NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
1 — Description of Organization, Business Operations and Basis of Presentation
SCVX
Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on November 15, 2019. The Company
was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses (the “Business Combination”). Although the Company is not
limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its
search for a target business in the cybersecurity sector. The Company is an emerging growth company and, as such, the Company
is subject to all of the risks associated with emerging growth companies.
As
of March 31, 2020, the Company had not commenced any operations. All activity for the period from November 15, 2019 (inception)
through March 31, 2020 relates to the Company’s formation and the initial public offering described below, and, since the
closing of the Initial Public Offering (as defined below), the search for a prospective initial Business Combination. The Company
will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The
Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds
derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The
Company’s sponsor is SCVX USA LLC, a Delaware limited liability company (the “Sponsor”). The registration
statement for the Initial Public Offering was declared effective on January 23, 2020. On January 28, 2020, the Company consummated
the Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A
ordinary shares included in the Units, the “Public Shares”), including the issuance of 3,000,000 Units as a result
of the underwriters’ exercise of their over-allotment option in full, at $10.00 per Unit, generating gross proceeds
of $230.0 million, and incurring offering costs of approximately $13.3 million, inclusive of $8.05 million in deferred
underwriting commissions (Note 5).
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”)
of 6,600,000 warrants (the “Private Placement Warrants”) to the Sponsor at a purchase price of $1.00 per Private
Placement Warrant, generating gross proceeds to the Company of $6.6 million (Note 4).
Upon
the closing of the Initial Public Offering and the Private Placement, $230.0 million ($10.00 per Unit) of the net proceeds
of the Initial Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (the “Trust
Account”), located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and
was invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act
(as defined below), with a maturity of 185 days or less or in any open-ended investment company that holds itself out
as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of
the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and
(ii) the distribution of the Trust Account as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied
generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business
Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market
value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable
on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the
Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Company will provide its holders (the “Public Shareholders”) of its Class A ordinary shares, par value $0.0001, sold
in the Initial Public Offering (the “Public Shares”), with the opportunity to redeem all or a portion of their Public
Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the
Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated
to be $10.00 per Public Share). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares
will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5).
These Public Shares are classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such
case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon
such consummation of a Business Combination and a majority of the shares voted are voted in favor of the Business Combination.
If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other
legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association (the “Amended
and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the
U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a
Business Combination. If, however, shareholder approval of the transactions is required by law, or the Company decides to obtain
shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation
pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem
their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder
approval in connection with a Business Combination, the initial shareholders (as defined below) have agreed to vote their Founder
Shares (as defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a
Business Combination. Subsequent to the consummation of the Initial Public Offering, the Company adopted an insider trading policy
which requires insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession
of any material non-public information and (ii) to clear all trades with the Company’s Chief Financial Officer (or
his or her designee) prior to execution. In addition, the initial shareholders have agreed to waive their redemption rights with
respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
Notwithstanding
the foregoing, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is restricted
from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial
Public Offering, without the prior consent of the Company.
The
Company’s Sponsor, officers and directors (the “initial shareholders”) have agreed not to propose an amendment
to the Amended and Restated Memorandum and Articles of Association (a) that would modify the substance or timing of the Company’s
obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination within 24 months from
the closing of the Initial Public Offering, or January 28, 2022 (the “Combination Period”) or (b) with respect to
any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company
provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If
the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations
except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes
payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’
rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s
board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under
Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business
Combination within the Combination Period. However, if the Sponsor or members of the Company’s management team acquire Public
Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with
respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters
have agreed to waive their rights to their deferred underwriting commission (Note 5) held in the Trust Account in the event the
Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included
with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. 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 only $10.00 per share initially held in the Trust Account. In order to protect the amounts held
in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services
rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into
a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims
by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust
Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain
liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover,
in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible
to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will
have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective
target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right,
title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity
As
of March 31, 2020, the Company had approximately $1.2 million in its operating bank accounts, and working capital of approximately
$1.2 million.
