Exhibit 99.1
GIGCAPITAL3, INC.
INDEX TO BALANCE SHEET AND NOTES TO BALANCE SHEET
Report of Independent Registered Public Accounting Firm | F-2 |
Balance Sheet | F-3 |
Notes to Balance Sheet | F-4 |
REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM
To the Board of Directors and
Stockholders of GigCapital3, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of GigCapital3, Inc. (a Delaware corporation) (the “Company”) as of May 18, 2020, and the related notes (collectively referred to as the “financial statement”). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of May 18, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
The financial statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.
/s/ BPM LLP
We have served as the Company’s auditor since 2020.
San Jose, California
May 26, 2020
F-2 |
BALANCE SHEET
AS OF MAY 18, 2020
ASSETS | ||||
Current assets: | ||||
Cash | $ | 2,330,614 | ||
Prepaid expenses and other current assets | 22,000 | |||
Total current assets | 2,352,614 | |||
Cash held in Trust Account | 202,000,000 | |||
TOTAL ASSETS | $ | 204,352,614 | ||
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ | 14,336 | ||
Accrued liabilities | 190,515 | |||
Total current liabilities | 204,851 | |||
Deferred underwriting fee payable | 8,000,000 | |||
Total liabilities | 8,204,851 | |||
Commitmentsandcontingencies (Note 5) | ||||
Common stock subject to possibleredemption,18,925,520 shares at a redemptionvalueof $10.10 per share | 191,147,752 | |||
Stockholders’equity | ||||
Preferred stock, par value of $0.0001 per share;1,000,000sharesauthorized;none issuedor outstanding | – | |||
Common stock,par value of $0.0001 per share; 100,000,000 sharesauthorized;7,717,959 shares issued and outstanding (excluding 18,925,520 shares subject to possible redemption) (l) | 772 | |||
Additional paid-in capital | 5,026,087 | |||
Accumulated deficit | (26,848 | ) | ||
Total Stockholders’ equity | 5,000,011 | |||
TOTAL LIABILITIES,REDEEMABLE COMMON STOCK AND STOCKHOLDERS’EQUITY | $ | 204,352,614 |
(1) | This number includes up to 750,000 Founder Shares (as described in Note 4) subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. |
The accompanying notes are an integral partofthis balancesheet.
F-3 |
NOTES TO BALANCE SHEET
Note 1-Organization and Plan of Business Operations
Organization and General
GigCapital3, Inc. (the “Company”) was incorporated in Delaware on February 3, 2020. TheCompanywas founded for the purpose of effecting a merger, capitalstock exchange,asset acquisition,stockpurchase, reorganization orsimilarbusiness combination with one or more businesses (the “Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the SecuritiesActof 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the“JOBSAct”).
As of May 18, 2020, the Company had not commenced any operations. All activity for the periodfromFebruary 3, 2020 (date of inception) through
May 18, 2020 relates totheCompany’s formation and the initial public offering (the “Offering”) (Note 3). The Company will not generate any operating revenues until after completion of the Business Combination,attheearliest.The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Offering. The Company hasselectedDecember 31 as its fiscal year end.
On May 13, 2020, the Securities and Exchange Commission (“SEC”) declared the Company’s initial RegistrationStatementon Form S-1, as amended by and including the Post-Effective Amendment No. 1 thereto filed on May 13, 2020, in connection with the Offering of$200.0million, effective. The Companyenteredinto an underwriting agreement on May 13, 2020 to conduct the Offering of 20,000,000 units (the “Public Units”) in the amount of $200.0 million in gross proceeds, with a 45-day option provided to the Underwriters (as defined below) to purchase up to 3,000,000 additional Public Units solely to cover over-allotments, if any, in the amount of up to $30.0 million in additional gross proceeds. Each Public Unit consists of one share of the Company’s common stock (a “Public Share”), $0.0001 par value (“Common Stock”), and three-fourths (3/4) of one redeemable warrant (a “Public Warrant”). Each whole Public Warrant is exercisable for one share of Common Stock at a price of $11.50 per full share.
