UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For
the year ended December 31, 2019
Commission
File Number 001-39204
INTERPRIVATE
ACQUISITION CORP.
(Exact
name of registrant as specified in its charter)
Delaware
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84-3080757
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(State
or Other Jurisdiction
of Incorporation)
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(I.R.S.
Employer
Identification No.)
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1350
Avenue of the Americas
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New
York, NY
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10019
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(Address
of principal executive offices)
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(zip
code)
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(212)
647-0166
(Issuer’s
Telephone Number, Including Area Code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class
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Trading
Symbols
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Name
of Each Exchange on Which Registered
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Units,
each consisting of one share of common stock and one-half of one redeemable warrant
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IPV.U
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The
New York Stock Exchange
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Common
stock, par value $0.0001 per share
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IPV
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The
New York Stock Exchange
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Redeemable
warrants, exercisable for shares of common stock at an exercise price of $11.50 per share
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IPV
WS
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The
New York Stock Exchange
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Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes
☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
of 1934 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 requirement 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 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 emerging growth company. See the 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 ☐
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Accelerated
filer ☐
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Non-accelerated
filer ☒
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Smaller
reporting company ☒
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Emerging
growth company ☒
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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 March 30, 2020, 31,055,500 shares of common stock, par value $0.0001 per share, were issued and outstanding.
Documents
Incorporated by Reference: The information contained in the registrant’s prospectus dated February 3, 2020, as filed with
the Securities and Exchange Commission on February 5, 2020, pursuant to Rule 424(b)(4) (SEC File Nos. 333-235849 and 333-236233)
is incorporated into certain portions of Parts I, II, and III, as disclosed herein.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
annual report, including, without limitation, statements under the heading “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. These forward-looking statements can be identified by the use of forward-looking
terminology, including the words “believes,” “estimates,” “anticipates,” “expects,”
“intends,” “plans,” “may,” “will,” “potential,” “projects,”
“predicts,” “continue,” or “should,” or, in each case, their negative or other variations
or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements
include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination
and any other statements that are not statements of current or historical facts. These statements are based on management’s
current expectations, but actual results may differ materially due to various factors, including, but not limited to our:
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ability
to complete our initial business combination;
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success
in retaining or recruiting, or changes required in, our officers, key employees or directors
following an initial business combination;
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officers
and directors allocating their time to other businesses and potentially having conflicts
of interest with our business or in approving our initial business combination, as a
result of which they would then receive expense reimbursements;
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potential
ability to obtain additional financing to complete an initial business combination;
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pool
of prospective target businesses;
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failure
to maintain the listing on, or the delisting of our securities from, the New York Stock
Exchange (“NYSE”) or an inability to have our securities listed on NYSE or
another national securities exchange following our initial business combination;
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the
ability of our officers and directors to generate a number of potential investment opportunities;
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potential
change in control if we acquire one or more target businesses for stock;
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public
securities’ potential liquidity and trading;
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lack
of a market for our securities;
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use
of proceeds not held in the trust account or available to us from interest income on
the trust account balance; or
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our
financial performance.
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The
forward-looking statements contained in this annual report are based on our current expectations and beliefs concerning future
developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions
that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk
Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except
as may be required under applicable securities laws. These risks and others described under “Risk Factors” may not
be exhaustive.
By
their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances
that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance
and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate
may differ materially from those made in or suggested by the forward-looking statements contained in this annual report. In addition,
even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are
consistent with the forward-looking statements contained in this annual report, those results or developments may not be indicative
of results or developments in subsequent periods.
INTERPRIVATE
ACQUISITION CORP.
FORM
10-K
TABLE
OF CONTENTS
PART
I
ITEM
1. BUSINESS
In
this Annual Report on Form 10-K (the “Form 10-K”), references to the “Company” and to “we,”
“us,” and “our” refer to Interprivate Acquisition Corp.
We are a blank check
company formed under the laws of the State of Delaware on August 16, 2019. We were formed for the purpose of entering into a merger,
share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with
one or more businesses or entities, which we refer to as a “target business.” We may pursue a business combination
opportunity in any business or industry we choose. To date, our efforts have been primarily limited to organizational activities
as well as activities related to this offering. None of our officers, directors, promoters and other affiliates has engaged in
any substantive discussions on our behalf with representatives of other companies regarding the possibility of a potential business
combination with us.
In
August 2019, we issued an aggregate of 5,750,000 shares of our common stock (“founders’ shares”) for an aggregate
purchase price of $25,000, or approximately $0.004 per share, to InterPrivate Acquisition Management LLC, an affiliate of InterPrivate
Capital LLC (“Sponsor”), an entity controlled by Ahmed M. Fattouh, our Chairman and Chief Executive Officer. In December
2019, our Sponsor contributed an aggregate of 718,750 founders’ shares back to our capital for no additional consideration
resulting in there being an aggregate of 5,031,250 founders’ shares outstanding. In February 2020, we effectuated a dividend
of 0.2 shares of common stock for each share of common stock, resulting in there being an aggregate of 6,037,500 founders’
shares outstanding.
In September 2019, we also
issued to designees of EarlyBirdCapital, Inc., the representative of the underwriters in our initial public offering (“IPO”),
an aggregate of 300,000 shares of common stock of which 50,000 shares received by the underwriter were contributed back to our
capital for no additional consideration as a result of the dividend effectuated by us in February 2020 as described above (“representative
shares”) at a price of $0.0001 per share.
On
February 6, 2020 we consummated the IPO of 21,000,000 units. Each unit (“Unit”) consists of one share of common stock
and one-half of one redeemable warrant (“Warrant”), with each whole Warrant entitling the holder to purchase one share
of common stock at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross
proceeds of $210,000,000.
Simultaneously
with the consummation of the IPO, we consummated the private placement (“Private Placement”) of 555,000 Units (“Private
Units”) at a price of $10.00 per Private Unit, generating total proceeds of $5,550,000. The Private Units were sold to the
Sponsor and EarlyBirdCapital and its designees. The Private Units are identical to the Units sold in the IPO, except that the
Warrants underlying the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they
continue to be held by the initial purchasers or their permitted transferees.
On
February 10, 2020 we consummated the sale of an additional 3,150,000 Units that were subject to the underwriters’ over-allotment
option at $10.00 per Unit, generating gross proceeds of $31,500,000. Simultaneously with the closing of the sale of additional
Units, we consummated the sale of an additional 63,000 Private Units at a price of $10.00 per Private Unit, generating total proceeds
of $630,000. Following the closing of the over-allotment option and sale of additional Private Units, an aggregate amount of $241,500,000
has been placed in the Company’s trust account established in connection with the IPO.
For further details regarding our
business, see the section titled “Proposed Business” contained in our prospectus dated February 3, 2020, incorporated
by reference herein.
ITEM
1A. RISK FACTORS
For the risks relating
to our operations, see the section titled “Risk Factors” contained in our prospectus dated February 3, 2020, incorporated
by reference herein. There have been no material changes to such risk factors except as follows:
Our search for a
business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely
affected by the recent coronavirus (COVID-19) outbreak.
In December 2019, a novel
strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and
other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak
of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S.
Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare
community in responding to COVID-19. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread
health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target
business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may
be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability
to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable
to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business
combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information
which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability
to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected.
ITEM
1B. UNRESOLVED STAFF COMMENTS
Not
applicable.
ITEM
2. PROPERTY
We
currently maintain our principal executive offices at 1350 Avenue of the Americas, New York, NY 10019. The cost for this space
is included in the $10,000 per-month fee InterPrivate LLC, an affiliate of our Sponsor, charges us for general and administrative
services. We consider our current office space, combined with the other office space otherwise available to our executive officers,
adequate for our current operations.
ITEM
3. LEGAL PROCEEDINGS
None.
ITEM
4. MINE SAFETY DISCLOSURES
Not
applicable.
PART
II
ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market
Information
Our
units, common stock and warrants are listed on NYSE under the symbols IPV.U, IPV, and IPV WS, respectively.
