UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40051

CHURCHILL CAPITAL CORP VII

(Exact Name of Registrant as Specified in Its Charter)

Delaware

85-3420354

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

640 Fifth Avenue, 12^th Floor

New York, NY 10019

(Address of principal executive offices)

(212) 380-7500

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-fifth of one warrant	CVII.U	The New York Stock Exchange
Shares of Class A common stock	CVII	The New York Stock Exchange
Warrants included as part of the units	CVII WS	The New York Stock Exchange

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	◻	Accelerated filer	◻
Non-accelerated filer	⌧	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ◻

As of May 19, 2021, there were 138,000,000 shares of Class A common stock, $0.0001 par value and 34,500,000 shares of Class B common stock, $0.0001 par value, issued and outstanding.


	Page
Part I. Financial Information	1
Item 1. Financial Statements	1
Condensed Balance Sheets (Unaudited)	1
Condensed Statement of Operations (Unaudited)	2
Condensed Statement of Changes in Stockholders’ Equity (Unaudited)	3
Condensed Statement of Cash Flows (Unaudited)	4
Notes to Condensed Financial Statements (Unaudited)	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	23
Item 4. Controls and Procedures	23
Part II. Other Information	23
Item 1. Legal Proceedings	23
Item 1A. Risk Factors	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3. Defaults Upon Senior Securities	24
Item 4. Mine Safety Disclosures	24
Item 5. Other Information	24
Item 6. Exhibits	25
Part III. Signatures	26


	March 31,		December 31,
	2021		2020
	(unaudited)
ASSETS
Current assets
Cash	$	5,387,910	$	25,000
Prepaid expenses		1,862,223		—
Total Current Assets		7,250,133		25,000
Deferred offering costs		—		11,000
Marketable securities held in Trust Account		1,380,024,151		—
TOTAL ASSETS	$	1,387,274,284	$	36,000

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses		59,383		12,000
Warrant liability		65,718,000		—
Deferred underwriting fee payable		48,300,000		—
Total Liabilities		114,077,383		12,000

Commitments and contingencies

Class A common stock subject to possible redemption, 126,819,690 and no shares at redemption value at as of March 31, 2021 and December 31, 2020, respectively		1,268,196,900		—

Stockholders' Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—		—
Class A common stock, $0.0001 par value; 240,000,000 shares authorized; 11,180,310 and no shares issued and outstanding (excluding 126,819,690 and no shares subject to possible redemption) at March 31, 2021 and December 31, 2020, respectively		1,118		—
Class B common stock, $0.0001 par value; 60,000,000 shares authorized; 34,500,000 shares issued and outstanding at March 31, 2021 and December 31, 2020 (1), respectively		3,450		3,450
Additional paid-in capital		12,647,052		21,550
Accumulated deficit		(7,651,619)		(1,000)
Total Stockholders’ Equity		5,000,001		24,000

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,387,274,284	$	36,000


Operating and formation costs	$	(208,027)
Loss from operations		(208,027)

Other (expense) income:
Loss on Warrant Liability		(6,070,000)
Transaction costs related to Private Placement and Public Warrants		(1,396,743)
Interest earned on marketable securities held in Trust Account		51,619
Unrealized loss on marketable securities held in Trust Account		(27,468)
Other expense, net		(7,442,592)

Loss before income taxes		(7,650,619)
Benefit from income taxes		—
Net loss	$	(7,650,619)

Basic and diluted weighted average shares outstanding, Class A common stock subject to redemption		127,445,077

Basic and diluted net income per share, Class A common stock subject to redemption	$	0.00

Basic and diluted weighted average shares outstanding, Non-redeemable common stock		36,948,426

Basic and diluted net loss per share, Non-redeemable common stock	$	(0.06)


	Class A			Class B			Additional				Total
	Common Stock			Common Stock			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance — January1, 2021	—		—	34,500,000	$	3,450	$	21,550	$	(1,000)	$	24,000

Sale of 138,000,000 Units, net of underwriting discount and offering expenses	138,000,000	$	13,800	—		—		1,280,809,720		—		1,280,823,520

Common stock subject to possible redemption	(127,445,077)		(12,745)	—		—		(1,274,438,025)		—		(1,274,450,770)

Change in value of common stock subject to redemption	625,387		63	—		—		6,253,807		—		6,253,870

Net loss	—		—	—		—		—		(7,650,619)		(7,650,619)

Balance — March 31, 2021	11,180,310	$	1,118	34,500,000	$	3,450	$	12,647,052	$	(7,651,619)	$	5,000,001


Cash Flows from Operating Activities:
Net loss	$	(7,650,619)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(51,619)
Unrealized loss on marketable securities held in Trust Account		27,468
Change in fair value of Warrant Liabilities		6,070,000
Offering cost allocable to Warrant Liabilities		1,396,743
Changes in operating assets and liabilities:
Prepaid expenses		(1,862,223)
Accrued expenses		53,383
Net cash used in operating activities		(2,016,867)

Cash Flows from Investing Activities:
Investment of cash into Trust Account		(1,380,000,000)
Net cash used in investing activities		(1,380,000,000)

Cash Flows from Financing Activities:
Proceeds from sale of Units, net of underwriting discounts paid		1,355,500,000
Proceeds from sale of Private Placements Warrants		32,600,000
Proceeds from promissory note - related party		375,000
Repayment of promissory note - related party		(375,000)
Payment of offering costs		(720,223)
Net cash provided by financing activities		1,387,379,777

