NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
Note 1 — Description of Organization
and Business Operations
Novus Capital Corporation
(the “Company”) was incorporated in Delaware on March 5, 2020. 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 the risks associated with early stage and emerging
growth companies.
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.
Our activities since May 19, 2020, have consisted of the search
and evaluation of potential targets in contemplation of a business combination. All activity for the period from March 5, 2020
(inception) through May 18, 2020 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 statement
for the Company’s Initial Public Offering was declared effective on May 14, 2020. On May 19, 2020, the Company consummated
the Initial Public Offering of 10,000,000 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 $100,000,000, which is described
in Note 3.
Simultaneously with
the closing of the Initial Public Offering, the Company consummated the sale of 3,250,000 warrants (the “Private Warrants”)
at a price of $1.00 per Private Warrant in a private placement to the Company’s founding stockholders (the “Sponsors”)
and EarlyBirdCapital, Inc. (“EarlyBirdCapital”), generating gross proceeds of $3,250,000, which is described in Note
4.
Following the closing
of the Initial Public Offering on May 19, 2020, an amount of $100,000,000 ($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 Warrants was placed in a trust account (the “Trust Account”)
located in the United States, and invested 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 or (ii) the distribution of the Trust Account, as described below.
Transaction costs
amounted to $2,456,726 consisting of $2,000,000 of underwriting fees and $456,726 of other offering costs. In addition, as of June
30, 2020, cash of $599,079 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 Warrants, although substantially all 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.
NOVUS CAPITAL CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
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
anticipated to be $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 initial stockholders
and EarlyBirdCapital have agreed to vote their Founder Shares (as defined in Note 5), Representative Shares (as defined in Note
7) and any Public Shares purchased during or 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 do not vote at all.
The initial stockholders
and EarlyBirdCapital have agreed (a) to waive their redemption rights with respect to their Founder Shares and Public Shares held
by it in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from
the Trust Account with respect to the Founder Shares and Representative 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 19, 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 Company’s Chief Financial Officer 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 Sponsors 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 Sponsors 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.
NOVUS CAPITAL CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 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 of the SEC. 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. 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 May 15, 2020, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on May
20, 2020 and May 22, 2020. The interim results for the three months ended June 30, 2020 and for the period from March 5, 2020 (inception)
through June 30, 2020 are not necessarily indicative of the results to be expected for the period 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, 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 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 June 30, 2020.
Marketable Securities Held in Trust
Account
At June 30, 2020,
substantially all of the assets held in the Trust Account were held U.S. Treasury Bills.
NOVUS CAPITAL CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
Common Stock Subject to Possible Redemption
The Company accounts
for its common stock subject to possible redemption in accordance with guidance in Accounting Standards Codification (“ASC”)
Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to 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 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 stockholder’s 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 statement
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 includes 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 process 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 June 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.
On March 27, 2020,
President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes
several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net
operating losses (“NOL) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend
the excess business loss rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally
loosen the business interest limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections
included in the Tax Cuts and Jobs Act tax provisions. The Company does not believe that the CARES Act will have a significant impact
on Company's financial position or statement of operations.
Net Loss per Common Share
Net loss per share
is computed by dividing net loss by the weighted average number of common stock outstanding during the period. Shares of common
stock subject to possible redemption at June 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 13,250,000 shares of common stock in the calculation of diluted loss per share,
since the exercise of the warrants are 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 period presented.
NOVUS CAPITAL CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
Concentration of Credit Risk
Financial instruments
that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which,
at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account.
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.
Recent Accounting Pronouncements
Management does not
believe that any recently issued, but not yet effective, accounting pronouncements, 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 10,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of common stock
and one 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 Sponsors and EarlyBirdCapital purchased 3,250,000 Private Warrants (2,750,000 private
warrants by our Sponsors and/or their designees and 500,000 Private Warrants by EarlyBirdCapital and/or its designees) at a price
of $1.00 per Private Warrant. The proceeds from the private placement of the Private Warrants were added to the proceeds of the
Initial Public Offering to be 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 Warrants 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 March 2020, the
initial stockholders purchased 2,875,000 shares (the “Founder Shares”) of the Company’s common stock for an aggregate
price of $25,000. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the initial stockholders
to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the initial stockholders
would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the
initial stockholders did not purchase any Public Shares in the Initial Public Offering and excluding the Representative Shares).
As a result of the underwriters’ election to not exercise their over-allotment option on May 19, 2020, the 375,000 Founder
Shares were forfeited.
The initial stockholders
have 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 March 2020, the
Company issued an unsecured promissory note to Robert J. Laikin, the Company’s Chairman (the “Promissory Note”),
pursuant to which the Company may borrow up to an aggregate principal amount of $150,000. The Promissory Note is non-interest bearing
and payable on the earlier of (i) March 1, 2021, (ii) the consummation of the Initial Public Offering or (iii) the date on which
the Company determines not to proceed with the Initial Public Offering. The outstanding amount of $97,525 was repaid on May 19,
2020.
NOVUS CAPITAL CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
Related Party Loans
In addition, in order
to finance transaction costs in connection with a Business Combination, or certain of the Company’s officers, directors or
initial stockholders 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 warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be
identical to the Private Warrants.
Note 6 — Commitments
Registration Rights
Pursuant to a registration
of rights agreement entered into on May 19, 2020, the holders of the Founder Shares and Representative Shares, as well as the holders
of the Private Warrants and any warrants 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 Warrants and warrants 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.
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 stockholders
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 an aggregate of $3,500,000
(exclusive of any applicable finders’ fees which might become payable); provided that up to 30% 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. EarlyBirdCapital
will also receive a cash fee equal to 1% of the consideration issued to the target business, if a Business Combination is consummated
with a target business introduced by EarlyBirdCapital.
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 June 30,
2020, there were no shares of preferred stock issued or outstanding.
Common Stock
— The Company is authorized to issue 30,000,000 shares of common stock with a par value of $0.0001 per share. At June 30,
2020, there were 3,075,821 shares of common stock issued and outstanding, excluding 9,574,179 shares of common stock subject to
possible redemption.
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.
NOVUS CAPITAL CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
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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•
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at a price of $0.01 per warrant;
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•
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upon not less than 30 days’ prior written notice of redemption;
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•
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if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 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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•
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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.
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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
are identical to the Public Warrants underlying the Units 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,
except as described below, 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 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 March 2020, the
Company issued to the designees of EarlyBirdCapital 150,000 shares of common stock (the “Representative Shares”). 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 $1,304 based upon the price
of the Founder Shares issued to the initial stockholders. 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.
NOVUS CAPITAL CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(UNAUDITED)
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 — Fair Value Measurements
The Company follows
the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting
period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of
the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have
received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities,
the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the
use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following
fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in
order to value the assets and liabilities:
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
|
|
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
|
|
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The following table
presents information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2020, and
indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
|
June 30,
2020
|
|
Assets:
|
|
|
|
|
|
|
|
|
Marketable securities held in Trust Account
|
|
|
1
|
|
|
$
|
100,011,032
|
|
Note 9— Subsequent Events
The Company evaluated
subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed 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 condensed financial statements.