As further discussed inNote4,simultaneouslywith the closing of the Offering, the Company consummated the private placement (“Private Placement”) of 893,479 units (the“PrivatePlacement Units”) at a price of$10.00per Private Placement Unit. The Company’s sponsor, GigAcquisitions3, LLC, a Delaware limited liability company (the“Founder”)purchased 650,000 Private Placement Units and Nomura Securities International, Inc. (“Nomura”), Oppenheimer & Co. Inc. (“Oppenheimer”) and Odeon Capital Group LLC (“Odeon”) (collectively, the “Underwriters”) purchased 243,479 Private Placement Units in the aggregate. The Private Placement generated aggregate gross proceeds of $8,934,790 consisting of $6,500,000 from the sale of the Private Placement Units to the Founder and $2,434,790 from the sale of the Private Placement Units to the Underwriters.
Following the closing of the Offering, net proceeds in the amount of$196,000,000from thesaleof thePublic Unitsin the Offering and proceeds in the amount of$6,000,000from thesaleof Private PlacementUnits,for a total of $202,000,000,wereplaced in a trustaccount(“Trust Account”) (discussed below).
Transaction costsamountedto $12,785,179, consisting of $4,000,000 of underwriting fees, $8,000,000 of deferred underwriting feesand $785,179of Offering costs. The Company’s remaining cash after payment of the Offering costs is held outside of the Trust Accountforworking capital purposes.
The Trust Account
The funds in the TrustAccountwill be invested only inU.S.government treasury bills with a maturity of one hundredandeighty-five (185) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the InvestmentCompanyAct of 1940 which invest only in directU.S.government obligations. Funds willremainintheTrust Accountuntil theearlier of (i) theconsummationoftheBusiness Combination or (ii)the distributionoftheTrust Account asdescribed below.Theremainingproceeds fromtheOffering outsidetheTrust Accountmay be used to payforbusiness,legaland accountingdue diligence expenseson acquisitiontargetsand continuing general and administrative expenses.
The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to pay taxes none of the funds held in the Trust Account will be released until the earlier of: (i) the completion of the Business Combination; (ii) the redemption of 100% of the Public Shares included in the Public Units sold in the Offering if the Company is unable to complete a Business Combination within 18 months from the closing of the Offering; or (iii) the redemption of the Public Shares in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if it does not complete the Business Combination within 18 months from the closing of the Offering
F-4 |
Business Combination
The Company’smanagement has broad discretionwith respect to the specific application of thenet proceedsof the Offering, although substantially all ofthe net proceedsofthe Offeringareintended to begenerally appliedtowardconsummating aBusinessCombinationwith(or acquisition of) aTarget Business.Asused herein,“TargetBusiness” must bewithoneormore target businessesthat togetherhavea fairmarketvalue equaltoatleast80% ofthe balance in theTrust Account(less taxes payableoninterestearned) atthe time theCompany signsa definitiveagreementinconnection withtheBusiness Combination. Thereis noassurancethatthe Company willbeabletosuccessfully effect a Business Combination.
The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to have their shares redeemed by the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to redeem their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval unless a vote is required by New York Stock Exchange rules. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of Common Stock voted are voted in favor of the Business Combination. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of a Business Combination. In such case, the Company would not proceed with the redemption of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.
Ifthe Companyholdsa stockholder voteorthereisa tenderofferfor sharesin connectionwith aBusinessCombination, apublicstockholder willhave theright toredeem itsshares for an amountincash equalto its prorata share oftheaggregate amountthenon depositintheTrustAccount as oftwo business days prior to the consummationofthe BusinessCombination,including interest but less taxespayable.As a result, such shares of Common Stock arerecorded at the redemption amountand classified astemporaryequity.Theamountin the TrustAccount of $202,000,000 represents20,000,000 PublicShares at$10.10 per PublicShare.
The Company will have 18 months from the closing date of the Offering to complete a Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the Public Shares for a per share pro rata portion of the Trust Account, including interest, but less taxes payable (less up to $100,000 of such net interest to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its creditors and remaining stockholders, as part of its plan of dissolution and liquidation. The Founder, the Underwriters, and Messrs. Weightman, Wang and Betti-Berutto (the “Insiders”) have entered into letter agreements with the Company, pursuant to which they will waive their rights to participate in any redemption with respect to their initial shares; however, if the Founder, the Underwriters or the Insiders or any of the Company’s officers, directors or affiliates acquire shares of Common Stock in or after the Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not complete a Business Combination within the required time period.