Prior
to the completion of the Initial Public Offering and Private Placement, the Company’s liquidity needs were satisfied through
a capital contribution of $25,000 from the Sponsor in exchange for the issuance of the Founder Shares, and a borrowing of approximately
$139,000 under the Note (as defined below) issued to the Sponsor. The Company fully repaid the Note to the Sponsor on January
28, 2020. Subsequent to the consummation of the Initial Public Offering and Private Placement, the Company’s liquidity needs
have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the
Sponsor, or certain of the Company’s officers and directors, may, but are not obligated to, provide the Company with Working
Capital Loans (as defined below in Note 4). The Working Capital Loans will either be repaid upon consummation of a Business Combination,
without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into
warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the
Private Placement Warrants.
On
January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain
of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based
on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19
outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including
the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19
outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets
and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position
and cash flows may be materially adversely affected.
Based
on the foregoing, management believes that the Company has sufficient liquidity to meet its anticipated obligations until the
earlier of the consummation of the initial Business Combination or liquidation.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Basis
of Presentation
The
accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally
accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations
of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management,
the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary
for the fair statement of the balances and results for the periods presented. Operating results for the period for the three months
ended March 31, 2020 are not necessarily indicative of the results that may be expected through December 31, 2020.
The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and
notes thereto included in the Form 8-K and the final prospectus filed by the Company with the SEC on February 3, 2020 and January
24, 2020, respectively.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart
Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to,
not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of
the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy
statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously approved.
Further,
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 an emerging growth 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 an election to opt out is
irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a 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 standard at the time private companies adopt the new or revised standard.
This
may make comparison of the Company’s financial statements with another public company that is neither an emerging growth
company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used.
Note
2 — Summary of Significant Accounting Policies
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
such financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those
estimates.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these
accounts and management believes the Company is not exposed to significant risks on such accounts.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had approximately $230.3 million and $0 in cash equivalents held in the Trust Account as of March 31, 2020 and December
31, 2019, respectively.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Financial
Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value
Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
As
of March 31, 2020 and December 31, 2019, the carrying values of cash and accrued expenses approximate their fair values due to
the short-term nature of the instruments.
Offering
Costs Associated with the Initial Public Offering
Offering
costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that were directly
related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public
Offering.
Class A
Ordinary Shares Subject to Possible Redemption
Class A
ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that
are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified
as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary
shares subject to possible redemption at the redemption amount are presented at redemption value as temporary equity, outside
of the shareholders’ equity section of the Company’s balance sheet.
Net
Loss Per Ordinary Share
Net
loss per share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period.
An aggregate of 21,843,431 Class A ordinary shares subject to possible redemption at March 31, 2020 was excluded from the calculation
of basic loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account
earnings. The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement
to purchase an aggregate of 18,100,000 Class A ordinary shares in the calculation of diluted loss per ordinary share, since they
are not yet exercisable.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Reconciliation
of net loss per ordinary share
The
Company’s net income is adjusted for the portion of income that is attributable to Class A ordinary shares subject to possible
redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company.
Accordingly, basic and diluted loss per ordinary share is calculated as follows:
|
|
For the Three Months Ended March 31, 2020
|
|
|
|
|
|
Net income
|
|
$
|
112,714
|
|
Less: Income attributable to Class A ordinary shares subject to possible redemption
|
|
|
(268,715
|
)
|
Adjusted net loss
|
|
$
|
(156,001
|
)
|
|
|
|
|
|
Weighted average ordinary shares outstanding, basic and diluted
|
|
|
6,571,363
|
|
|
|
|
|
|
Basic and diluted net loss per ordinary share
|
|
$
|
(0.02
|
)
|
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.”
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between
the financial statements 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 the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in 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.
FASB
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more
likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31,
2020 and December 31, 2019. The Company’s management determined that the Cayman Islands is the Company’s only major
tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
No amounts were accrued for the payment of interest and penalties for the three months ended March 31, 2020. The Company is currently
not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is subject to income tax examinations by major taxing authorities since inception.
The
Company is considered a Cayman Islands exempted company, and is presently not subject to income taxes or income tax filing requirements
in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Recent
Accounting Pronouncements
The
Company’s management does not believe that there are any recently issued, but not yet effective, accounting pronouncements
that, if currently adopted, would have a material effect on the Company’s financial statements.
