Reservoir Media(RSVR) - 2022 Q1 - Quarterly Report

Part I. Financial Information Financial Statements This section presents the unaudited condensed financial statements for Reservoir Media, Inc. as a blank check company prior to its business combination Notes to Condensed Financial Statements These notes detail the company's SPAC formation, business combination, and accounting for stock and warrant liabilities - The company was a blank check company formed to effect a business combination, consummating a merger with Reservoir Holdings, Inc. and renaming to Reservoir Media, Inc. on July 28, 2021, after the reporting period[18][19] - In connection with the business combination, a PIPE investment of $150.0 million was completed, and holders of approximately 10.3 million public shares exercised their redemption rights for an aggregate of $103.0 million[20][21] - The company is an "emerging growth company" and has elected not to opt out of the extended transition period for new or revised financial accounting standards[32][34] - Warrants are accounted for as liabilities and measured at fair value at each reporting period using a Level 3 binomial lattice model, with changes in fair value recognized in the statement of operations[41][85] Change in Fair Value of Warrant Liabilities | | Amount | | :--- | :--- | | Fair value as of December 31, 2020 | $129,250 | | Change in valuation inputs or other assumptions | $233,750 | | Fair value as of June 30, 2021 | $363,000 | Condensed Balance Sheet Data (Unaudited) | | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash | $124,393 | $696,567 | | Cash and marketable securities held in Trust Account | $115,015,688 | $115,006,613 | | Total Assets | $115,450,042 | $116,099,067 | | Liabilities & Equity | | | | Total Liabilities | $660,117 | $212,904 | | Common stock subject to possible redemption | $115,000,000 | $110,886,160 | | Total Stockholders' Equity (Deficit) | ($210,075) | $5,000,003 | Condensed Statement of Operations (Unaudited) | | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Operating and formation costs | $667,324 | $871,563 | | Loss from operations | ($667,324) | ($871,563) | | Change in fair value of warrant liabilities | ($184,250) | ($233,750) | | Net loss | ($848,707) | ($1,096,238) | | Basic and diluted net loss per share, Non-redeemable | ($0.24) | ($0.31) | Condensed Statement of Cash Flows (Unaudited) | | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net loss | ($1,096,238) | ($85) | | Net cash used in operating activities | ($572,174) | ($310) | | Net Change in Cash | ($572,174) | ($310) | | Cash – Beginning | $696,567 | $25,000 | | Cash – Ending | $124,393 | $24,690 | Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes the company's financial condition and results, highlighting its pre-business combination SPAC status and net loss drivers - All company activities from inception (February 13, 2019) through June 30, 2021, were organizational, related to the IPO, and identifying and negotiating the business combination with Reservoir[93] Net Loss Summary | Period | Net Loss | Key Drivers | | :--- | :--- | :--- | | Three months ended June 30, 2021 | $848,707 | Operational costs ($667,324) and change in fair value of warrant liability ($184,250) | | Six months ended June 30, 2021 | $1,096,238 | Operational costs ($871,563) and change in fair value of warrant liability ($233,750) | - As of June 30, 2021, the company held $115.0 million in its Trust Account and had $124,393 in cash for operating purposes[99][100] - Critical accounting policies highlighted by management include the classification of common stock subject to possible redemption as temporary equity and the accounting for warrants as a liability measured at fair value[107][108] Quantitative and Qualitative Disclosures Regarding Market Risk The company reports minimal market risk exposure due to short-term investments in U.S. government securities - The company believes there is no material exposure to interest rate risk due to the short-term nature of its investments held in the trust account[113] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Based on an evaluation, the principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2021[115] - No changes in internal control over financial reporting occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[116] Part II. Other Information Legal Proceedings The company reported no legal proceedings - The company has no legal proceedings to report[118] Risk Factors As a smaller reporting company, the company is not required to provide disclosures under this item - Disclosure under this item is not required as the company is a smaller reporting company[119] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no previously undisclosed unregistered sales of equity securities during the period - There have been no unregistered sales of equity securities during the three and six months ended June 30, 2021, that were not previously disclosed[120] Defaults Upon Senior Securities The company reported no defaults upon senior securities - The company has no defaults upon senior securities to report[121] Mine Safety Disclosures This item is not applicable to the company - Not applicable[122] Other Information The company reported no other information for this item - The company has no other information to report for this item[123] Exhibits This section lists all exhibits filed, including the Agreement and Plan of Merger and related agreements - Key exhibits filed include the Agreement and Plan of Merger with Reservoir Holdings, Inc., and forms of the Subscription Agreement for the PIPE Investment[126]