Holders
As
of March 23, 2020, there were three holders of record of our units, nineteen holders of record of our common stock and one holder
of record of our warrants. We believe we have in excess of 300 beneficial holders of our securities.
Dividends
We
have not paid any cash dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion
of a business combination. The payment of cash dividends in the future will be contingent upon our revenues and earnings, if any,
capital requirements, and general financial condition subsequent to completion of a business combination. The payment of any dividends
subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention
of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does
not anticipate declaring any dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our
initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection
therewith.
Recent
Sales of Unregistered Securities; Use of Proceeds from Registered Securities
In
August 2019, we issued an aggregate of 5,750,000 founders’ shares for an aggregate purchase price of $25,000, or approximately
$0.004 per share, to our Sponsor. In December 2019, our Sponsor contributed an aggregate of 718,750 founders’ shares back
to our capital for no additional consideration resulting in there being an aggregate of 5,031,250 founders’ shares outstanding.
In February 2020, we effectuated a dividend of 0.2 shares of common stock for each share of common stock, resulting in there
being an aggregate of 6,037,500 founders’ shares outstanding.
In September 2019, we
also issued to designees of EarlyBirdCapital, Inc., the representative of the underwriters in our IPO an aggregate of 300,000
shares of common stock of which 50,000 shares received by the underwriter were contributed back to our capital for no additional
consideration as a result of the dividend effectuated by us in February 2020 , representative shares, at a price of $0.0001 per
share.
On
February 6, 2020, we consummated our IPO of 21,000,000 units. Each unit consisted of one share of common stock and one-half of
one redeemable warrant, with each whole warrant entitling the holder to purchase one share of common stock at a price of $11.50
per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $210,000,000. EarlyBirdCapital,
Inc. acted as sole book-running manager of the offering. The securities sold in the IPO were registered under the Securities Act
on a registration statement on Form S-1 (No. 333-235849) which was declared effective by the Securities and Exchange Commission
on February 3, 2020, and a registration statement on Form S-1MEF (No. 333-236233) which became effective automatically upon filing
on February 3, 2020.
Simultaneously
with the consummation of the IPO, we consummated the Private Placement of 555,000 Private Units at a price of $10.00 per Private
Unit, generating total proceeds of $5,550,000. The Private Units were sold to the Sponsor and EarlyBirdCapital and its designees.
The Private Units are identical to the Units sold in the IPO, except that the Warrants underlying the Private Units are non-redeemable
and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their
permitted transferees.
Following
the closing of the IPO on February 6, 2020, an amount of $210,000,000 ($10.00 per Unit) from the net proceeds of the sale of the
Units in the IPO and the sale of the Private Units was placed in a trust account.
On
February 10, 2020 we consummated the sale of an additional 3,150,000 Units that were subject to the underwriters’ over-allotment
option at $10.00 per Unit, generating gross proceeds of $31,500,000. Simultaneously with the closing of the sale of additional
Units, we consummated the sale of an additional 63,000 Private Units at a price of $10.00 per Private Unit, generating total proceeds
of $630,000. A total of $31,500,000 of the net proceeds was deposited into the trust account, bringing the aggregate proceeds
held in the trust account to $241,500,000.
Transaction
costs amounted to $5,310,386 consisting of $4,830,000 of underwriting fees and $480,386 of other offering costs. In addition,
$867,876 of cash was held outside of the Trust Account and is available for working capital purposes.
ITEM
6. SELECTED FINANCIAL DATA
Not
applicable.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction
with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements
and Supplementary Data” of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis
set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these
forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking
Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Results
of Operations
We
have neither engaged in any operations nor generated any revenues to date. Our only activities from August 16, 2019 (inception)
through December 31, 2019 were organizational activities and those necessary to prepare for the IPO, described below. We do not
expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income
in the form of interest income on marketable securities held after the IPO. We incur expenses as a result of being a public company
(for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For
the period from August 16, 2019 (inception) through December 31, 2019, we had a net loss of $1,000, which consists of operating
and formation costs.
Liquidity
and Capital Resources
Until the consummation
of the IPO, our liquidity needs were satisfied through the receipt of $25,000 from our sale of founder shares and promissory note
from our initial shareholders and their affiliates. In September 2019, we issued an unsecured promissory note to InterPrivate Acquisition
Management LLC (the “Promissory Note”), pursuant to which we may borrow up to an aggregate principal amount of $150,000.
The Promissory Note was non-interest bearing and payable on the earlier of (i) September 1, 2020, (ii) the consummation of the
IPO or (iii) the date on which we determined not to proceed with the IPO.
On
February 6, 2020, we consummated the IPO of 21,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $210,000,000.
Simultaneously with the closing of the IPO, we consummated the sale of 555,000 Private Units to our Sponsor and EarlyBirdCapital,
generating gross proceeds of $5,550,000.
On
February 10, 2020, in connection with the underwriters’ exercise of their over-allotment option in full, we consummated
the sale of an additional 3,150,000 Units at a price of $10.00 per Unit, generating total gross proceeds of $31,500,000. In addition,
we also consummated the sale of an additional 63,000 Private Units at $10.00 per Private Unit, generating total gross proceeds
of $32,130,000.
Following the IPO, the
exercise of the over-allotment option and the sale of the Private Units, a total of $241,500,000 was placed in the trust account
and, following the payment of certain transaction expenses, we had $867,876 of cash held outside of the trust account and available
for working capital purposes. We incurred $5,310,386 in IPO related costs, including $4,830,000 of underwriting fees and $480,386
of other costs.
We
intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on
the trust account (less income taxes payable), to complete our business combination. To the extent that our capital stock or debt
is used, in whole or in part, as consideration to complete our business combination, the remaining proceeds held in the trust
account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions
and pursue our growth strategies.
We
intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business
due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target
businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses,
and structure, negotiate and complete a business combination.
In
order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the Sponsor,
or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required.
If we complete a business combination, we would repay such loaned amounts. In the event that a business combination does not close,
we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our
trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00
per unit, at the option of the lender. The units would be identical to the Private Units.
We
do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However,
if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination
are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to
our business combination. Moreover, we may need to obtain additional financing either to complete our business combination or
because we become obligated to redeem a significant number of our public shares upon consummation of our business combination,
in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance
with applicable securities laws, we would only complete such financing simultaneously with the completion of our business combination.
If we are unable to complete our business combination because we do not have sufficient funds available to us, we will be forced
to cease operations and liquidate the Trust Account. In addition, following our business combination, if cash on hand is insufficient,
we may need to obtain additional financing in order to meet our obligations.
Related
Party Transactions
In
August 2019, the Sponsor purchased 5,750,000 founders’ shares for an aggregate price of $25,000. On December 30, 2019, the
Sponsor contributed an aggregate of 718,750 founder shares back to us for no additional consideration and in February 2020, we
effected a dividend of 0.2 shares of common stock for each share of common stock outstanding, resulting in there being an aggregate
of 6,037,500 founder shares outstanding.
The
Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the founder shares until, with
respect to 50% of the founder shares, the earlier of one year after the consummation of a business combination and the date on
which the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after a business
combination and, with respect to the remaining 50% of the founder shares, until the one year after the consummation of a business
combination, or earlier, in either case, if, subsequent to a business combination, we complete a liquidation, merger, stock exchange
or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock
for cash, securities or other property.
In September 2019, we issued
an unsecured promissory note to InterPrivate Acquisition Management LLC, pursuant to which we may borrow up to an aggregate principal
amount of $150,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) September 1, 2020, (ii) the
consummation of the IPO or (iii) the date on which we determined not to proceed with the IPO. At December 31, 2019, $80,808 was
outstanding under the Promissory Note. The outstanding amount of $124,148 was repaid at the closing of the IPO on February 6, 2020.
In
addition, in order to finance transaction costs in connection with a business combination, the Insiders, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”).