Note
3 — Initial Public Offering
On
January 28, 2020, the Company sold 23,000,000 Units, including the issuance of 3,000,000 Units as a result of the underwriters’
exercise of their over-allotment option in full, at $10.00 per Unit in the Initial Public Offering. Each Unit consists
of one Class A ordinary share, and one-half of one redeemable warrant (each, a “Public Warrant”). Each Public
Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (Note
6).
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
4 — Related Party Transactions
Founder
Shares
In
November 2019, the Sponsor purchased 5,750,000 Class B ordinary shares, par value $0.0001 (the “Founder Shares”),
for an aggregate price of $25,000. In December 2019, the Sponsor transferred an aggregate of 1,092,500 Founder Shares to members
of the Company’s management team. The holders of the Founder Shares have agreed to forfeit up to an aggregate of 750,000
Founder Shares, on a pro rata basis, to the extent that the over-allotment option was not exercised in full by the underwriters.
On January 28, 2020, the over-allotment option was exercised in full. Accordingly, no Founder Shares were forfeited.
The
initial shareholders agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until
the earlier to occur of: (1) one year after the completion of the initial Business Combination and (2) the date on which the Company
consummates a liquidation, merger, share exchange, reorganization, or other similar transaction after the initial Business Combination
that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities
or other property. Notwithstanding the foregoing, if the last reported sale price of the Company’s Class A ordinary shares
equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after
the initial Business Combination, the Founder Shares will be released from the lock-up.
Private
Placement Warrants
Simultaneously
with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,600,000 Private Placement Warrants
at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $6.6 million. Each whole Private Placement
Warrant is exercisable for one whole Class A ordinary share at a price of $11.50 per share. Certain proceeds from the Private
Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does
not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private
Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or
its permitted transferees.
The
Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell
any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Related
Party Loans
On
November 19, 2019, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses pursuant to a
promissory note (the “Note”). This loan was non-interest bearing and payable upon the completion of the Initial
Public Offering. The Company borrowed approximately $139,000 under the Note and fully repaid this amount on January 28, 2020.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the
Sponsor, or certain of the Company’s officers and directors, may, but are not obligated to, loan the Company funds as may
be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the
Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would
be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company
may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust
Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if
any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million
of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per
warrant. The warrants would be identical to the Private Placement Warrants. As of March 31, 2020, the Company had no borrowings
under any Working Capital Loans.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Administrative
Support Agreement
Commencing
on the date that the Company’s securities were first listed on the New York Stock Exchange, the Company agreed to pay the
Sponsor a total of $10,000 per month for office space, administrative and support services. Upon completion of the Initial Business
Combination or the Company’s liquidation, the Company will cease paying these monthly fees. The Company incurred $30,000
in expenses in connection with such services during the three months ended March 31, 2020, as reflected in the accompanying unaudited
condensed statement of operations. As of March 31, 2020, an aggregate of $30,000 in accrued expenses with related party was outstanding,
as reflected in the accompanying unaudited condensed balance sheet.
Note
5 — Commitments & Contingencies
Registration
Rights
The
holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans,
if any, are entitled to registration rights pursuant to a registration rights agreement. These holders will be entitled to certain
demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will
not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable
lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing
of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the final prospectus relating to the Initial Public Offering to purchase
up to 3,000,000 additional Units to cover over-allotments at the Initial Public Offering price less the underwriting discounts
and commissions. The underwriters fully exercised their over-allotment option on January 28, 2020.
The
underwriters were entitled to an underwriting discount of $0.20 per unit, or $4.6 million in the aggregate, which was paid
upon the closing of the Initial Public Offering. In addition, $0.35 per unit, or $8.05 million in the aggregate, will be
payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from
the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms
of the underwriting agreement.
Note
6 — Shareholders’ Equity
Class
A Ordinary Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value
of $0.0001 per share. There were no Class A ordinary shares issued and outstanding as of December 31, 2019. As of March 31, 2020,
there were 23,000,000 Class A ordinary shares outstanding, including 21,843,431 Class A ordinary shares subject to possible redemption
that are classified as temporary equity in the accompanying balance sheet.
Class
B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value
of $0.0001 per share. As of March 31, 2020 and December 31, 2020, there were 5,750,000 Class B ordinary shares outstanding. Of
the 5,750,000 Class B ordinary shares outstanding as of December 31, 2019, an aggregate of up to 750,000 shares were subject
to forfeiture to the Company for no consideration to the extent that the underwriters’ over-allotment option was not
exercised in full or in part. On January 28, 2020, the over-allotment option was exercised in full. Accordingly, no Class B ordinary
shares were forfeited.