Net Change in Cash		5,362,910
Cash — Beginning of period		25,000
Cash — End of period	$	5,387,910

Non-Cash investing and financing activities:
Offering costs included in accrued offering costs	$	6,000
Initial classification of Class A common stock subject to possible redemption	$	1,274,450,770
Change in value of Class A common stock subject to possible redemption	$	(6,253,870)
Deferred underwriting fee payable	$	48,300,000


	As Previously
Balance Sheet as of February 17, 2021 (audited)	Reported		Adjustment		Revised

Warrant liability		—		59,648,000		59,648,000
Class A common stock subject to possible redemption		1,334,098,770		(59,648,000)		1,274,450,770
Additional paid-in capital		4,997,098		1,396,743		6,393,841
Accumulated deficit		(1,000)		(1,396,743)		(1,397,743)


	Three Months
	Ended
	March 31,
	2021
Class A common stock subject to possible redemption
Numerator: Earnings allocable to Class A common stock subject to possible redemption
Interest income	$	47,438
Unrealized loss on investments held in Trust Account		(25,243)
Less: Company’s portion available to be withdrawn to pay taxes		(22,195)
Less: Company’s portion available to be withdrawn for working capital purposes		—
Net income allocable to Class A common stock subject to possible redemption	$	—
Denominator: Weighted Average Class A common stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		127,445,077
Basic and diluted net income (loss) per share, Class A common stock subject to possible redemption	$	0.00

Non-Redeemable Common Stock
Numerator: Net loss minus Net Earnings
Net loss	$	(7,650,619)
Less: Income allocable to Class A common stock subject to possible redemption		—
Non-Redeemable Net loss	$	(7,650,619)
Denominator: Weighted Average Non-redeemable Common stock
Basic and diluted weighted average shares outstanding, Non-redeemable Common stock		36,948,426
Basic and diluted net loss per share, Non-redeemable Common stock	$	(0.06)


		March 31,
Description	Level	2021		At Issuance
Assets:
Marketable securities held in Trust Account	1	$	1,380,024,151	$	1,380,000,000

Liabilities:
Warrant liability- Public Warrants	3		29,532,400		27,048,000
Warrant liability- Private Placement Warrants	3		36,186,000		32,600,000


	March 31, 2021			At Issuance
Exercise price	$	11.50		$	11.50
Stock price	$	9.76		$	9.81
Volatility		20	%		19.25	%
Probability of completing a Business Combination		80	%		80	%
Term		5.25			5.25
Risk-free rate		1.2	%		0.69	%
Dividend yield		0.0	%		0.0	%


	Public		Private Placement		Warrant Liabilities
Warrant liabilities at February 17, 2021 (IPO)	$	—	$	—	$	—
Issuance of Public and Private Warrants		27,048,000		32,600,000		59,648,000
Change in fair value of warrant liabilities		2,484,000		3,586,000		6,070,000
Fair value as of March 31, 2021		29,532,000		36,186,000		65,718,000


		CHURCHILL CAPITAL CORP VII

Date:	May 24, 2021	By:	/s/ Michael Klein
		Name:	Michael Klein
		Title:	Chairman of the Board of Directors
			(Principal Executive Officer)
Date:	May 24, 2021
		By:	/s/ Jay Taragin
		Name:	Jay Taragin
		Title:	Chief Financial Officer
			(Principal Executive Officer, Principal Accounting Officer and Financial Officer)


No.		Description of Exhibit
1.1		Underwriting Agreement, dated February 11, 2021, among the Company and Citigroup Global Markets Inc., as representative of the underwriters (incorporated by reference herein to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
3.1		Amended and Restated Certificate of Incorporation (incorporated by reference herein to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
4.4		Warrant Agreement, dated February 11, 2021, between the Company and Continental Stock Transfer & Trust Company, as warrant agent.
10.1		Form of Letter Agreements, dated February 11, 2021, among the Company and each of its officers and directors and the Sponsor (incorporated by reference herein to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.2		Investment Management Trust Agreement, dated February 11, 2021, between the Company and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference herein to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.3		Registration Rights Agreement, dated February 11, 2021, among the Company and certain other security holders named therein (incorporated by reference herein to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.4.		Private Placement Warrant Purchase Agreement, dated February 11, 2021, between the Company and the Sponsor (incorporated by reference herein to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.5		Indemnity Agreement, dated February 11, 2021, between the Company and Michael Klein (incorporated by reference herein to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.6		Indemnity Agreement, dated February 11, 2021, between the Company and Jay Taragin(incorporated by reference herein to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.7		Indemnity Agreement, dated February 11, 2021, between the Company and Glenn R. August (incorporated by reference herein to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.8		Indemnity Agreement, dated February 11, 2021, between the Company and Bonnie Jonas (incorporated by reference herein to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.9		Indemnity Agreement, dated February 11, 2021, between the Company and Malcolm S. McDermid (incorporated by reference herein to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.10		Indemnity Agreement, dated February 11, 2021, between the Company and Mark Klein (incorporated by reference herein to Exhibit 10.10 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.11		Indemnity Agreement, dated February 11, 2021, between the Company and Karen G. Mills (incorporated by reference herein to Exhibit 10.11 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
10.12		Administrative Services Agreement, dated February 11, 2021, between the Company and an affiliate of the Sponsor (incorporated by reference herein to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021).
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SEC Form 10-Q filed by Churchill Capital Corp VII