NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Note 1 — Description of Organization,
Business Operations and Basis of Presentation
SCVX Corp. (the “Company”)
was incorporated as a Cayman Islands exempted company on November 15, 2019. The Company was formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or
more businesses (the “Business Combination”). Although the Company is not limited to a particular industry or sector
for purposes of consummating a Business Combination, the Company intends to focus its search for a target business in the cybersecurity
sector. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging
growth companies.
As of June 30, 2020,
the Company had not commenced any operations. All activity for the period from November 15, 2019 (inception) through June
30, 2020 relates to the Company’s formation and the initial public offering described below, and, since the closing of the
Initial Public Offering (as defined below), the search for a prospective initial Business Combination. The Company will not generate
any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial
Public Offering. The Company has selected December 31 as its fiscal year end.
The Company’s
sponsor is SCVX USA LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for
the Initial Public Offering was declared effective on January 23, 2020. On January 28, 2020, the Company consummated the Initial
Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A ordinary shares included
in the Units, the “Public Shares”), including the issuance of 3,000,000 Units as a result of the underwriters’
exercise of their over-allotment option in full, at $10.00 per Unit, generating gross proceeds of $230.0 million,
and incurring offering costs of approximately $13.3 million, inclusive of $8.05 million in deferred underwriting commissions (Note 5).
Simultaneously with
the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 6,600,000
warrants (the “Private Placement Warrants”) to the Sponsor at a purchase price of $1.00 per Private Placement Warrant,
generating gross proceeds to the Company of $6.6 million (Note 4).
Upon the closing of
the Initial Public Offering and the Private Placement, $230.0 million ($10.00 per Unit) of the net proceeds of the Initial
Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (the “Trust Account”),
located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and was invested only in U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act (as defined below), with
a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected
by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act,
as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the
Trust Account as described below.
The Company’s
management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and
the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the
assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust
Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a
Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of
the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Company will provide
its holders (the “Public Shareholders”) of its Class A ordinary shares, par value $0.0001, sold in the Initial Public
Offering (the “Public Shares”), with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii)
by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem
their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public
Share). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by
the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares are
classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting
Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company
will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of
a Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote
is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company
will, pursuant to its Amended and Restated Memorandum and Articles of Association (the “Amended and Restated Memorandum and
Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange
Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however,
shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business
or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules
and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective
of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business
Combination, the initial shareholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 4)
and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. Subsequent to the
consummation of the Initial Public Offering, the Company adopted an insider trading policy which requires insiders to: (i) refrain
from purchasing shares during certain blackout periods and when they are in possession of any material non-public information
and (ii) to clear all trades with the Company’s Chief Financial Officer (or his or her designee) prior to execution. In addition,
the initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in
connection with the completion of a Business Combination.
Notwithstanding the
foregoing, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any
affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is restricted from
redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public
Offering, without the prior consent of the Company.
The Company’s
Sponsor, officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the Amended
and Restated Memorandum and Articles of Association (a) that would modify the substance or timing of the Company’s obligation
to redeem 100% of its Public Shares if the Company does not complete a Business Combination within 24 months from the closing
of the Initial Public Offering, or January 28, 2022 (the “Combination Period”) or (b) with respect to any other provision
relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public
Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If the Company is
unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the
purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided
by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights
as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s
board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under
Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Sponsor has agreed
to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within
the Combination Period. However, if the Sponsor or members of the Company’s management team acquire Public Shares in or after
the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public
Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive
their rights to their deferred underwriting commission (Note 5) held in the Trust Account in the event the Company does not complete
a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held
in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it
is possible that the per-share value of the residual assets remaining available for distribution (including Trust Account assets)
will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the
Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold
to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce
the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed
a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under
the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver
is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due
to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with
which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in
or to monies held in the Trust Account.
Liquidity
As of June 30, 2020,
the Company had approximately $985,000 in its operating bank accounts, and working capital of approximately $1.1 million.