In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Public Unit in the Offering.
F-5 |
Note2-SignificantAccountingPolicies
Basis of Presentation
Theaccompanyingbalancesheet oftheCompanyhas beenpreparedinconformity with accountingprinciplesgenerally acceptedin theUnitedStatesof America (“GAAP”) and pursuantto therules and regulations oftheSEC.
EmergingGrowth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.
Concentration of Credit Risk
FinancialinstrumentsthatpotentiallysubjecttheCompanyto concentrations of creditriskconsist of cashaccounts in financial institutions, which at times,mayexceed federallyinsured limits.The Companyhas notexperiencedlossesontheseaccountsand management believes theCompanyis notexposedtosignificantriskson such accounts.
Cash
TheCompanyconsiders allshort-terminvestmentswithamaturity ofthree months or lesswhenpurchased to be cash equivalents.
Cash held in TrustAccount
As of May18,2020,theassets heldinthe Trust Account wereheldin cash.
CommonStock subjectto possible redemption
Common stock subject tomandatory redemption(if any)is classifiedas aliability instrumentandis measuredat fair value.Conditionally redeemable common stock (including common stockthatfeaturesredemption rightsthat are either withinthecontrol ofthe holderor subjectto redemption upon theoccurrenceof uncertaineventsnotsolelywithin the Company’s control) is classified as temporary equity.At all other times, common stock is classifiedasstockholders’ equity.The Company’s Common Stock features certain redemption rights that are considered to be outside of the Company’s controlandsubject to occurrence of uncertain future events. Accordingly, as of May 18, 2020, Common Stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. As of May 18, 2020, 18,925,520 shares of Common Stock were issuedandoutstanding and subject to possible redemption.
F-6 |
Fair Value of Financial Instruments
The fair value of the Company’s assetsandliabilities approximates the carryingamountsrepresented in the balancesheet.
Use of Estimates
The preparation of the balancesheetin conformity with GAAP requires the Company’s management to makeestimates andassumptions that affect the reported amounts of assets and liabilitiesanddisclosure of contingentassetsand liabilities at the date of the balance sheet and the reported amounts of expenses during the reporting period.Actual results could differ from those estimates.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes. Deferred taxassetsand liabilities are recognized for the estimated future tax consequences attributable to differences between the balance sheet carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in theyearsin which those temporary differences are expected to be recovered or settled. The effect on deferred taxassetsand liabilities of a change in tax rates is recognized in incomein the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The Company prescribes a recognition threshold and a measurement attribute for the financialstatementrecognitionandmeasurement of tax positions taken or expected to be taken inatax return.Forthose benefits to berecognized, atax position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefitsasof May 18, 2020. The Company recognizes accrued interestandpenalties relatedtounrecognized tax benefits as incometaxexpense.Noamounts were accrued forthepayment of interestandpenalties as of May 18, 2020.TheCompanyis currently not aware of any issues under review that could result in significantpayments, accruals or material deviation from its position.The Company issubjectto income taxexaminationsby major taxing authoritiessinceinception.
Recent Accounting Pronouncements
The Company does not believe thatanyrecently issued,but not yet effective, accounting pronouncements,if currently adopted,would have a materialeffecton theaccompanyingbalance sheet.
Note 3-Offering
On May 18, 2020, theCompanycompleted the Offering whereby the Company sold 20,000,000Public Unitsataprice of $10.00 per Public Unit.Each PublicUnit consists of one of the Public Shares and three-fourths (3/4) of a Public Warrant.Each whole Public Warrant is exercisable for one share of Common Stock at a price of $11.50 per full share. As a result, at least four Public Warrants must be exercised in order to obtain whole shares of Common Stock upon the exercise of the Public Warrants. Under the terms of the warrantagreementdated May 18, 2020 (the “Warrant Agreement”), theCompanyhas agreed to use its best efforts to file a new registrationstatementunder the Securities Act,following the completion of the Company’s BusinessCombination to register the shares of Common Stock underlying the Public Warrants.