If we complete a business combination we would repay the Working Capital Loans out of the proceeds of the trust account released
to us. 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, we 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 $1,500,000 of such Working Capital Loans may be convertible into units of the post business combination entity
at a price of $10.00 per unit. The units would be identical to the Private Units.
We
entered into an agreement whereby, commencing on February 3, 2020, through the earlier of our consummation of a business combination
and the liquidation of the trust account, we will pay an affiliate of one of our executive officers $10,000 per month for office
space, utilities and secretarial and administrative support.
We
entered into an agreement whereby, commencing on the February 3, 2020, through the earlier of our consummation of a business combination
and the liquidation of the trust account, we will pay Minesh Patel, our Vice President, a $10,000 per month fee for assisting
us in negotiating and consummating an initial business combination.
Off-balance
sheet financing arrangements
We
did not have any off-balance sheet arrangements as of December 31, 2019.
Contractual
obligations
We
do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an
agreement to pay an affiliate of one of our executive officers a monthly fee of $10,000 for office space, utilities and secretarial
and administrative support. We began incurring these fees on February 3, 2020 and will continue to incur these fees monthly until
the earlier of the completion of the business combination and our liquidation.
We entered into an agreement
whereby, commencing on the February 3, 2020, through the earlier of the Company’s consummation of a business combination
and the liquidation of the Trust Account, we will pay our Vice President a $10,000 per month fee for assisting us in negotiating
and consummating an initial business combination.
Additionally,
we have engaged EarlyBirdCapital as an advisor in connection with a business combination to assist us in holding meetings with
its shareholders to discuss the potential business combination and the target business’ attributes, introduce us to potential
investors that are interested in purchasing our securities in connection with a business combination, assist us in obtaining shareholder
approval for the business combination and assist us with its press releases and public filings in connection with the business
combination. We will pay EarlyBirdCapital a cash fee for such services upon the consummation of a business combination in an amount
equal to 3.5% of the gross proceeds of the IPO (exclusive of any applicable finders’ fees which might become payable); provided
that up to 33% of the fee may be allocated at our sole discretion to other third parties who are investment banks or financial
advisory firms not participating in the IPO that assist us in identifying and consummating a business combination.
Critical
Accounting Policies
The
preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical
accounting policies.
Recent
accounting standards
Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have
a material effect on our financial statements.
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As
of December 31, 2019, we were not subject to any market or interest rate risk. Following the consummation of our IPO, the
net proceeds of our IPO, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or
bonds with a maturity of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term
nature of these investments, we believe there will be no associated material exposure to interest rate risk.
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This
information appears following Item 15 of this Report and is included herein by reference.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM
9A. CONTROLS AND PROCEDURES.
Evaluation
of Disclosure Controls and Procedures
Disclosure
controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports
filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified
in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information
is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate
to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive
officer and principal financial and accounting officer (our “Certifying Officer”), the effectiveness of our disclosure
controls and procedures as of December 31, 2019, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation,
our Certifying Officer concluded that, as of December 31, 2019, our disclosure controls and procedures were effective.
We
do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls
and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives
of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the
fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent
limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute
assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls
and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s
Report on Internal Controls Over Financial Reporting
This
Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial
reporting or an attestation report of our independent registered public accounting firm due to a transition period established
by rules of the SEC for newly public companies.
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
PART
III
ITEM
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
and Executive Officers
Our
current directors and executive officers are as follows:
Name
|
|
Age
|
|
Position
|
Ahmed
M. Fattouh
|
|
46
|
|
Chairman
and Chief Executive Officer
|
Alan
Pinto
|
|
48
|
|
Senior
Vice President
|
Brandon
C. Bentley
|
|
45
|
|
General
Counsel and Director
|
Brian
Q. Pham
|
|
32
|
|
Senior
Vice President
|
Minesh
K. Patel
|
|
35
|
|
Vice
President
|
Jeffrey
A. Harris
|
|
64
|
|
Director
|
Pietro
Cinquegrana
|
|
52
|
|
Director
|
Ahmed
M. Fattouh has served as our Chief Executive Officer and a member of our board of directors since our inception and
as our Chairman since December 2019. Mr. Fattouh has over 20 years of private equity and M&A. Since 2017, he has been
a Founder Member and the Chief Executive Officer of InterPrivate LLC, a private investment firm that invests on behalf of a consortium
of family offices in partnership with independent sponsors from leading private equity firms with strong relationships with former
portfolio companies. In 2001, Mr. Fattouh became a Founding Member and the Chief Executive Officer of Landmark Value Investments,
an asset management firm. He also served as the Managing Member of Landmark Value Strategies, Landmark Activist Strategies, Landmark
Credit Strategies, the Landmark Real Assets Fund, the Landmark Protection Fund, Globalist Value Strategies and the Globalist MENA
Fund. Mr. Fattouh is a former member of the private equity group at Investcorp International and the M&A Department of
Morgan Stanley & Co. in New York. He has executed transactions involving industry leaders, including RJR Nabisco, Mobil Corporation,
Ampolex, IBM, Elf Atochem, Tivoli Systems, Eagle Industries, Amerace, Washington Energy, Puget Power, Synergy Gas, KKR, Saks Fifth
Avenue, Werner Ladder, Falcon Building Products, LVMH, Bliss, Eastern Software, and Fidelity National. Mr. Fattouh previously
served as a director of Columbia Medical Products, the Del Grande Dealer Group, Massmedium, and Collective Sense. Mr. Fattouh
received a B.S. in Foreign Service from Georgetown University. We believe Mr. Fattouh is well-qualified to serve as
a director of the company given his significant experience and in-depth knowledge of private equity investing, capital markets
and investment banking.
Alan Pinto has
served as our Senior Vice President since our inception. He is a 25-year veteran of the finance industry. After establishing
himself in institutional Sales and Trading, Mr. Pinto became a founding Managing Director of Dahlman Rose & Co in 2003,
a boutique investment bank focused on the shipping industry and all related energy and commodity markets. Having established a
long roster of sophisticated institutional clients who had a growing appetite for structured, private deals, Mr. Pinto left
Dahlman Rose in 2013 to independently advise corporate clients on capital raising and M&A. In 2014, Mr. Pinto coordinated
a $500 million hybrid mezzanine and equity investment from several hedge funds to back a European tanker operator to acquire
a $1.0 billion fleet of crude carriers from AP Moeller-Maersk. Since that transaction, Mr. Pinto has advised on deals
across a wide spectrum of industries, including auto retail, real estate, transportation infrastructure, oil and gas and technology.
Mr. Pinto received a B.A. from Georgetown University.
Brandon C. Bentley has
served as our General Counsel and a member of our board of directors since our inception. He is also a founder and has been Chief
Operating Officer and General Counsel of InterPrivate since 2017. From 2005 to 2014, Mr. Bentley was the General Counsel,
Chief Operating Officer and Chief Compliance Officer of Landmark Value Investments. Mr. Bentley also served as General Counsel
of the firm’s registered broker-dealer affiliate from 2011 to 2013. Prior to InterPrivate, Mr. Bentley served as
the General Counsel and Chief Operating Officer of Castellan Real Estate Partners, a real estate private equity firm based in New
York, from 2014 to 2016 and worked for e.ventures Europe in a senior finance and operations capacity. Mr. Bentley previously
worked as an attorney at White & Case LLP in New York from 1999 to 2005, where he focused on securities transactions and mergers
and acquisitions. Mr. Bentley received a B.A. from Wake Forest University and a J.D. from Boston University School of Law.
We believe Mr. Bentley is well-qualified to serve as a director of the company given his in-depth knowledge of corporate,
securities and regulatory law.
Brian Q. Pham has
served as a Senior Vice President since our inception. Mr. Pham has been an investor, advisor and builder of technology led
companies throughout his career. Mr. Pham has been an independent investor and advisor to technology companies since 2017.
