The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Northern Genesis Acquisition
Corp. (the “Company”) was incorporated in Delaware on May 27, 2020. The Company is a blank check company formed for
the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses or entities (the “Business Combination”). Although the Company is not limited
to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to initially
concentrate on target businesses making a positive contribution to sustainability through the ownership, financing and management
of societal infrastructure.
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 September 30,
2020, the Company had not commenced any operations. All activity for the period from May 27, 2020 (inception) through September
30, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is
described below, and identifying a target company for a Business Combination. 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 statement
for the Company’s Initial Public Offering was declared effective on August 17, 2020. On August 20, 2020, the Company consummated
the Initial Public Offering of 30,000,000 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 $300,000,000, which is described
in Note 3.
Simultaneously with
the closing of the Initial Public Offering, the Company consummated the sale of 7,750,000 warrants (the “Private Placement
Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, Northern
Genesis Sponsor LLC (the “Sponsor”), generating gross proceeds of $7,750,000, which is described in Note 4.
Following the closing
of the Initial Public Offering on August 20, 2020, an amount of $300,000,000 ($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 Placement Warrants was placed in a trust account (the “Trust
Account”) located in the United States and held as cash or invested only in U.S. government securities, within the meaning
set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (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 and (ii) the distribution of the funds in the Trust Account,
as described below.
On August 27, 2020,
in connection with the underwriters’ election to partially exercise their over-allotment option, the Company sold an additional
1,945,344 Units at $10.00 per Unit and sold an additional 389,069 Private Placement Warrants at $1.00 per Private Placement Warrant,
generating total gross proceeds of $19,842,509. Following such closing, an additional $19,453,440 of net proceeds was deposited
in the Trust Account, resulting in $319,453,440 held in the Trust Account.
Transaction costs
amounted to $18,026,620 consisting of $6,389,069 of underwriting fees, $11,180,870 of deferred underwriting fees and $456,681 of
other offering costs. In addition, at September 30, 2020, cash of $1,540,270 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 Placement Warrants, although substantially all of the net proceeds are intended to be applied generally
toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination
successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets
held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account)
at the time of the agreement to enter into an initial Business Combination. The Company intends to 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.
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.
NORTHERN GENESIS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
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 Sponsor has
agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering
in favor of approving 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 do not vote at all.
Notwithstanding the
above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any
affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as
defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted
from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent
of the Company.
The Sponsor and the
Company’s officers and directors have agreed (a) to waive redemption rights with respect to the Founder Shares and Public
Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the
Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation
to allow redemption in connection with the Company’s initial Business Combination and certain amendments to the Amended and
Restated Certificate of Incorporation or to redeem 100% of its Public Shares if the Company does not complete a Business Combination
or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity,
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 August 20, 2022 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete
a Business Combination within the Combination Period and stockholders do not approve an amendment to the Amended and Restated Certificate
of Incorporation to extend this date, 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 (which interest shall be
net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), 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 the case of clauses (ii) and (iii) to the Company’s obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails
to complete a Business Combination within the Combination Period.
The holders of the
Founder Shares have agreed to waive their liquidation rights with respect to such shares if the Company fails to complete a Business
Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering,
such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business
Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission
(see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination
Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available
to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the
assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In order to protect
the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a
vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or
(ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account
due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay the Company’s
tax obligation and up to $100,000 for liquidation expenses, except as to any claims by a third party who executed a waiver of any
and all rights to seek access to the Trust Account (even if such waiver is deemed to be unenforceable) 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 Sponsor will not be responsible to the extent of any liability for such
third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due
to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with
which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in
or to monies held in the Trust Account.
NORTHERN GENESIS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article
8 of Regulation S-X promulgated under the Securities Act. Certain information or footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for
interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation
of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed
financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation
of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited
condensed financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering
as filed with the SEC on August 18, 2020, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on August
26, 2020. The interim financial statements for the three months ended September 30, 2020 and for the period from May 27, 2020 (inception)
through September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or
for any future periods.
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 of 2002 (“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 statements 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 condensed 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 periods.
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.