F-7 |
No fractional shares will be issued upon exercise of the Public Warrants. If, upon exercise of the Public Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to the Public Warrant holder. Each Public Warrant will become exercisable on the later of 30 days after the completion of the Company’s Business Combination or 12 months from the closing of the Offering and will expire five years after the completion of the Company’s Business Combination or earlier upon redemption or liquidation. However, if the Company does not complete a Business Combination on or prior to the 18-month period allotted to complete the Business Combination, the Public Warrants will expire at the end of such period. If the Company is unable to deliver registered shares of Common Stock to the holder upon exercise of the Public Warrants during the exercise period, there will be no net cash settlement of these Public Warrants and the Public Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the Warrant Agreement. Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants in whole and not in part at a price of $0.01 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of Common Stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Public Warrant holders.
Note 4-Related Party Transactions
Founder Shares
During the period from February 3, 2020 (date of inception) to February 14,2020,the Founder purchased 5,735,000 shares of Common Stock (the “Founder Shares”) for an aggregate purchase price of $25,000, or $0.0044 per share. The Company also issued 5,000 shares of Common Stock, solely in consideration of future services, to each of the Insiders pursuant to Insider Shares Grant Agreements dated May 13, 2020 between the Company and each of the Insiders, for an aggregate issuance of 15,000 shares of Common Stock (the “Insider Shares”).The Insider Shares are subjecttoforfeitureiftheindividual resignsor the services are terminated for causepriorto the completion of theBusinessCombination.The Founder Sharesare identical to the Common Stock included in the Public Units being sold in the Offering except that the Founder Shares are subject to certain transfer restrictions, as described in more detail below. The Founders have agreed to forfeit up to 750,000 Founder Sharesto the extent that the over-allotment option is not exercised in full by the Underwriters.The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that the Founders and Insiders collectively will own 20% of the Company’s issued and outstanding shares after the Offering.
F-8 |
Private Placement
The Founder and the Underwriters purchased from the Company an aggregate of 650,000 and 243,479 Private Placement Units, respectively, at a price of$10.00 per Private Placement Unit in a private placement that occurred simultaneously with the completion of the Offering. Each Private Placement Unit consists of one share of the Company’s Common Stock,$0.0001 par valueandthree-fourths (3/4) of one warrant (a “Private Placement Warrants”). Each whole Private PlacementWarrant will be exercisable for $11.50 per share, and the exercise price of the Private Placement Warrants may be adjusted in certain circumstances as described in Note 3.Under the terms of the Warrant Agreement,the Company has agreed to use its best efforts to file a new registration statement under the Securities Act,following the completion of the Company’s Business Combination.
No fractional shares will be issued upon exercise of the Private Placement Warrants. If, upon exercise of the Private Placement Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to the Private Placement Warrant holder. Each Private Placement Warrant will become exercisable on the later of 30 days after the completion of the Company’s Business Combination or 12 months from the closing of the Offering and will expire five years after the completion of the Company’s Business Combination or earlier upon redemption or liquidation. However, if the Company does not complete a Business Combination on or prior to the 18-month period allotted to complete the Business Combination, the Private Placement Warrants will expire at the end of such period. If the Company is unable to deliver registered shares of Common Stock to the holder upon exercise of the Private Placement Warrants during the exercise period, there will be no net cash settlement of these Private Placement Warrants and the Private Placement Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the Warrant Agreement. Once the Private Placement Warrants become exercisable, the Company may redeem the outstanding Private Placement Warrants in whole and not in part at a price of $0.01 per Private Placement Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of Common Stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Private Placement Warrant holders.
The Company’s Founder, the Insiders and the Underwriters have agreed not to transfer, assign or sell any of their respective Founder Shares, shares held by the Insiders, Private Placement Units, shares or other securities underlying such Private Placement Units that they may hold until the date that is (i) in the case of the Founder Shares or shares held by the Insiders, the earlier of (A) 12 months after the date of the consummation of the Company’s Business Combination or (B) subsequent to the Company’s Business Combination, (x) the date on which the last sale price of the Company’s Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 90 days after the Company’s Business Combination, or (y) the date on which the Company consummates a liquidation, merger, stock exchange or other similar transaction after the Company’s Business Combination which results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property, and (ii) in the case of the Private Placement Units and shares or other securities underlying such Private Placement Units, until 30 days after the completion of the Company’s Business Combination.