Prior to the completion
of the Initial Public Offering and Private Placement, the Company’s liquidity needs were satisfied through a capital contribution
of $25,000 from the Sponsor in exchange for the issuance of the Founder Shares, and a borrowing of approximately $139,000 under
the Note (as defined below) issued to the Sponsor. The Company fully repaid the Note to the Sponsor on January 28, 2020. Subsequent
to the consummation of the Initial Public Offering and Private Placement, the Company’s liquidity needs have been satisfied
through the proceeds from the consummation of the Private Placement not held in the Trust Account.
In addition, in order
to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors, may, but are not obligated to, provide the Company with Working Capital Loans (as
defined below in Note 4). The Working Capital Loans will either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants
of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private
Placement Warrants.
On January 30, 2020,
the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the
“COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase
in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the
Company’s results of operations, financial position and cash flows will depend on future developments, including the duration
and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak
on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or
the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash
flows may be materially adversely affected.
Based on the foregoing,
management believes that the Company has sufficient liquidity to meet its anticipated obligations until the earlier of the consummation
of the initial Business Combination or liquidation.
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Basis of Presentation
The accompanying unaudited
condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the
United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly,
they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed
financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement
of the balances and results for the periods presented. Operating results for the period for the three and six months ended June
30, 2020 are not necessarily indicative of the results that may be expected through December 31, 2020.
The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes
thereto included in the Form 8-K and the final prospectus filed by the Company with the SEC on February 3, 2020 and January 24,
2020, respectively.
Emerging Growth Company
The Company is an
“emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute
payments not previously approved.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not
have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply
with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and
it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new
or revised standard at the time private companies adopt the new or revised standard.
This may make comparison
of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging
growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
Note 2 — Summary of Significant
Accounting Policies
Use of Estimates
The preparation of
financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of such financial
statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk
Financial instruments
that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which,
at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts
and management believes the Company is not exposed to significant risks on such accounts.
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Cash and Cash Equivalents
The Company considers
all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company
had approximately $230.5 million and $0 in cash equivalents held in the Trust Account as of June 30, 2020 and December 31, 2019,
respectively.
Financial Instruments
The fair value of
the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements
and Disclosures,” approximates the carrying amounts represented in the balance sheet.
As of June 30, 2020
and December 31, 2019, the carrying values of cash and accrued expenses approximate their fair values due to the short-term nature
of the instruments.
Offering Costs Associated with the Initial
Public Offering
Offering costs consist
of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that were directly related to the
Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
Class A
Ordinary Shares Subject to Possible Redemption
Class A
ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that
are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified
as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary
shares subject to possible redemption at the redemption amount are presented at redemption value as temporary equity, outside
of the shareholders’ equity section of the Company’s balance sheet.
Net Loss Per Ordinary Share
Net loss per share
is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period. An aggregate
of 21,811,840 Class A ordinary shares subject to possible redemption at June 30, 2020 was excluded from the calculation of basic
loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings.
The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase
an aggregate of 18,100,000 Class A ordinary shares in the calculation of diluted loss per ordinary share, since they are not yet
exercisable.
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Reconciliation of net loss per ordinary
share
The Company’s
net income is adjusted for the portion of income that is attributable to Class A ordinary shares subject to possible redemption,
as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly,
basic and diluted loss per ordinary share is calculated as follows:
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
|
June 30,
2020
|
|
June 30,
2020
|
|
|
|
|
|
Net income
|
|
$
|
120,324
|
|
|
$
|
233,038
|
|
Less: Income attributable to Class A ordinary shares subject to possible redemption (a)
|
|
|
(228,295
|
)
|
|
|
(496,613
|
)
|
|
|
|
|
|
|
|
|
|
Adjusted net loss
|
|
$
|
(107,971
|
)
|
|
$
|
(263,575
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average ordinary shares outstanding, basic and diluted
|
|
|
6,906,569
|
|
|
|
6,738,966
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per ordinary share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
(a) Interest earned on marketable securities held in Trust Account
|
|
$
|
240,741
|
|
|
$
|
523,688
|
|
Percentage of Class A ordinary shares subject to possible redemption to total ordinary shares
|
|
|
94.83
|
%
|
|
|
94.83
|
%
|
|
|
|
|
|
|
|
|
|
Income attributable to Class A ordinary shares subject to possible redemption
|
|
$
|
228,295
|
|
|
$
|
496,613
|
|
Income Taxes
The Company follows
the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets
and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to
the amount expected to be realized.
