Annual report pursuant to Section 13 and 15(d)

Recurring Fair Value Measurements

Recurring Fair Value Measurements
12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Recurring Fair Value Measurements



Investment Held in Trust Account 


As of December 31, 2020, investment in the Company’s Trust Account consisted of $379 in U.S. Money Market and $116,162,094 in U.S. Treasury Securities. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC 320 “Investments — Debt and Equity Securities”. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The Company considers all investments with original maturities of more than three months but less than one year to be short-term investments. The carrying value approximates the fair value due to its short-term maturity. The carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities on December 31, 2020 are as follows:


    Fair Value
as of
December 31,
U.S. Money Market   $ 379     $ -     $ -     $ 379  
U.S. Treasury Securities     116,162,094       1,154       -       116,163,248  
    $ 116,162,473     $ 1,154     $         -     $ 116,163,627  


Warrant Liability


At December 31, 2020, the Company’s warrant liability was valued at $12,372,000. Under the guidance in ASC 815-40 the warrants do not meet the criteria for equity treatment. As such, the warrants must be recorded on the balance sheet at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s Statement of Income.


Recurring Fair Value Measurements


The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2020, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.


    December 31,     Quoted
Prices In
    2020     (Level 1)     (Level 2)     (Level 3)  
U.S. Money Market held in Trust Account   $ 379     $ 379     $             -     $ -  
U.S. Treasury Securities held in Trust Account     116,162,094       116,162,094       -       -  
    $ 116,162,473     $ 116,162,473     $ -     $ -  
Warrant Liability   $ 12,372,000     $ -     $ -     $ 12,372,000  
    $ 12,372,000     $ -     $ -     $ 12,372,000  


The following table sets forth a summary of the changes in the fair value of the warrant liability for the period from August 20,2020 (inception) through December 31, 2020:


    Warrant Liability  
Fair value as of August 20, 2020   $  
Initial fair value of warrant liability upon issuance at IPO     15,380,000  
Initial fair value of warrant liability upon issuance at over-allotment     2,260,200  
Revaluation of warrant liability included in other income within the statement of income for the period from August 20,2020 (inception) through December 31, 2020     (5,268,200 )
Fair value as of December 31, 2020   $ 12,372,000  


The estimated fair value of the warrants is determined using Level 3 inputs. Inherent in a Monte-Carlo simulation model are assumptions related to expected stock-price volatility (pre-merger and post-merger), expected term, dividend yield and risk-free interest rate. The Company estimates the volatility of its common stock based on management’s understanding of the volatility associated with instruments of other similar entities. The risk-free interest rate is based on the U.S. Treasury Constant Maturity similar to the expected remaining life of the warrants. The expected life of the warrants is simulated based on management assumptions regarding the timing and likelihood of completing a business combination. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. Once the warrants become exercisable, the Company may redeem the outstanding warrants when the price per common stock equals or exceeds $18.00. The assumptions used in calculating the estimated fair values at the end of the reporting period represent the Company’s best estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially different.