MCAC’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with MCAC’s Financial Statements and footnotes thereto contained in this prospectus.
Unless otherwise indicated or the context otherwise requires, references in this “MCAC’S Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “the company,” “we,” “us,” “our” refer to MCAC before the Business Combination and PLBY Group, Inc. after the Business Combination, and references to “Playboy” refer to Playboy Enterprises, Inc. and its subsidiaries.
Overview
We are a former blank check company formed under the laws of the State of Delaware on November 12, 2019 for the purpose of effecting a capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
We completed our IPO on June 4, 2020. On February 10, 2021, we consummated the previously announced acquisition of all of the issued and outstanding shares of Playboy, in accordance with the Merger Agreement, by and among MCAC, Merger Sub, Playboy and Suying Liu. As contemplated in the Merger Agreement, Merger Sub merged with and into Playboy with Playboy surviving as a wholly-owned subsidiary of MCAC. In addition, in connection with the closing of the Business Combination, MCAC changed its name to “PLBY Group, Inc.”
Results of Operations
Our only activities from inception to December 31, 2020 were organizational activities, those necessary to prepare for the IPO, identifying a target company for the Business Combination and consummating the acquisition of Playboy. We generated non-operating income in the form of interest income on marketable securities held after the IPO and prior to the Business Combination. We have incurred expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses related to the Business Combination.
For the year ended December 31, 2020, we had a net loss of $1,061,802 which consisted of operating costs of $1,093,833 offset by interest earned on marketable securities held in the Trust Account of $31,669 and an unrealized gain on marketable securities held in our Trust Account of $362.
For the period from November 12, 2019 (inception) through December 31, 2019, we had net loss of $492, which consisted of operating costs.
Liquidity and Capital Resources
On June 9, 2020, we consummated the IPO of 5,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $50,000,000. Simultaneously with the closing of the IPO, we consummated the sale of 321,500 Private Units at a price of $10.00 per Private Unit in a private placement to the Sponsor, generating gross proceeds of $3,215,000.
On June 19, 2020, in connection with the underwriters’ election to partially exercise their over-allotment option, we consummated the sale of an additional 749,800 Units and the sale of an additional 33,741 Private Units, generating total gross proceeds of $7,835,410.
Following the IPO, the partial exercise of the over-allotment option and the sale of the Private Units, a total of $58,647,960 was placed in the Trust Account. We incurred $4,010,359 in transaction costs, including $1,437,450 of underwriting fees, $2,012,430 of deferred underwriting fees and $560,479 of other offering costs.
For the year ended December 31, 2020 cash used in operating activities was $371,622. Net loss of $1,061,802 was impacted by interest earned on marketable securities held in the Trust Account of $31,669, an unrealized gain on marketable securities held in the Trust Account of $362 and changes in operating assets and liabilities, which provided $722,211 of cash from operating activities.