From 2013 to 2016, Mr. Pham was a Principal at Sherpa Capital, a San Francisco based venture capital firm. Mr. Pham was
on the founding team and was the first investor to join the founders and helped build the organization from the ground to approximately
$700.0 million in assets under management. Select investments led or co-led by Mr. Pham include: Pillpack, Slack,
Curology and Opendoor. With the Sherpa Capital founders, Mr. Pham aided in the formation of Silicon Foundry, a strategic consultancy
and incubation platform which incubated Brandless. From 2011 to 2013, Mr. Pham was a member of the Morgan Stanley technology
investment banking team based in Menlo Park. There he focused on the equity markets for high growth technology companies and helped
clients raise $22.0 billion through initial public offerings, follow-on equity offerings, and convertible debt offerings.
Representative transactions that his team led include IPOs for Facebook, Workday, and ServiceNow. Prior to Morgan Stanley, Mr. Pham
helped build efforts to from companies based off of IP from the Kamei Laboratory at the UCLA Department of Bioengineering. Mr. Pham
received a B.S. in Bioengineering from the University of California Los Angeles.
Minesh K. Patel has
served as a Vice President since our inception. Mr. Patel has been a Principal at InterPrivate since 2019 where he focuses
on market research, investment analysis, and deal execution. Mr. Patel previously was a Principal at Fiduciary Network LLC,
a private equity firm that provided permanent capital solutions to wealth management firms, from 2011 to 2018. Fiduciary Network’s
portfolio companies managed in excess of $35 billion in assets under management and included some of the most respected firms
in the industry. Mr. Patel’s responsibilities included leading or advising on all aspects of the firm’s M&A
transactions, including deal sourcing, valuation and structuring. Prior to Fiduciary Network, Mr. Patel worked at JPMorgan
Chase in a prime brokerage unit that was acquired from Bear Stearns from 2009 to 2010. Mr. Patel received a B.S. and M.S.
from the University of Texas at Dallas and has been a CFA charterholder since 2012.
Jeffrey A. Harris has
served as a member of our board of directors since January 2020. Mr. Harris is the founder and managing member of Global Reserve
Group LLC, a financial advisory and investment firm founded in 2011 focused primarily on the energy industry. From 1983 to 2011,
he worked at Warburg Pincus LLC and was a Managing Director and member of the Executive Management Group. During his tenure he
invested in numerous companies across sectors including energy, technology, telecommunications, industrial, and consumer/retail,
and has served as a director of over forty public and private companies. Currently, he is a director of Knoll, Inc. and several
private companies. In addition, Mr. Harris is a member of the Board of Trustees of each of the Cranbrook Educational Community,
New York-Presbyterian Hospital and Friends of the High Line. He was an adjunct professor at Columbia Business School for thirteen
years, and is a past chairman of the National Venture Capital Association. Mr. Harris received a B.S. in Economics from the
Wharton School at the University of Pennsylvania and an M.B.A. from Harvard Business School. We believe Mr. Harris is well-qualified to
serve as a director of the company based on his investment experience and contacts and relationships.
Pietro Cinquegrana has
served as a member of our board of directors since January 2020. Since March 2018, Mr. Cinquegrana has served as Managing
Director at CDIB Capital International, the private investment arm for CDF Holdings, a Taiwan-listed investment holding company.
From February 2017 to March 2018, Mr. Cinquegrana was a private investor. From February 2016 to February 2017, Mr. Cinquegrana
served as a Managing Director at Hudson Hill Capital, a family-backed long-term oriented private investment firm. From
2014 to January 2016, he served as a Managing Director for Aleph Capital Partners, a hybrid private equity/special situations partnership.
From 2013 to 2014, he was a senior member of the investment team at Vitol S.A. focused on making energy-related investments
internationally. Prior to this, he served as a Managing Director for Fosun International, a Chinese diversified investment holding
company (2011 to 2012) and Apollo Global Management/Holdfast Capital, a private equity platform acquired by Apollo to make investments
in workouts, restructurings and recapitalizations in developed markets in Asia-Pacific (2009 to 2011). Mr. Cinquegrana
began his career at Goldman Sachs and the Boston Consulting Group and subsequently worked for 11 years at Morgan Stanley (1994-2005),
including as a member of the investment team of the Morgan Stanley Bridge Fund and a senior investment professional at Princes
Gate Investors. Mr. Cinquegrana also worked at Ospraie Special Opportunities (2007–2009). Mr. Cinquegrana received
a B.Sc. from the London School of Economics and Political Science, a M.Sc. in Economics from Oxford University and an M.B.A. from
The Wharton School at the University of Pennsylvania. We believe Mr. Cinquegrana is well-qualified to serve as a director
of the company due to his investing experience, contacts and relationships.
Our board of directors
is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term.
The term of office of the first class of directors, consisting of Jeffrey A. Harris, will expire at our first annual meeting of
stockholders. The term of office of the second class of directors, consisting of Pietro Cinquegrana, will expire at the second
annual meeting. The term of office of the third class of directors, consisting of Ahmed M. Fattouh and Brandon C. Bentley, will
expire at the third annual meeting.
Director Independence
Currently Jeffrey
A. Harris and Pietro Cinquegrana would each be considered an “independent director” under the NYSE listing rules, which
is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having
a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s exercise
of independent judgment in carrying out the responsibilities of a director. Pursuant to the NYSE’s phase-in rules for
companies listing in conjunction with an initial public offering, we have one year from the date on which we are first listed on
the NYSE to have a majority of our board of directors considered independent. We intend to identify one additional independent
director to serve on the board within the applicable time period.
Our independent
directors will have regularly scheduled meetings at which only independent directors are present.
Any affiliated
transactions will be on terms no less favorable to us than could be obtained from independent parties. Our board of directors will
review and approve all affiliated transactions with any interested director abstaining from such review and approval.
Committees of the Board of Directors
We have three standing
committees: an audit committee, a nominating committee, and a compensation committee. Each such committee is composed of solely
independent directors.
Audit Committee
Effective
February 6, 2020, we established an audit committee of the board of directors, which consists of Jeffrey A. Harris and Pietro Cinquegrana,
each of whom is an independent director under the NYSE’s listing standards. Pursuant to the NYSE’s phase-in rules
for companies listing in conjunction with an initial public offering, we have one year from the date on which we are first listed
on the NYSE to have our audit committee be comprised of three members. We intend to identify one additional independent director
to serve on the audit committee within the applicable time period. The audit committee’s duties, which are specified in our
Audit Committee Charter, include, but are not limited to:
|
●
|
reviewing and discussing with management and the independent
auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should
be included in our Form 10-K;
|
|
●
|
discussing with management and the independent auditor
significant financial reporting issues and judgments made in connection with the preparation of our financial statements;
|
|
●
|
discussing with management major risk assessment and risk
management policies;
|
|
●
|
monitoring the independence of the independent auditor;
|
|
●
|
verifying the rotation of the lead (or coordinating) audit
partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
|
|
●
|
reviewing and approving all related-party transactions;
|
|
●
|
inquiring and discussing with management our compliance
with applicable laws and regulations;
|
|
●
|
pre-approving all audit services and permitted non-audit
services to be performed by our independent auditor, including the fees and terms of the services to be performed;
|
|
●
|
appointing or replacing the independent auditor;
|
|
●
|
determining the compensation and oversight of the work
of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report or related work;
|
|
●
|
establishing procedures for the receipt, retention and
treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues
regarding our financial statements or accounting policies; and
|
|
●
|
approving reimbursement of expenses incurred by our management
team in identifying potential target businesses.
|
During the fiscal
year ended December 31, 2019, our audit committee held no meetings.
Financial Experts on Audit Committee
The
audit committee will at all times be composed exclusively of “independent directors” who are “financially literate”
as defined under the NYSE’s listing standards. NYSE’s standards define “financially literate” as being
able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash
flow statement.
In
addition, the board of directors has determined that Pietro Cinquegrana qualifies as an “audit committee financial expert,”
as defined under rules and regulations of the SEC, which generally is any person who has past employment experience in finance
or accounting, requisite professional certification in accounting, or other comparable experience or background that results in
the individual’s financial sophistication.
