)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account
|
|
$
|
544,002,795
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative warrant liabilities -Public Warrants
|
|
$
|
26,292,580
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Derivative warrant liabilities -Private Warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
9,453,700
|
|
Transfers
to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. During the period there were no transfers to/from Levels
1, 2, and 3.
Level
1 instruments include investments in mutual funds invested in government securities. The Company uses inputs such as actual trade data,
benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The fair
value of the Private Placement Warrants were initially and subsequently (each measurement date) measured using a Monte Carlo simulation
model. The fair value of Public Warrants issued in connection with the Initial Public Offering are measured based on the listed market
price of such warrants, a Level 1 measurement. For the three months ended March 31, 2021, the Company recognized a charge to the
statement of operations resulting from an increase in the fair value of liabilities of $8.6 million presented as change in fair value
of derivative warrant liabilities on the accompanying unaudited condensed statement of operations.
The estimated
fair value of the Private Placement Warrants is determined using Level 3 inputs. Inherent in a Monte Carlo simulation are assumptions
related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility
of its common stock warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select
peer company’s common stock that matches the expected remaining life of the warrants. The risk-free interest rate is based on the
U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected
life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate,
which the Company anticipates remaining at zero.
HORIZON
ACQUISITION CORPORATION
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The following
table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
Volatility
|
|
|
17.7
|
%
|
|
|
22.1
|
%
|
|
Share price
|
|
$
|
9.88
|
|
|
$
|
10.02
|
|
|
Risk-free rate
|
|
|
0.92
|
%
|
|
|
0.36
|
%
|
|
Dividend yield
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
The change
in the fair value of the derivative warrant liabilities for the period for the three months ended March 31,
2021 is summarized as follows:
|
Warrant liabilities at December 31, 2020
|
|
$
|
35,746,280
|
|
|
Change in fair value of warrant liabilities
|
|
|
(8,628,420
|
)
|
|
Warrant liabilities at March 31, 2021
|
|
$
|
27,117,860
|
|
Note 10 — Subsequent Events
The Company evaluated events that have occurred after the balance sheet
date up to the date that the financial statements were issued. Based upon this review, other than the event disclosed below, the Company
did not identify any subsequent events that would have required adjustment or disclosure in the financial statements which have not previously
been disclosed within the financial statements.
On April 21, 2021, the Company entered into a Transaction Agreement
with Hoya Topco, LLC (“Topco”), a Delaware limited liability company, Hoya Intermediate, LLC (“Intermediate”),
a Delaware limited liability company, and Vivid Seats Inc. (“VS PubCo”), a Delaware corporation and a direct wholly owned
subsidiary of Intermediate, pursuant to which the Company will merge with and into VS PubCo, and VS PubCo will be the surviving corporation
of the merger. For further details on the contemplated merger, please see the Form 8-K filed with the Securities and Exchange Commission
on April 22, 2021.