FASB ASC 740 prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken
or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2020 and December 31,
2019. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued
for the payment of interest and penalties for the three and six months ended 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.
The Company is considered
a Cayman Islands exempted company, and is presently not subject to income taxes or income tax filing requirements in the Cayman
Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Recent Accounting Pronouncements
The Company’s
management does not believe that there are any recently issued, but not yet effective, accounting pronouncements that, if currently
adopted, would have a material effect on the Company’s financial statements.
Note 3 — Initial Public Offering
On January 28, 2020,
the Company sold 23,000,000 Units, including the issuance of 3,000,000 Units as a result of the underwriters’ exercise
of their over-allotment option in full, at $10.00 per Unit in the Initial Public Offering. Each Unit consists of one
Class A ordinary share, and one-half of one redeemable warrant (each, a “Public Warrant”). Each Public Warrant
entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (Note 6).
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Note 4 — Related Party Transactions
Founder Shares
In November 2019,
the Sponsor purchased 5,750,000 Class B ordinary shares, par value $0.0001 (the “Founder Shares”), for an aggregate
price of $25,000. In December 2019, the Sponsor transferred an aggregate of 1,092,500 Founder Shares to members of the Company’s
management team. The holders of the Founder Shares have agreed to forfeit up to an aggregate of 750,000 Founder Shares, on a pro
rata basis, to the extent that the over-allotment option was not exercised in full by the underwriters. On January 28, 2020,
the over-allotment option was exercised in full. Accordingly, no Founder Shares were forfeited.
The initial shareholders
agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of:
(1) one year after the completion of the initial Business Combination and (2) the date on which the Company consummates a liquidation,
merger, share exchange, reorganization, or other similar transaction after the initial Business Combination that results in all
of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Notwithstanding the foregoing, if the last reported sale price of the Company’s Class A ordinary shares equals or exceeds
$12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business
Combination, the Founder Shares will be released from the lock-up.
Private Placement Warrants
Simultaneously with
the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,600,000 Private Placement Warrants at
a price of $1.00 per Private Placement Warrant, generating gross proceeds of $6.6 million. Each whole Private Placement Warrant
is exercisable for one whole Class A ordinary share at a price of $11.50 per share. Certain proceeds from the Private Placement
Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete
a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement
Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
The Sponsor and the
Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private
Placement Warrants until 30 days after the completion of the initial Business Combination.
Related Party Loans
On November 19,
2019, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses pursuant to a promissory note (the
“Note”). This loan was non-interest bearing and payable upon the completion of the Initial Public Offering. The
Company borrowed approximately $139,000 under the Note and fully repaid this amount on January 28, 2020.
In addition, in order
to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors, may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of
the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds
held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds
held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay
the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined
and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital
Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would
be identical to the Private Placement Warrants. As of June 30, 2020, the Company had no borrowings under any Working Capital Loans.
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Administrative Support Agreement
Commencing on the
date that the Company’s securities were first listed on the New York Stock Exchange, the Company agreed to pay the Sponsor
a total of $10,000 per month for office space, administrative and support services. Upon completion of the Initial Business Combination
or the Company’s liquidation, the Company will cease paying these monthly fees. The Company incurred $30,000 and $60,000
in expenses in connection with such services during the three and six months ended June 30, 2020, respectively, as reflected in
the accompanying unaudited condensed statement of operations. As of June 30, 2020, an aggregate of $60,000 in accrued expenses
with related party was outstanding, as reflected in the accompanying unaudited condensed balance sheet.
Note 5 — Commitments & Contingencies
Registration Rights
The holders of Founder
Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, are entitled
to registration rights pursuant to a registration rights agreement. These holders will be entitled to certain demand and “piggyback”
registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement
filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities
to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted
the underwriters a 45-day option from the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000
additional Units to cover over-allotments at the Initial Public Offering price less the underwriting discounts and commissions.
The underwriters fully exercised their over-allotment option on January 28, 2020.