Nominating
Committee
Effective
February 6, 2020, we established a nominating committee of the board of directors, which consists of Jeffrey A. Harris and Pietro
Cinquegrana, each of whom is an independent director under the NYSE’s listing standards. The nominating committee is responsible
for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers
persons identified by its members, management, stockholders, investment bankers and others.
During
the fiscal year ended December 31, 2019, our nominating committee did not hold any meetings.
Guidelines for Selecting Director
Nominees
The
guidelines for selecting nominees, which are specified in the Nominating Committee Charter, generally provide that persons to be
nominated:
|
●
|
should have demonstrated notable or significant achievements
in business, education or public service;
|
|
●
|
should possess the requisite intelligence, education and
experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives
and backgrounds to its deliberations; and
|
|
●
|
should have the highest ethical standards, a strong sense
of professionalism and intense dedication to serving the interests of the shareholders.
|
The Nominating
Committee will consider a number of qualifications relating to management and leadership experience, background and integrity and
professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may
require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from
time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board
members. The nominating committee does not distinguish among nominees recommended by stockholders and other persons.
There
have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.
Compensation Committee
Effective
February 6, 2020, we established a compensation committee of the board of directors, which consists of Jeffrey A. Harris and Pietro
Cinquegrana, each of whom is an independent director under the NYSE’s listing standards. The compensation committee’s
duties, which are specified in our Compensation Committee Charter, include, but are not limited to:
|
●
|
reviewing and approving on an annual basis the corporate
goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s
performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive
Officer based on such evaluation;
|
|
●
|
reviewing and approving the compensation of all of
our other executive officers;
|
|
●
|
reviewing our executive compensation policies and
plans;
|
|
●
|
implementing and administering our incentive compensation
equity-based remuneration plans;
|
|
●
|
assisting management in complying with our proxy statement
and annual report disclosure requirements;
|
|
●
|
approving all special perquisites, special cash payments
and other special compensation and benefit arrangements for our executive officers and employees;
|
|
●
|
if required, producing a report on executive compensation
to be included in our annual proxy statement; and
|
|
●
|
reviewing, evaluating, and recommending changes, if
appropriate, to the remuneration for directors.
|
Notwithstanding the foregoing, as indicated
below, other than the $10,000 per month administrative fee and the $10,000 per month payment to Minesh Patel for assisting us in
negotiating and consummating our initial business combination, no compensation of any kind, including finders, consulting or other
similar fees, will be paid to any of our existing stockholders, including our directors, or any of their respective affiliates,
prior to, or for any services they render in order to effectuate, the consummation of a business combination. Accordingly, it is
likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for
the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.
During the fiscal year
ended December 31, 2019, our compensation committee did not hold any meetings.
Code of Ethics
Effective
February 6, 2019, we adopted a code of ethics that applies to all of our executive officers, directors, and employees. The code
of ethics codifies the business and ethical principles that govern all aspects of our business. We will provide, without charge,
upon request, copies of our code of ethics. Requests for copies of our code of ethics should be sent in writing to 1350 Avenue
of the Americas, New York, NY 10019.
ITEM
11. EXECUTIVE COMPENSATION
Other than as described
below, no executive officer has received any cash compensation for services rendered to us. Commencing on February 3, 2020 through
the acquisition of a target business or our liquidation of the trust account, we will pay InterPrivate LLC, an affiliate of Mr. Fattouh,
$10,000 per month for providing us with office space and certain office and secretarial services. However, this arrangement is
solely for our benefit and is not intended to provide our officers or directors compensation in lieu of a salary.
We are also obligated,
commencing on February 3, 2020 through the acquisition of a target business or the liquidation of the trust account, to pay Minesh
K. Patel, our Vice President, a services fee of $10,000 per month for assisting us in negotiating and consummating an initial business
combination.
Other than the $10,000
per month administrative fee, the $10,000 per month services fee, the payment of consulting, success or finder fees to our sponsor,
officers, directors, initial stockholders or their affiliates in connection with the consummation of our initial business combination
and the repayment of the $124,148 loan made by our officers and directors to us, no compensation or fees
of any kind will be paid to our sponsor, initial stockholders, members of our management team or their respective affiliates, for
services rendered prior to or in connection with the consummation of our initial business combination (regardless of the type of
transaction that it is). However, they will receive reimbursement for any out-of-pocket expenses incurred by them in connection
with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target
businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target
businesses to examine their operations. There is no limit on the amount of out-of-pocket expenses reimbursable by us.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The
following table sets forth information regarding the beneficial ownership of our common stock by:
|
●
|
each person known by us to be the beneficial owner
of more than 5% of our outstanding shares of common stock;
|
|
●
|
each of our officers and directors; and
|
|
●
|
all of our officers and directors as a group.
|
Unless otherwise
indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common
stock beneficially owned by them. The following table does not reflect record of beneficial ownership of the warrants included
in the units offered in the IPO or the Private Units as the warrants are not exercisable within 60 days of the date hereof.
|
|
Amount and
|
|
|
Approximate
|
|
|
|
Nature of
|
|
|
Percentage of
|
|
|
|
Beneficial
|
|
|
Outstanding
|
|
Name and Address of Beneficial Owner(1)
|
|
Ownership
|
|
|
Shares
|
|
Ahmed M. Fattouh(2)
|
|
|
6,538,581
|
|
|
|
21.2
|
%
|
Alan Pinto
|
|
|
0
|
(3)
|
|
|
0.0
|
%
|
Brandon C. Bentley
|
|
|
0
|
(3)
|
|
|
0.0
|
%
|
Brian Q. Pham
|
|
|
0
|
(3)
|
|
|
0.0
|
%
|
Minesh K. Patel
|
|
|
0
|
(3)
|
|
|
0.0
|
%
|
Jeffrey A. Harris
|
|
|
0
|
(3)
|
|
|
0.0
|
%
|
Pietro Cinquegrana
|
|
|
0
|
(3)
|
|
|
0.0
|
%
|
InterPrivate Acquisition Management LLC(2)
|
|
|
6,538,581
|
|
|
|
21.2
|
%
|
All directors and executive officers as a group (seven individuals)
|
|
|
6,538,581
|
|
|
|
21.2
|
%
|
*
|
Less than 1%.
|
(1)
|
Unless otherwise indicated, the business address of each of the individuals is 1350 Avenue of the Americas, New York, NY 10019.
|
(2)
|
Represents securities held by InterPrivate Acquisition Management LLC, our sponsor, of which InterPrivate Capital LLC is sole manager. InterPrivate Capital LLC is a wholly owned subsidiary of InterPrivate LLC, an entity controlled by Ahmed M. Fattouh. Accordingly, all securities held by our sponsor may ultimately be deemed to be beneficially held by Mr. Fattouh.
|
(3)
|
Does not include any securities held by InterPrivate Acquisition Management LLC, of which each person is a member. Each such person disclaims beneficial ownership of the reported shares other than to the extent of his ultimate pecuniary interest therein.
|
All
of the founders’ shares outstanding prior to the IPO have been placed in escrow with Continental Stock Transfer & Trust
Company, as escrow agent, until (i) with respect to 50% of such shares, the earlier of one year after the date of the consummation
of our initial business combination and the date on which the closing price of our common stock equals or exceeds $12.50 per share
(as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day
period commencing after our initial business combination and (ii) with respect to the remaining 50% of such shares, one year
after the date of the consummation of our initial business combination, or earlier if, subsequent to our initial business combination,
we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having
the right to exchange their shares of common stock for cash, securities or other property.