If the Company does not complete a Business Combination, then a portion of the proceeds from the sale of the Private Placement Units will be part of the liquidating distribution to the public stockholders.
Administrative Services Agreement and Other Agreements
The Company has agreed to pay $20,000 a month for office space, administrative services and secretarial support to an affiliate of the Founder,GigFounders, LLC. Services commenced on May 14,2020,the date the securities were first listed on the New York Stock Exchange, and will terminate upon the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company.
Note 5-Commitments and Contingencies
Registration Rights
The Company’s Founder, the Underwriters and the Insiders will be entitled to registration rights pursuant to a registration rights agreement signed on May 13, 2020. These holders will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by the Company. The Company will bear the expenses incurred in connection with the filing of any such registration statements. There will be no penalties associated with delays in registering the securities under the proposed registration rights agreement.
F-9 |
Underwriters Agreement
The Companygrantedthe underwriters a45-dayoption to purchaseupto 3,000,000 additional Public Units tocoverany over-allotments, at theinitial publicofferingprice lesstheunderwriting discountsandcommissions.
The Company paid an underwriting discount of $0.20 per Public Unit offering price to the Underwriters at the closing of the Offering. The underwriting discount was paid in cash. In addition, the Company has agreed to pay deferred underwriting commissions of $0.40 per Public Unit, or $8,000,000 (or up to $9,200,000 if the Underwriters’ over-allotment option is exercised in full) in the aggregate. The deferred underwriting commission will become payable to the Underwriters from the amount held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement, including the performance of services described below. As further described in Note 4, the Underwriters have purchased 243,479 shares of common stock, $0.0001 par value, for an aggregate purchase price of $2,434,790 (and have agreed to purchase an additional 36,521 shares for an aggregate total of 280,000 shares of common stock for an aggregate purchase price of $2,800,000 if the Underwriters’ over-allotment option is exercised in full).
The Underwriters will use their commercially reasonable efforts to provide the Company with the following services: 1) originating and introducing the Company to potential targets for a Business Combination; 2) arranging institutional investor meetings on the Company’s behalf in connection with obtaining financing for the Business Combination; 3) assistingthe Companyin meeting its securities exchange listing requirements following the closing of the Offering; and 4) providing capital markets advice and liquidity tothe Companyfollowing the closing of the Offering. Ifthe Companyuses its best efforts (and the Underwriters use commercially reasonable efforts) to obtain financing in private placements or privately negotiated transactions, but notwithstanding such efforts, the Company does not have sufficient cash necessary to consummate the Business Combination and pay the deferred underwriting commission,the Companyand the Underwriters will cooperate in good faith to come to a mutually-satisfactory solution with respect to the payment of the deferred underwriting commission so as to ensure thatthe Company’sobligation to pay the deferred underwriting commission shall not impede the closing of the Business Combination.
Note6-Stockholders’ Equity
Common Stock
The authorized Common Stock oftheCompanyincludes up to 100,000,000shares. Holders oftheCompany’s Common Stock are entitledtoone vote for each shareofCommon Stock. As ofMay 18, 2020,therewere7,717,959shares of Common Stockissuedandoutstandingandnotsubjectto possibleredemption,750,000of which are forfeitable asdescribed inNote4.
Includedinthe outstanding shares ofCommonStock are the aggregate of 15,000 Insider Shares. The Insider Shares are subjecttoforfeitureiftheindividual resignsor the services are terminated for causepriorto the completion of theBusinessCombination.
Preferred Stock
TheCompanyisauthorized toissue 1,000,000shares ofpreferredstock with suchdesignations,voting and otherrightsandpreferencesasmay be determinedfrom time to timebytheBoardofDirectors.Asof May 18, 2020, there werenoshares ofpreferredstock issuedandoutstanding.
F-10 |