Filing identity and reporting period
Important identity discrepancy: The supplied filing is FinTech Acquisition Corp. IV’s Form 10-Q for the quarter ended September 30, 2020, not a Perella Weinberg Partners filing. The summary below reflects the filing text provided.
FinTech Acquisition Corp. IV is a blank-check company formed to pursue a business combination. It had not begun operating activities or generated significant revenue by quarter-end.
Financial results and liquidity
- Revenue: None to date. The company reported no operating revenue.
- Net loss: $19,845 for the third quarter and $21,438 for the first nine months of 2020, primarily formation and general and administrative expenses, partly offset by $63 of trust-account interest. The comparable 2019 nine-month net loss was $969.
- Cash flow: Operating activities used $33,116 in the first nine months of 2020. Financing activities provided $231.7 million, mainly from the public offering and private placement; $230.0 million was invested in the Trust Account.
- Assets and liquidity: At September 30, cash outside the Trust Account was $1.63 million; Trust Account investments were $230.0 million. The company reported total assets of $231.7 million.
- Liabilities and equity: Total liabilities were $9.82 million, including a $9.8 million deferred underwriting fee payable upon completion of a business combination. Redeemable Class A shares were classified as temporary equity at $216.85 million; stockholders’ equity was $5.00 million. No long-term debt was reported.
- Margins: Not meaningful because the company had no revenue.
Material changes and financing
On September 29, 2020, the company completed its IPO of 23.0 million units at $10 per unit, including full exercise of the over-allotment option, for $230.0 million gross proceeds. It simultaneously sold 610,000 private placement units for $6.1 million. Of the combined proceeds, $230.0 million was placed in the Trust Account. Reported offering and transaction costs were $14.26 million, including $9.8 million of deferred underwriting fees.
Compared with December 31, 2019, cash and total assets increased substantially following the IPO. The company had no Trust Account investments at year-end 2019. Its $90,869 related-party promissory note was repaid at the IPO closing.
Outlook, risks, and unusual items
- Management had not selected a target or begun substantive discussions with a target as of the filing. It expected continued costs while searching and did not assure that a business combination would be completed.
- The company must complete a business combination by September 29, 2022 or liquidate and distribute the Trust Account, subject to applicable deductions and terms. A target must generally have fair market value of at least 80% of the Trust Account balance, net of specified items.
- Management did not believe it then needed additional funds for planned expenditures, but warned that underestimated search or transaction costs, significant shareholder redemptions, or insufficient financing could prevent completion of a transaction.
- COVID-19 could adversely affect the company’s financial position or target search; the specific effect was not determinable, and no related adjustment was recorded.
- The filing identifies possible negative interest rates on Trust Account investments as a risk to the redemption value per public share.
- The company pays the Sponsor or an affiliate $20,000 per month for administrative support from September 25, 2020 until a business combination or liquidation. The $9.8 million deferred underwriting fee is payable only if a business combination is completed.
- Management reported effective disclosure controls as of September 30, 2020. No legal proceedings were reported.
Key facts for investors to verify
- Confirm the issuer: this text is for FinTech Acquisition Corp. IV, not Perella Weinberg Partners.
- Verify the status of any subsequent target search, business combination, redemptions, or extension of the September 29, 2022 deadline.
- Review the Trust Account balance and redemption terms, including the effects of taxes, negative yields, and any third-party claims.
- Assess potential dilution from founder shares, private placement securities, warrants, and any financing or securities issued in a business combination.
- Check the terms and potential funding availability of Sponsor or other working-capital loans, which may be converted into units.