During
the escrow period, the holders of these shares will not be able to sell or transfer their securities except for transfers, assignments
or sales (i) among our initial stockholders or to our initial stockholders’ members, officers, directors, consultants or
their affiliates, (ii) to a holder’s stockholders or members upon its liquidation, (iii) by bona fide gift to a member of
the holder’s immediate family or to a trust, the beneficiary of which is the holder or a member of the holder’s immediate
family, for estate planning purposes, (iv) by virtue of the laws of descent and distribution upon death, (v) pursuant to a qualified
domestic relations order, (vi) to us for no value for cancellation in connection with the consummation of our initial business
combination, or (vii) in connection with the consummation of a business combination at prices no greater than the price at which
the shares were originally purchased, in each case (except for clause (vi) or with our prior consent) where the transferee agrees
to the terms of the escrow agreement and to be bound by these transfer restrictions, but will retain all other rights as our stockholders,
including, without limitation, the right to vote their shares of common stock and the right to receive cash dividends, if declared.
If dividends are declared and payable in shares of common stock, such dividends will also be placed in escrow. If we are unable
to effect a business combination and liquidate, there will be no liquidation distribution with respect to the founders’ shares.
Our executive officers
and our Sponsor are our “promoters,” as that term is defined under the federal securities laws.
Equity Compensation
Plans
As
of December 31, 2019, we had no compensation plans (including individual compensation arrangements) under which equity securities
of the registrant were authorized for issuance.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
For a complete discussion
regarding certain relationships and related transactions, see the section titled “Certain Transactions” contained in
our prospectus dated February 3, 2020, incorporated by reference herein.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following is a
summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered.
Audit Fees.
Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services
that are normally provided by Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for professional
services rendered for the audit of our annual financial statements, review of the financial information included in our Forms
10-Q for the respective periods and other required filings with the SEC for the period from August 16, 2019 (inception) through
December 31, 2019 totaled $42,555. The above amounts include interim procedures and audit fees, as well as attendance at audit
committee meetings.
Audit-Related Fees.
Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance
of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include
attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting
standards. We did not pay Marcum for consultations concerning financial accounting and reporting standards for the period from
August 16, 2019 (inception) through December 31, 2019.
Tax Fees. We
did not pay Marcum for tax planning and tax advice for the period from August 16, 2019 (inception) through December 31, 2019.
All Other Fees.
We did not pay Marcum for other services for the period from August 16, 2019 (inception) through December 31, 2019.
Pre-Approval Policy
Our audit committee
was formed upon the consummation of our IPO. As a result, the audit committee did not pre-approve all of the foregoing services,
although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the
formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services
and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de
minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the
completion of the audit).
ITEM 15. EXHIBITS, FINANCIAL
STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as part of this Form
10-K:
|
|
(1)
|
Financial Statements:
|
|
(2)
|
Financial Statement Schedules:
|
None.
|
(3)
|
The following Exhibits
are filed as part of this report:
|
|
*
|
Incorporated by reference
to the Registrant’s Current Report on Form 8-K filed on February 6, 2020
|
|
**
|
Incorporated
by reference to the Registrant’s Registration Statement on Form S-1 (SEC File Nos.
333-235849 and 333-236233).
|
Item 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of the Section
13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on the 30th day of March, 2020.
|
INTERPRIVATE ACQUISITION CORP.
|
|
|
|
By:
|
/s/ Ahmed M. Fattouh
|
|
|
Ahmed M. Fattouh
|
|
|
Chairman and Chief Executive Officer
|
In accordance with the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Ahmed M. Fattouh
|
|
President and Chief Financial Officer and Director
|
|
March 30, 2020
|
Ahmed M. Fattouh
|
|
(Principal Executive Officer and Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/
Brandon C. Bentley
|
|
General Counsel and Director
|
|
March 30, 2020
|
Brandon C. Bentley
|
|
|
|
|
|
|
|
|
|
/s/
Jeffrey A. Harris
|
|
|
|
|
Jeffrey A. Harris
|
|
Director
|
|
March 30, 2020
|
|
|
|
|
|
/s/ Pietro Cinquegrana
|
|
|
|
|
Pietro Cinquegrana
|
|
Director
|
|
March 30, 2020
|
INTERPRIVATE ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
InterPrivate Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance
sheet of InterPrivate Acquisition Corp. (the “Company”) as of December 31, 2019, the related statements of operations,
changes in stockholders’ equity and cash flows for the period from August 16, 2019 (inception) through December 31, 2019,
and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its
operations and its cash flows for the period from August 16, 2019 (inception) through December 31, 2019, in conformity with accounting
principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements 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 statements are 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 statements, 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 statements. 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 statements. We believe that our audit provides a reasonable
basis for our opinion.
/ s/ Marcum LLP
|
|
|
|
Marcum LLP
|
|
|
|
We have served as the Company’s auditor since 2019.
|
|
|
New York, NY
|
|
March 30, 2020
|
|
INTERPRIVATE ACQUISITION CORP.
BALANCE SHEET
DECEMBER 31, 2019
ASSETS
|
|
|
|
Current asset – Other receivable
|
|
$
|
25
|
|
Deferred offering costs
|
|
|
106,870
|
|
TOTAL ASSETS
|
|
$
|
106,895
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accrued expenses
|
|
$
|
1,000
|
|
Promissory note – related party
|
|
|
80,808
|
|
Total Current Liabilities
|
|
|
81,808
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding
|
|
|
—
|
|
Common stock, $0.0001 par value; 50,000,000 shares authorized; 6,337,500 shares issued and outstanding (1)
|
|
|
634
|
|
Additional paid-in capital
|
|
|
25,453
|
|
Accumulated deficit
|
|
|
(1,000
|
)
|
Total Stockholders’ Equity
|
|
|
25,087
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
106,895
|
|
|
(1)
|
Included up to 787,500 shares
subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. As a result of the
underwriters’ election to fully exercise their over-allotment option on February 10, 2020, the shares were no longer subject
to forfeiture (see Note 5 and 7).
|
The accompanying notes are an integral part
of the financial statements.
INTERPRIVATE ACQUISITION CORP.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 16, 2019 (INCEPTION)
THROUGH DECEMBER 31, 2019
Formation and operating costs
|
|
$
|
1,000
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,000
|
)
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted (1)
|
|
|
6,337,784
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
0.00
|
|
|
(1)
|
Excludes
up to 787,500 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters.
As a result of the underwriters’ election to fully exercise their over-allotment option on February 10, 2020, the shares
were no longer subject to forfeiture (see Note 5 and 7).
|
The accompanying notes are an integral part
of the financial statements.
INTERPRIVATE ACQUISITION CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS’
EQUITY
FOR THE PERIOD FROM AUGUST 16, 2019 (INCEPTION)
THROUGH DECEMBER 31, 2019
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
|
|
Common Stock
|
|
|
Paid-in
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance – August 16, 2019 (inception)
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to Sponsor (1)
|
|
|
6,900,000
|
|
|
|
690
|
|
|
|
24,310
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Representative Shares
|
|
|
300,000
|
|
|
|
30
|
|
|
|
1,057
|
|
|
|
—
|
|
|
|
1,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeiture of common stock issued to Sponsor
|
|
|
(862,500
|
)
|
|
|
(86
|
)
|
|
|
86
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,000
|
)
|
|
|
(1,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – December 31, 2019
|
|
|
6,337,500
|
|
|
$
|
634
|
|
|
$
|
25,453
|
|
|
$
|
(1,000
|
)
|
|
$
|
25,087
|
|
|
(1)
|
Included up to 787,500 shares subject to forfeiture if the over-allotment option was not exercised in
full or in part by the underwriters. As a result of the underwriters’ election to fully exercise their over-allotment option
on February 10, 2020, the shares were no longer subject to forfeiture (see Note 5 and 7).
|
The accompanying notes are an
integral part of the financial statements.