NORTHERN GENESIS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
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 September 30, 2020.
Marketable Securities Held in Trust
Account
At September 30, 2020,
substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills.
Common Stock Subject to Possible Redemption
The Company accounts
for its shares of common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption
is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common
stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common
stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are
considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common
stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity
section of the Company’s condensed balance sheet.
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. The effective tax rate differs from the statutory tax rate of 21% for the three months ended
September 30, 2020 and for the period from May 27, 2020 (inception) through September 30, 2020, due to the valuation allowance
recorded on the Company’s net operating losses.
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 September 30, 2020. The Company is currently not aware of any issues under review that could result in significant payments,
accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities
since inception.
Net Loss per Common Share
Net loss per common
share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company
applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at September
30, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic
net loss per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings.
The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase
24,111,741 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants into shares
of common stock is contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same
as basic net loss per common share for the periods presented.
NORTHERN GENESIS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Reconciliation of Net Loss per Common
Share
The Company’s
net loss is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares
only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted
loss per common share is calculated as follows:
|
|
Three Months
Ended
September 30,
|
|
|
For the
Period from
May 27,
2020
(Inception)
Through
September 30,
|
|
|
|
2020
|
|
|
2020
|
|
Net loss
|
|
$
|
(124,414
|
)
|
|
$
|
(125,414
|
)
|
Less: Income attributable to shares subject to possible redemption
|
|
|
(9,246
|
)
|
|
|
(9,246
|
)
|
Adjusted net loss
|
|
$
|
(133,660
|
)
|
|
$
|
(134,660
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted
|
|
|
8,336,951
|
|
|
|
8,111,107
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
Fair Value of Financial Instruments
The fair value of
the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,”
approximates the carrying amounts represented in the accompanying condensed balance sheet, primarily due to their short-term nature.
Risks and Uncertainties
In March 2020, the
World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout
the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around
the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have
a negative effect on identifying a target company for a Business Combination, the specific impact is not readily determinable as
of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
Recent Accounting Standards
Management does not
believe that any recently issued, but not yet effective, accounting standards update, if currently adopted, would have a material
effect on the Company’s condensed financial statements.
NOTE 3. PUBLIC OFFERING
Pursuant to the Initial
Public Offering, the Company sold 31,945,344 Units, at a price of $10.00 per Unit, inclusive of 1,945,344 Units sold to the
underwriters on August 27, 2020 upon the underwriters’ election to partially exercise their over-allotment option. Each Unit
consists of one share of common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public
Warrant entitles 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 purchased an aggregate of 7,750,000 Private Placement Warrants at a price
of $1.00 per Private Placement Warrant, for an aggregate purchase price of $7,750,000. On August 27, 2020, in connection with the
underwriters’ election to partially exercise their over-allotment option, the Company sold an additional 389,069 Private
Placement Warrants to the Sponsor, at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $389,069. Each
Private Placement Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to
adjustment (see Note 7). The proceeds from the sale of the Private Placement Warrants were added to the net 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 Placement Warrants held in the Trust Account will be used to fund the redemption of the
Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NORTHERN GENESIS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On May 27, 2020, the
Sponsor paid $25,000 to cover certain offering costs of the Company in consideration of 8,625,000 shares of the Company’s
common stock (the “Founder Shares”). The Founder Shares included an aggregate of up 1,125,000 shares 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
own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor does not purchase
any Public Shares in the Initial Public Offering). On August 27, 2020, as a result of the underwriters’ election to partially
exercise their over-allotment option and the forfeiture of the remaining over-allotment option, 486,336 Founder Shares are no longer
subject to forfeiture, resulting in an aggregate of 7,986,336 Founder Shares issued and outstanding.
The Sponsor has agreed,
subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one
year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale
price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after
a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization
or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares
of common stock for cash, securities or other property.
Administrative Services Agreement
The Company entered
into an agreement whereby, commencing on August 17, 2020, the Company will pay the Sponsor a total of $10,000 per month for office
space, utilities, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation,
the Company will cease paying these monthly fees. For the three months ended September 30, 2020 and for the period from May 27,
2020 (inception) through September 30, 2020, the Company incurred $15,000 in fees for these services. As of September 30, 2020,
$15,000 is included in accrued expenses in the accompanying condensed balance sheet.
