
PART I. FINANCIAL INFORMATION This part provides the company's unaudited financial statements, management's analysis, market risk disclosures, and internal controls Financial Statements (Unaudited) This section presents Ascendant Digital Acquisition Corp.'s unaudited financial statements, detailing its financial position and performance as a blank check company preparing for a business combination Condensed Balance Sheet Highlights (Unaudited) | Account | March 31, 2021 (USD) | December 31, 2020 (USD) | | :--- | :--- | :--- | | Assets | | | | Cash | $695,093 | $861,754 | | Investments held in Trust Account | $414,258,248 | $414,209,593 | | Total Assets | $415,223,822 | $415,400,119 | | Liabilities | | | | Derivative warrant liabilities | $31,663,240 | $53,801,110 | | Deferred underwriting commissions | $14,490,000 | $14,490,000 | | Total Liabilities | $46,547,729 | $68,434,126 | | Shareholders' Equity | $5,000,003 | $5,000,003 | Condensed Statement of Operations (For the three months ended March 31, 2021) | Item | Amount (USD) | | :--- | :--- | | Loss from operations | $(476,425) | | Change in fair value of derivative warrant liabilities | $22,137,870 | | Interest earned on investments held in Trust Account | $48,655 | | Net income | $21,710,100 | - The company is a blank check company formed to effect a business combination, intending to focus on the 'Attention Economy' sectors like digital entertainment, e-sports, and media22 - On March 1, 2021, the Company entered into a Business Combination Agreement with Beacon Street Group, LLC (BSG) The transaction will involve the Company domesticating as a Delaware corporation and will be organized in an 'Up-C' structure post-closing3747 Summary of Significant Accounting Policies This note outlines the company's accounting policies, including its status as an emerging growth company and early adoption of ASU No. 2020-06 - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards5657 - Class A ordinary shares subject to possible redemption are classified as temporary equity outside of the shareholders' equity section on the balance sheet70 - The company early adopted ASU No. 2020-06 regarding convertible instruments and contracts in an entity's own equity on January 1, 2021, which did not impact its financial position, operations, or cash flows75 Related Party Transactions This note details transactions with the Sponsor, including warrant purchases, a repaid loan, and ongoing administrative fees - The Sponsor purchased 10,280,000 Private Placement Warrants at $1.00 per warrant, generating gross proceeds of approximately $10.3 million83 - The Sponsor provided a loan of approximately $160,000 to cover initial expenses, which was fully repaid on July 28, 202088 - The Company pays the Sponsor $10,000 per month for office space and administrative services, incurring $30,000 for the three months ended March 31, 202190 Fair Value Measurements This note describes the fair value measurement of financial instruments, particularly derivative warrant liabilities, and the resulting non-cash gain Fair Value of Derivative Warrant Liabilities as of March 31, 2021 | Warrant Type | Fair Value (USD) | Hierarchy Level | | :--- | :--- | :--- | | Public Warrants | $21,009,680 | Level 1 | | Private Warrants | $10,653,560 | Level 3 | - The fair value of derivative warrant liabilities decreased from $53.8 million at year-end 2020 to $31.7 million as of March 31, 2021, resulting in a recognized gain of approximately $22.1 million123124 - The fair value of Private Warrants (Level 3) is estimated using a Monte Carlo simulation, with key unobservable inputs including stock price volatility (17.5%) and expected life (5.17 years)121125 Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's financial condition and operating results, emphasizing its status as a blank check company and its liquidity - The company is a blank check company that consummated its IPO on July 28, 2020, raising $414.0 million in gross proceeds and placing the funds in a trust account129130132 - For the three months ended March 31, 2021, the company had net income of approximately $21.7 million, consisting of a $22.1 million gain from the change in fair value of derivative warrant liabilities and about $49,000 in interest income, offset by $476,000 in general and administrative expenses153 - As of March 31, 2021, the company had approximately $0.7 million in its operating bank account and believes it has sufficient working capital to meet its needs through the earlier of a business combination or one year from the filing date148150 - The company has a deferred underwriting commission of approximately $14.5 million, which is payable from the Trust Account only upon completion of a Business Combination158 Quantitative and Qualitative Disclosures About Market Risk This section addresses the company's market risk exposure, noting no material interest rate risk due to short-term U.S. government treasury investments - The company is a smaller reporting company and is not required to provide the information otherwise required under this item167 - The net proceeds from the IPO held in the Trust Account are invested in U.S. government securities with a maturity of 185 days or less, which management believes poses no material exposure to interest rate risk due to their short-term nature167169 Controls and Procedures Management concluded that the company's disclosure controls and procedures were ineffective due to a material weakness in accounting for complex securities - Management concluded that disclosure controls and procedures were not effective as of March 31, 2021170 - The ineffectiveness was due to a material weakness in internal control over financial reporting, stemming from the accounting treatment of complex securities, as described in the company's Form 10-K/A filed on May 10, 2021170 - Remediation steps are underway, including improving the review process for complex securities and enhancing access to third-party professionals172 PART II. OTHER INFORMATION This part covers other required disclosures, including legal proceedings, risk factors, equity sales, and exhibits Legal Proceedings The company reports no legal proceedings - None173 Risk Factors This section highlights a new risk factor concerning the potential for negative interest rates on trust account investments - A new risk factor has been added concerning the possibility of negative interest rates on the U.S. government treasury obligations held in the trust account175 - If interest rates become negative, the value of assets held in trust could be reduced, potentially causing the per-share redemption amount for public shareholders to fall below $10.00 per share175 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or use of proceeds for the period - None176 Defaults Upon Senior Securities The company reports no defaults upon senior securities - None177 Mine Safety Disclosures This section is not applicable to the company - Not applicable178 Other Information The company reports no other information - None179 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act180 - XBRL Instance Document and related taxonomy files are also included as exhibits180