INTERPRIVATE ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 16, 2019 (INCEPTION)
THROUGH DECEMBER 31, 2019
Cash Flows from Operating Activities:
|
|
|
|
Net loss
|
|
$
|
(1,000
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accrued expenses
|
|
|
1,000
|
|
Net cash used in operating activities
|
|
|
—
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Proceeds from promissory note – related party
|
|
|
80,808
|
|
Payment of offering costs
|
|
|
(80,808
|
)
|
Net cash provided by financing activities
|
|
|
—
|
|
|
|
|
|
|
Net Change in Cash
|
|
|
—
|
|
Cash – Beginning
|
|
|
—
|
|
Cash – Ending
|
|
$
|
—
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
Issuance of Representative Shares
|
|
$
|
1,087
|
|
Deferred offering costs paid directly by Sponsor from proceeds from issuance of common stock to Sponsor
|
|
$
|
25,000
|
|
The accompanying notes are an integral part
of the financial statements.
Note 1 — Description of Organization and Business Operations
InterPrivate Acquisition
Corp. (the “Company”) was incorporated in Delaware on August 16, 2019. The Company is a blank check company formed
for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization
or other similar business combination with one or more businesses or entities (the “Business Combination”).
The Company is an early
stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging
growth companies.
As of December 31,
2019, the Company had not commenced any operations. All activity for the period from August 16, 2019 (inception) through December
31, 2019 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which
is described below. The Company will not generate any operating revenues until after the completion of a Business Combination,
at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the
Initial Public Offering.
The registration statements
for the Company’s Initial Public Offering were declared effective on February 3, 2020. On February 6, 2020, the Company consummated
the Initial Public Offering of 21,000,000 units (the “Units” and, with respect to the shares of common stock included
in the Units sold, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $210,000,000, which is described
in Note 3.
Simultaneously with
the closing of the Initial Public Offering, the Company consummated the sale of 555,000 units (the “Private Units”)
at a price of $10.00 per Private Unit in a private placement to InterPrivate Acquisition Management LLC (the “Sponsor”)
and EarlyBirdCapital, Inc. (“EarlyBirdCapital”), generating gross proceeds of $5,550,000, which is described in Note
4.
Following the closing
of the Initial Public Offering on February 6, 2020, an amount of $210,000,000 ($10.00 per Unit) from the net proceeds of the sale
of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”)
located in the United States, which will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16)
of the Investment Company Act, with a maturity of 180 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 Rule 2a-7 of the Investment Company Act, as determined
by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account,
as described below.
On February 7, 2020,
the underwriters notified the Company of their intention to fully exercise their over-allotment option on February 10, 2020. As
such, on February 10, 2020, the Company consummated the sale of an additional 3,150,000 Units, at $10.00 per Unit, and the sale
of an additional 63,000 Private Units, at $10.00 per Private Unit, generating total gross proceeds of $32,130,000. A total of $31,500,000
of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $241,500,000.
Transaction costs amounted
to $5,310,386 consisting of $4,830,000 of underwriting fees and $480,386 of other offering costs. In addition, $867,876 of cash
was held outside of the Trust Account and is available for working capital purposes.
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 the Private Units, 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 a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust
Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business
Combination. 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”).
The Company will provide
its holders of the outstanding Public Shares (the “public stockholders”) 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 stockholder meeting called
to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public
stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially
$10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to
the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with
respect to the Company’s warrants. The Company will proceed with a Business Combination if the Company has net tangible assets
of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder
approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required
by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant
to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”),
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 containing substantially the same information as would be included in a proxy statement
prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company
decides to obtain stockholder 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. If the Company seeks stockholder approval
in connection with a Business Combination, the Company’s Sponsor and EarlyBirdCapital have agreed to vote their Founder Shares
(as defined in Note 5), Representative Shares (as defined in Note 7), Private Shares (as defined in Note 4) and any Public Shares
purchased after the Initial Public Offering (a) in favor of approving a Business Combination and (b) not to convert any shares
in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in
connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective
of whether they vote for or against the proposed transaction or don’t vote at all.
The Sponsor and EarlyBirdCapital
have agreed (a) to waive their redemption rights with respect to their Founder Shares, Representative Shares, Private Shares and
Public Shares held by them in connection with the completion of a Business Combination or amendment to the Amended and Restated
Certificate of Incorporation, (b) to waive their rights to liquidating distributions from the Trust Account with respect to the
Founder Shares, Representative Shares and Private Shares if the Company fails to consummate a Business Combination and (c) not
to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’
ability to convert or sell their shares to the Company in connection with a Business Combination or affect 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 unless
the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company will have
until November 6, 2021 to complete a Business Combination (the “Combination Period”). 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 earned on the funds
held in the Trust Account and not previously released to the Company to pay taxes, divided by the number of then outstanding Public
Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve
and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law.
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
third party 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 to below $10.00 per Public Share,
except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title,
interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the
Company’s indemnity of the underwriters of 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 Insiders 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 Insiders 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.
Note 2 — Summary of Significant
Accounting Policies
Basis of presentation
The accompanying financial
statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”)
and pursuant to the rules and regulations of the SEC.
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 stockholder 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 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 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 statement with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended
transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
The preparation of
the 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 the financial
statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires
management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could
differ significantly from those estimates.
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
did not have any cash equivalents as of December 31, 2019.
Income Taxes
The Company follows
the asset and liability method of accounting for income taxes under 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.
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. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as
of December 31, 2019. 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 provision for income
taxes was deemed to be immaterial as of December 31, 2019.
Net loss per common share
Net loss per share
is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding
shares of common stock subject to forfeiture by the Sponsor. Weighted average shares were reduced for the effect of an aggregate
of 787,500 shares of common stock that were subject to forfeiture if the over-allotment option was not exercised by the underwriters
(see Note 7). At December 31, 2019, the Company did not have any dilutive securities and other contracts that could, potentially,
be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss
per share is the same as basic loss per share for the period presented.
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.
Fair value of financial instruments
The fair value of
the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements
and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their
short-term nature.
Recent accounting pronouncements
Management does not
believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect
on the Company’s financial statements.
Note 3 — Public Offering
Pursuant to the Initial
Public Offering, the Company sold 24,150,000 Units, which includes a full exercise by the underwriters of their over-allotment
option in the amount of 3,150,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one-half
of one warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one share of common
stock at a price of $11.50 per share, subject to adjustment (see Note 7).
Note 4 — Private Placement
Simultaneously with
the closing of the Initial Public Offering, the Sponsor and EarlyBirdCapital purchased an aggregate of 555,000 Private Units at
a price of $10.00 per Private Unit, for an aggregate purchase price of $5,550,000. As a result of the underwriters’ election
to fully exercise their over-allotment option on February 10, 2020, the Sponsor and EarlyBirdCapital purchased an additional 63,000
Private Units at a purchase price of $10.00 per Private Unit, for an aggregate purchase price of $630,000. The proceeds from the
sale of the Private Units were added to the net proceeds from the Initial Public Offering held in the Trust Account. Each Private
Unit consists of one share of common stock (“Private Share”) and one-half of one warrant (“Private Warrant”).
Each whole Private Warrant is exercisable to purchase one share of common stock at an exercise price of $11.50 per share, subject
to adjustment (see Note 7). The proceeds from the Private Units 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 proceeds from
the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable
law).
Note 5 — Related Party Transactions
Founder Shares
In August 2019, the
Sponsor purchased 5,750,000 shares (the “Founder Shares”) of the Company’s common stock for an aggregate price
of $25,000. On December 30, 2019, the Sponsor contributed an aggregate of 718,750 Founder Shares back to the Company’s capital
for no additional consideration and in February 2020, the Company effected a dividend of 0.2 shares of common stock for each share
of common stock outstanding, resulting in there being an aggregate of 6,037,500 Founder Shares outstanding. The Founder Shares
included an aggregate of up to 787,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment
was not exercised in full or in part, so that the Sponsor would collectively own 20% of the Company’s issued and outstanding
shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering
and excluding the Private Shares underlying the Private Units and Representative Shares).
The Sponsor has agreed,
subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until, with respect to 50% of
the Founder Shares, the earlier of one year after the consummation of a Business Combination and the date on which the closing
price of the common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30-trading day period commencing after a Business Combination and, with respect
to the remaining 50% of the Founder Shares, until the one year after the consummation of a Business Combination, or earlier, in
either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar
transaction 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.