Promissory Note — Related Party
On May 27, 2020, the
Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could
borrow up to an aggregate principal amount of $150,000, of which $82,486 was outstanding under the Promissory Note as of June 30,
2020. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2020, (ii) the consummation
of the Initial Public Offering or (iii) the abandonment of the Initial Public Offering. The outstanding amount of $142,931
under the Promissory Note was repaid on August 24, 2020.
Due to Sponsor
In September 2020, the Company received an aggregate of
$510,914 from the Sponsor which was returned in October 2020.
Related Party Loans
In order to finance
transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or 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”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion
of a Business Combination, without interest, or, at the lender’s discretion, up to $3,000,000 of the notes may be converted
upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the
Private Placement Warrants. 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.
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a registration
rights agreement entered into on August 17, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants
that may be issued upon conversion of the Working Capital Loans (and any shares of common stock issuable upon the exercise of the
Private Placement Warrants or warrants issued upon conversion of Working Capital Loans) are entitled to registration rights requiring
the Company to register such securities for resale. The holders of these securities will be entitled to make up to three demands,
excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights
to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration
rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering
the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
NORTHERN GENESIS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Underwriting Agreement
The Company granted
the underwriters a 45-day option from the date of Initial Public Offering to purchase up to 4,500,000 additional Units to cover
over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On August 27, 2020,
the underwriters elected to partially exercise their over-allotment option to purchase 1,945,344 Units at a purchase price of $10.00
per Unit and forfeited their election to exercise the remaining over-allotment option.
The underwriters are
entitled to a deferred fee of 3.5% of the gross proceeds of the Initial Public Offering, or $11,180,870. The deferred fee will
be payable in cash to the underwriters solely in the event that the Company completes a Business Combination from the amounts held
in the Trust Account, subject to the terms of the underwriting agreement.
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 with such designations,
voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September
30, 2020, 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 September
30, 2020, there were 9,485,890 shares of common stock issued and outstanding, excluding 30,445,790 shares of common stock subject
to possible redemption.
Warrants —
Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the
Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after
the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public
Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not
be obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle
such warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying
the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations
with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any shares of common
stock upon exercise of a warrant unless common stock issuable upon such warrant exercise has been registered, qualified or deemed
to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed
that as soon as practicable, but in no event later than 15 days, after the closing of a Business Combination, it will use
its best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of common
stock issuable upon exercise of the warrants and thereafter will use its best efforts to cause the same to become effective and
to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of
the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Company’s common
stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition
of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require
holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a
registration statement, but it will be required to use its best efforts to register or qualify the shares under applicable blue
sky laws to the extent an exemption is not available.
Once the warrants
become exercisable, the Company may redeem the Public Warrants:
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
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if, and only if, the reported last sale price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), for any 20 trading days within a 30 trading day period commencing once the warrants become exercisable and ending commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders
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If and when the warrants
become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the
underlying securities for sale under all applicable state securities laws. 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.
NORTHERN GENESIS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
The exercise price
and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including
in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below,
the warrants will not be adjusted for issuance of common stock at a price below its exercise price. 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 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 or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates,
as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such
issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of 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 common stock during the 10 trading day period starting on the trading day prior the day on which the Company consummates
a Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants
will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the
$18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market
Value and the Newly Issued Price.
The Private Placement
Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private
Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants will not be transferable,
assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.
Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are
held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than
the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable
by such holders on the same basis as the Public Warrants.
NOTE 8. FAIR VALUE MEASUREMENTS
The Company follows
the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting
period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of
the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have
received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities,
the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the
use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following
fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in
order to value the assets and liabilities:
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Level 1:
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Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
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Level 2:
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Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
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Level 3:
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Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
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The following table
presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2020,
and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
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Level
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September 30,
2020
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Assets:
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Marketable securities held in Trust Account
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1
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$
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319,478,049
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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. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure
in the financial statements.