AlTi (ALTI) - 2021 Q2 - Quarterly Report

Part I. Financial Information This part covers the company's unaudited financial statements, management's discussion, market risk disclosures, and controls and procedures Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for the period ended June 30, 2021, including the balance sheet, statement of operations, and related notes Condensed Balance Sheets This section presents the company's unaudited condensed balance sheets as of June 30, 2021, and December 31, 2020, highlighting assets, liabilities, and equity Condensed Balance Sheet Highlights (Unaudited) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash | $831,388 | $— | | Cash and securities held in Trust Account | $345,019,579 | $— | | Total Assets | $346,194,399 | $130,686 | | Liabilities & Equity | | | | Warrant liability | $18,434,481 | $— | | Total liabilities | $30,530,800 | $113,634 | | Class A ordinary shares subject to possible redemption | $310,663,596 | $— | | Total shareholders' equity | $5,000,003 | $17,052 | Condensed Statement of Operations This section details the unaudited condensed statement of operations for the periods ended June 30, 2021, focusing on net income and warrant liability changes Statement of Operations Highlights (Unaudited) | Metric | Six months ended June 30, 2021 | Three months ended June 30, 2021 | | :--- | :--- | :--- | | Loss from operations | $(298,491) | $(211,271) | | Change in fair value of warrant liability | $8,570,219 | $9,444,519 | | Net Income | $4,344,114 | $9,245,674 | | Basic and diluted net income per share, Non-redeemable shares | $0.41 | $0.71 | Condensed Statement of Cash Flows This section outlines the unaudited condensed statement of cash flows for the six months ended June 30, 2021, categorizing cash activities Cash Flow Summary for Six Months Ended June 30, 2021 (Unaudited) | Cash Flow Category | Amount | | :--- | :--- | | Net cash used in operating activities | $(628,552) | | Net cash used in investing activities | $(345,000,000) | | Net cash provided by financing activities | $346,459,940 | | Net change in cash | $831,388 | | Cash, end of the period | $831,388 | Notes to Unaudited Condensed Financial Statements This section provides detailed notes to the unaudited condensed financial statements, covering company formation, IPO, and warrant reclassification - The Company is a SPAC incorporated on December 18, 2020, with the purpose of effecting a business combination, and has until February 26, 2023, to complete an initial Business Combination[21][27] - On February 26, 2021, the Company consummated its IPO of 34,500,000 units at $10.00 per unit, generating gross proceeds of $345,000,000, and simultaneously sold 8,900,000 private warrants to its sponsor for $8,900,000[22][23] - The Company restated its previously issued balance sheet from February 26, 2021, to reclassify public and private warrants as liabilities instead of equity, following SEC Staff guidance, resulting in a $27.0 million increase to warrant liabilities[33][34][37] - The Company pays its Sponsor $10,000 per month for office space, utilities, and administrative support services[85] - As of June 30, 2021, the fair value of warrant liabilities was $18.4 million, with Public Warrants classified as Level 1 and Private Warrants as Level 3 (valued using a Monte Carlo simulation)[96][97] Management's Discussion and Analysis of Financial Condition and Results of Operations The company is a blank-check company with no operations or revenue to date, reporting a net income of approximately $4.34 million for the six months ended June 30, 2021, primarily due to a non-cash gain from warrant liabilities - The company is a blank check company incorporated on December 18, 2020, seeking to complete a business combination, with an intent to focus on high-growth businesses with transnational operations[104] Financial Summary for Six Months Ended June 30, 2021 | Metric | Amount | | :--- | :--- | | Net Income | ~$4.34 million | | Loss from Operations | $0.3 million | | Gain from change in fair value of warrant liabilities | $8.6 million | - As of June 30, 2021, the company had approximately $0.8 million in cash available for working capital needs, with $345,019,579 held in the Trust Account[110][111] - The company has a contractual obligation to pay its Sponsor a monthly fee of $10,000 for administrative support and owes a deferred underwriting commission of $12,075,000, payable only upon completion of a business combination[117] Quantitative and Qualitative Disclosures Regarding Market Risk The company is classified as a smaller reporting company and, as such, is not required to provide the information for this item - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, the company is not required to provide the information otherwise required under this item[125] Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2021, due to a material weakness in internal control over financial reporting related to warrant accounting - Management concluded that disclosure controls and procedures were not effective as of the end of the fiscal quarter ended June 30, 2021[127] - A material weakness was identified in internal controls due to the improper accounting classification of warrants issued in February 2021, prompted by an SEC Staff statement identifying this as a widespread industry practice issue[127] - The company is implementing a remediation plan to enhance its system of evaluating and applying accounting standards, which includes consulting with third-party professionals[129] Part II. Other Information This part includes legal proceedings, updated risk factors, details on unregistered equity sales, and other required disclosures Legal Proceedings The company reports that there are no legal proceedings - None[131] Risk Factors This section updates risk factors, primarily focusing on issues arising from the reclassification of warrants as liabilities, including potential financial fluctuations, identified material weakness, and increased litigation risk - The accounting of warrants as liabilities means their fair value will be re-measured each reporting period, which could cause material, non-cash fluctuations in financial results[132][133] - A material weakness in internal control over financial reporting has been identified, which could adversely affect the company's ability to report financial results accurately and in a timely manner[133][134] - The company faces potential litigation and other disputes as a result of the material weakness in its internal control over financial reporting and the restatement of its financial statements[139] Unregistered Sales of Equity Securities and Use of Proceeds This section details unregistered equity sales and the allocation of IPO proceeds, including the Sponsor's purchase of Founder Shares and Private Warrants, and the deposit of IPO proceeds into the Trust Account - On December 31, 2020, the company issued founder shares to the Sponsor, which, after a recapitalization, totaled 8,625,000 shares for a subscription price of $25,000[140] - On February 26, 2021, the company sold 8,900,000 Private Warrants to the Sponsor at $1.00 per warrant, generating total proceeds of $8,900,000[142] - Total net proceeds from the IPO and Private Placement were $346,000,000, of which $345,000,000 was placed in the Trust Account[145] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[145] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[145] Other Information The company reports no other information - None[145] Exhibits This section lists the exhibits filed as part of the quarterly report, which include the company's Amended and Restated Memorandum and Articles of Association, officer certifications, and Inline XBRL documents - The report includes several exhibits, such as the company's governing documents (3.1), certifications by the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2), and XBRL data files[147]