ptis Therapeutics (COEP) - 2021 Q1 - Quarterly Report

Part I. Financial Information Financial Statements Q1 2021 financial statements reflect SPAC status, with $76.6 million assets and $14.1 million net income from warrant revaluation Condensed Balance Sheets As of March 31, 2021, total assets were $76.6 million, liabilities decreased to $8.8 million due to warrant revaluation Condensed Balance Sheet Highlights (unaudited) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash | $766,686 | $907,184 | | Marketable securities held in Trust Account | $75,753,072 | $75,751,204 | | Total Assets | $76,597,369 | $76,710,203 | | Liabilities & Equity | | | | Warrant liability | $6,487,500 | $20,700,000 | | Total Liabilities | $8,769,316 | $22,955,000 | | Ordinary shares subject to redemption | $62,828,052 | $48,755,202 | | Total Shareholder Equity | $5,000,001 | $5,000,001 | Condensed Statements of Operations Q1 2021 net income was $14.1 million, primarily from a non-cash gain on warrant liability revaluation Statement of Operations Summary (unaudited) | Account | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Operating costs | $141,518 | $0 | | Loss from operations | $(141,518) | $0 | | Change in fair value of warrant liability | $14,212,500 | $0 | | Net income | $14,072,850 | $2 | | Basic and diluted net income per share | $3.09 | $0.00 | Condensed Statements of Cash Flows Net cash used in Q1 2021 operating activities was $140,498, decreasing the cash balance Cash Flow Summary (unaudited) | Cash Flow Activity | Three Months Ended March 31, 2021 | | :--- | :--- | | Net cash used in operating activities | $(140,498) | | Net cash provided by financing activities | $0 | | Net Change in Cash | $(140,498) | | Cash – Beginning | $907,184 | | Cash – Ending | $766,686 | Notes to Unaudited Condensed Financial Statements Notes detail the company's SPAC nature, $75 million IPO, and warrant reclassification as fair value liabilities - The Company is a blank check company that consummated its Initial Public Offering on November 3, 2020, generating gross proceeds of $75,000,000, intending to focus on business combinations in the sports, entertainment, and brands sectors[25][27] - The Company has until May 3, 2022 (the "Combination Period") to complete a Business Combination, or it will be required to cease operations and redeem 100% of the outstanding Public Shares[39] - Warrants are accounted for as liabilities at fair value, with changes in fair value recognized in the statement of operations, a significant accounting policy affecting earnings[57] Change in Fair Value of Warrant Liabilities (Q1 2021) | | Private Placement | Public | Total Warrant Liabilities | | :--- | :--- | :--- | :--- | | Fair value as of December 31, 2020 | $10,350,000 | $10,350,000 | $20,700,000 | | Change in fair value | $(7,087,500) | $(7,125,000) | $(14,212,500) | | Fair value as of March 31, 2021 | $3,262,500 | $3,225,000 | $6,487,500 | Management's Discussion and Analysis of Financial Condition and Results of Operations The blank check company reported $14.1 million net income in Q1 2021 from warrant revaluation, holding $75.8 million in trust - The company is a blank check company formed to effect a business combination, with a focus on the sports, entertainment, and brands sectors[112][114] - Net income for the three months ended March 31, 2021, was $14,072,850, primarily consisting of a $14,212,500 non-cash gain from the change in fair value of warrant liability, offset by $141,518 in operating costs[116] - As of March 31, 2021, the company had $75,753,072 in marketable securities held in the trust account from its IPO and private warrant sale, intended for a future business combination[123] - The company accounts for warrants as a liability at fair value, with changes recognized in the statement of operations, a critical accounting policy causing financial fluctuations[131] Quantitative and Qualitative Disclosures Regarding Market Risk As a smaller reporting company, the registrant is not required to provide market risk disclosures - Disclosure is not required for smaller reporting companies[135] Controls and Procedures Management concluded disclosure controls were ineffective as of March 31, 2021, due to a material weakness in warrant accounting, with remediation underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2021[139] - A material weakness was identified in internal control over financial reporting related to SPAC warrant accounting, following an SEC Staff statement on April 12, 2021[140][141] - The company is implementing a remediation plan, which includes enhancing processes to identify and apply complex accounting standards and increasing communication with third-party professionals[142] Part II. Other Information Legal Proceedings The company has no legal proceedings to report - None[146] Risk Factors Risks include material non-cash fluctuations from warrant liability accounting, business combination difficulty, and internal control weakness - Warrants are accounted for as derivative liabilities, and changes in their fair value could have a material effect on financial results[148][150] - The liability accounting for warrants may adversely affect the market price of securities and could make it more difficult to find a target for a business combination[151][152] - A material weakness in internal control over financial reporting was identified as of March 31, 2021, which could adversely affect business and operating results if not addressed[153][154] Unregistered Sales of Equity Securities and Use of Proceeds The November 2020 IPO raised $75 million from units and $3.75 million from private warrants, placing $75.75 million in trust - The Initial Public Offering of 7,500,000 Units at $10.00 per Unit generated gross proceeds of $75,000,000[158] - A simultaneous private placement of 3,750,000 warrants at $1.00 per warrant generated gross proceeds of $3,750,000[159] - A total of $75,750,000 from the IPO and private placement was placed in the Trust Account[160] Defaults Upon Senior Securities The company has no defaults upon senior securities to report - None[163] Mine Safety Disclosures This item is not applicable to the company - Not applicable[165] Other Information The company has no other information to report - None[167] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and XBRL data - The report includes certifications from the Principal Executive Officer and Principal Financial Officer, as well as XBRL instance documents[170] Part III. Signatures - The report was duly signed on July 30, 2021, by Robert Striar, Chief Executive Officer, and Christopher Calise, Chief Financial Officer[173][175]