Promissory Note — Related Party
In September 2019,
the Company issued an unsecured promissory note to InterPrivate Acquisition Management LLC (the “Promissory Note”),
pursuant to which the Company may borrow up to an aggregate principal amount of $150,000. The Promissory Note was non-interest
bearing and payable on the earlier of (i) September 1, 2020, (ii) the consummation of the Initial Public Offering or (iii) the
date on which the Company determined not to proceed with the Initial Public Offering. At December 31, 2019, $80,808 was outstanding
under the Promissory Note. The outstanding amount of $124,148 was repaid at the closing of the Initial Public Offering on February
6, 2020.
Related Party Loans
In addition, in order
to finance transaction costs in connection with a Business Combination, the Insiders, or certain of the Company’s officers
and directors or their affiliates 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 $1,500,000 of such Working Capital Loans may be convertible
into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private
Units.
Administrative Support Agreement
The Company entered
into an agreement whereby, commencing on the February 3, 2020, through the earlier of the Company’s consummation of a Business
Combination and the liquidation of the Trust Account, the Company will pay an affiliate of one of the Company’s executive
officers $10,000 per month for office space, utilities and secretarial and administrative support.
Services Agreement
The Company entered
into an agreement whereby, commencing on the February 3, 2020, through the earlier of the Company’s consummation of a Business
Combination and the liquidation of the Trust Account, the Company will pay its Vice President a $10,000 per month fee for assisting
the Company in negotiating and consummating an initial Business Combination.
Note 6 — Commitments
Registration Rights
Pursuant to a registration
rights agreement entered into on February 3, 2020, the holders of the Founder Shares and Representative Shares, as well as the
holders of the Private Units and any units that may be issued in payment of Working Capital Loans made to the Company (and all
underlying securities), are entitled to registration rights. The holders of a majority of these securities are entitled to make
up to two demands that the Company register such securities. The holders of the majority of the Founders Shares can elect to exercise
these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be
released from escrow. The holders of a majority of the Representative Shares, Private Units and units issued in payment of Working
Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates
a Business Combination. Notwithstanding anything to the contrary, EarlyBirdCapital may only make a demand on one occasion and only
during the five-year period beginning on the effective date of the Initial Public Offering. In addition, the holders have certain
“piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a
Business Combination; provided, however, that EarlyBirdCapital may participate in a “piggy-back” registration only
during the seven-year period beginning on the effective date of the Initial Public Offering. 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 to purchase up to 3,150,000 additional Units to cover over-allotments, if any, at the Initial Public
Offering price less the underwriting discounts and commissions. On February 10, 2020, the underwriters fully exercised their over-allotment
option to purchase an additional 3,150,000 Units at $10.00 per unit.
The underwriters were
paid a cash underwriting discount of $0.20 per Unit, or $4,830,000 in the aggregate.
Business Combination Marketing Agreement
The Company has engaged
EarlyBirdCapital as an advisor in connection with a Business Combination to assist the Company in holding meetings with its shareholders
to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors
that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company
in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and public filings
in connection with the Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation
of a Business Combination in an amount equal to 3.5% of the gross proceeds of Initial Public Offering, or $8,452,500 (exclusive
of any applicable finders’ fees which might become payable); provided that up to 33% of the fee may be allocated at the Company’s
sole discretion to other third parties who are investment banks or financial advisory firms not participating in the Initial Public
Offering that assist the Company in identifying and consummating a Business Combination.
Note 7 — Stockholders’ Equity
Preferred Stock
— The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such
designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At December
31, 2019, there were no shares of preferred stock issued or outstanding.
Common Stock
— The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share. At December
31, 2019, there were 6,337,500 shares of common stock issued and outstanding, of which an aggregate of up to 787,500 shares were
subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so
that the Sponsor would collectively own 20% of the Company’s issued and outstanding common stock after the Initial Public
Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares
and Representative Shares). On February 14, 2020, in connection with the underwriters’ exercise of the over-allotment option
in full, 787,500 founder shares are no longer subject to forfeiture.
Warrants —
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. No warrants will be exercisable for cash unless the Company has an effective
and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus
relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common
stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a
Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period
when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant
to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption,
or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants
will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once the warrants become
exercisable, the Company may redeem the Public Warrants:
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●
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in whole and not in part;
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|
●
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at a price of $0.01 per warrant;
|
|
●
|
upon not less than 30 days’ prior written notice of redemption;
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|
●
|
if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and
|
|
●
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if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.
|
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.
The Private Warrants
will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private
Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable
or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private
Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they
are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial
purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders
on the same basis as the Public Warrants.
The exercise price
and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in
the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However,
the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally,
in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a 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 the respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if (x)
the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with
the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (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, initial stockholders or their affiliates, without taking into account any Founder Shares
held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a
Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock
during the 20 trading day period starting on the trading day prior to the day on which the Company consummates 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 greater of (i) the Market Value or (ii) the price at which the Company issues the
additional shares of common stock or equity-linked securities.
Representative Shares
In September 2019,
the Company issued to the designees of EarlyBirdCapital 250,000 shares of common stock (the “Representative Shares”)
(after giving effect to a contribution back to the Company’s capital for no additional consideration of an aggregate of 50,000
shares EarlyBirdCapital received as a result of the dividend effectuated by the Company in February 2020). The Company accounted
for the Representative Shares as an offering cost of the Initial Public Offering, with a corresponding credit to stockholders’
equity. The Company estimated the fair value of Representative Shares to be $1,087 based upon the price of the Founder Shares issued
to the Sponsor. The holders of the Representative Shares have agreed not to transfer, assign or sell any such shares until the
completion of a Business Combination. In addition, the holders have agreed (i) to waive their redemption rights with respect to
such shares in connection with the completion of a Business Combination and (ii) to waive their rights to liquidating distributions
from the Trust Account with respect to such shares if the Company fails to complete a Business Combination within the Combination
Period.
The Representative
Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following
the effective date of the registration statement related to the Initial Public Offering pursuant to Rule 5110(g)(1) of FINRA’s
NASD Conduct Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days
immediately following the effective date of the registration statements related to the Initial Public Offering, nor may they be
sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the effective date of the registration
statements related to the Initial Public Offering except to any underwriter and selected dealer participating in the Initial Public
Offering and their bona fide officers or partners.
Note 8 — Income Tax
The Company’s net deferred tax asset
at December 31, 2019 is as follows:
Deferred tax asset
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Net operating loss carryforward
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$
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210
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Total deferred tax assets
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210
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Valuation allowance
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(210
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)
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Deferred tax liability, net of allowance
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|
$
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—
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|
The income tax provision for the period from August 16, 2019
(inception) through December 31, 2019 consists of the following:
Federal
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Current
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$
|
—
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|
Deferred
|
|
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(210
|
)
|
|
|
|
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State
|
|
|
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Current
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$
|
—
|
|
Deferred
|
|
|
—
|
|
Change in valuation allowance
|
|
|
210
|
|
Income tax provision
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|
$
|
—
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|
As of December 31,
2019, the Company had $1,000 U.S. federal and state net operating loss carryovers (“NOLs”) available to offset future
taxable income.
In assessing the realization
of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable
income during the periods in which temporary differences representing net future deductible amounts become deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making
this assessment. After consideration of all of the information available, management believes that significant uncertainty exists
with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.
A reconciliation of
the federal income tax rate to the Company’s effective tax rate at December 31, 2019 is as follows:
Statutory federal income tax rate
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21.0
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%
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State taxes, net of federal tax benefit
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|
|
0.0
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%
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Valuation allowance
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|
|
(21.0
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)%
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Income tax provision
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|
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0.0
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%
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The Company files income
tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s
tax returns since inception remain open and subject to examination.
Note 9 — Subsequent Events
The Company evaluated
subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were
issued. Other than as described in these financial statements, the Company did not identify any subsequent events that would have
required adjustment or disclosure in the financial statements.
F-18
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