Class
A ordinary shareholders and Class B ordinary shareholders of record are entitled to one vote for each share held on all matters
to be voted on by shareholders and vote together as a single class, except as required by law; provided, that, prior to the Company’s
initial Business Combination, holders of the Class B ordinary shares will have the right to elect all of the Company’s directors
and remove members of the board of directors for any reason, and holders of the Class A ordinary shares will not be entitled to
vote on the election of directors during such time.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the Initial Business Combination
on a one-for-one basis, subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations,
recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary
shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering
and related to the closing of the initial Business Combination, the ratio at which the Class B ordinary shares will convert into
Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares
agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of
Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis,
20% of the sum of all ordinary shares issued and outstanding upon the completion of the Initial Public Offering plus all Class
A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial Business Combination,
excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination.
Preferred
Shares — The Company is authorized to issue 1,000,000 preferred shares with such designations, voting and other
rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2020
and December 31, 2020, there were no preferred shares issued or outstanding.
Warrants —
Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation
of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days
after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided
in each case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares
issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders
to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities
Act). The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a
Business Combination, the Company will use its reasonable best efforts to file with the SEC a registration statement for the registration,
under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. If the shares issuable
upon exercise of the warrants are not registered under the Securities Act, the Company will be required to permit holders to exercise
their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and the Company will
not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such
exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration
is available. Notwithstanding the above, if the Company’s Class A ordinary shares are at the time of any exercise of a warrant
not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section
18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants
to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company
elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its
reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The
Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
In addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20
per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board
of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares
held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of the initial Business Combination on the date of the completion of the initial Business Combination (net of
redemptions), and (z) the volume weighted average trading price of the ordinary shares during the 20-trading day period starting
on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market
Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal
to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described
below will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except
that the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not
be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited
exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers
or such purchasers’ permitted transferees. If the Private Placement Warrants are held by someone other than the initial
shareholders or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable
by such holders on the same basis as the Public Warrants.
The
Company may call the Public Warrants for redemption (except with respect to the Private Placement Warrants):
|
●
|
in
whole and not in part;
|
|
●
|
at
a price of $0.01 per warrant;
|
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption; and
|
|
●
|
if,
and only if, the last reported closing price of the Class A ordinary shares equals or
exceeds $18.00 per share for any 20 trading days within a 30-trading day period
ending on the third trading day prior to the date on which the Company sends the notice
of redemption to the warrant holders.
|
If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise
the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. Additionally, in no event
will the Company be required to net cash settle any warrants. If the Company is unable to complete the initial Business Combination
within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive
any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held
outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
NOTE
7. FAIR VALUE MEASUREMENTS
The
Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value
at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company
would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an
orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets
and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and
to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable
inputs used in order to value the assets and liabilities:
|
●
|
Level
1: Quoted prices in active markets for identical assets or liabilities. An active market
for an asset or liability is a market in which transactions for the asset or liability
occur with sufficient frequency and volume to provide pricing information on an ongoing
basis.
|
|
●
|
Level
2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted
prices in active markets for similar assets or liabilities and quoted prices for identical
assets or liabilities in markets that are not active.
|
|
●
|
Level
3: Unobservable inputs based on the Company’s assessment of the assumptions that
market participants would use in pricing the asset or liability.
|
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
following table presents information about the Company’s assets that are measured at fair value on a recurring basis at
March 31, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine
such fair value:
Description
|
|
Level
|
|
|
March 31, 2020
|
|
|
December 31,
2019
|
|
Assets held in Trust Account:
|
|
|
|
|
|
|
|
|
|
Money market fund
|
|
|
1
|
|
|
$
|
230,282,947
|
|
|
$
|
-
|
|
Note
7 — Subsequent Events
Management
has evaluated subsequent events to determine if events or transactions occurring through the date the financial statements
were issued required potential adjustment to or disclosure in the financial statements and has concluded that all such
events that would require recognition or disclosure have been recognized or disclosed.