The underwriters were
entitled to an underwriting discount of $0.20 per unit, or $4.6 million in the aggregate, which was paid upon the closing
of the Initial Public Offering. In addition, $0.35 per unit, or $8.05 million in the aggregate, will be payable to the underwriters
for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Note 6 — Shareholders’ Equity
Class A Ordinary
Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001
per share. There were no Class A ordinary shares issued and outstanding as of December 31, 2019. As of June 30, 2020, there were
23,000,000 Class A ordinary shares outstanding, including 21,811,840 Class A ordinary shares subject to possible redemption that
are classified as temporary equity in the accompanying balance sheet.
Class B Ordinary
Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per
share. As of June 30, 2020 and December 31, 2020, there were 5,750,000 Class B ordinary shares outstanding. Of the 5,750,000 Class
B ordinary shares outstanding as of December 31, 2019, an aggregate of up to 750,000 shares were subject to forfeiture to
the Company for no consideration to the extent that the underwriters’ over-allotment option was not exercised in full
or in part. On January 28, 2020, the over-allotment option was exercised in full. Accordingly, no Class B ordinary shares were
forfeited.
Class A ordinary shareholders
and Class B ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders
and vote together as a single class, except as required by law; provided, that, prior to the Company’s initial Business Combination,
holders of the Class B ordinary shares will have the right to elect all of the Company’s directors and remove members of
the board of directors for any reason, and holders of the Class A ordinary shares will not be entitled to vote on the election
of directors during such time.
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Class B ordinary
shares will automatically convert into Class A ordinary shares at the time of the Initial Business Combination on a one-for-one basis,
subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and
the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities,
are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of the initial
Business Combination, the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted
(unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment
with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of
all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of all ordinary shares
issued and outstanding upon the completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities
issued or deemed issued in connection with the initial Business Combination, excluding any shares or equity-linked securities
issued, or to be issued, to any seller in the initial Business Combination.
Preferred Shares —
The Company is authorized to issue 1,000,000 preferred shares with such designations, voting and other rights and preferences as
may be determined from time to time by the Company’s board of directors. As of June 30, 2020 and December 31, 2020, there
were no preferred shares issued or outstanding.
Warrants —
Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation
of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days
after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided
in each case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares
issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders
to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities
Act). The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business
Combination, the Company will use its reasonable best efforts to file with the SEC a registration statement for the registration,
under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. If the shares issuable
upon exercise of the warrants are not registered under the Securities Act, the Company will be required to permit holders to exercise
their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and the Company will
not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such
exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration
is available. Notwithstanding the above, if the Company’s Class A ordinary shares are at the time of any exercise of a warrant
not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section
18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants
to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company
elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its reasonable
best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The Public Warrants
will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In addition, if
(x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with
the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share
(with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in
the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor
or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds
from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the
initial Business Combination on the date of the completion of the initial Business Combination (net of redemptions), and (z) the
volume weighted average trading price of the ordinary shares during the 20-trading day period starting on the trading day prior
to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below
$9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of
the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below will be adjusted
(to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Private Placement
Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private
Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable
or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the
Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’
permitted transferees. If the Private Placement Warrants are held by someone other than the initial shareholders or their permitted
transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis
as the Public Warrants.
The Company may call
the Public Warrants for redemption (except with respect to the Private Placement Warrants):
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●
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in
whole and not in part;
|
|
●
|
at
a price of $0.01 per warrant;
|
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption; and
|
|
●
|
if,
and only if, the last reported closing price of the Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading
days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice
of redemption to the warrant holders.
|
If the Company calls
the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants
to do so on a “cashless basis,” as described in the warrant agreement. Additionally, in no event will the Company be
required to net cash settle any warrants. If the Company is unable to complete the initial Business Combination within the Combination
Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with
respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account
with respect to such warrants. Accordingly, the warrants may expire worthless.
NOTE 7. FAIR VALUE MEASUREMENTS
The Company follows
the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting
period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of
the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have
received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities,
the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the
use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following
fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in
order to value the assets and liabilities:
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●
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Level
1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market
in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on
an ongoing basis.
|
|
●
|
Level
2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar
assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
●
|
Level
3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing
the asset or liability.
|
SCVX CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The following table
presents information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2020 and
December 31, 2019 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
June 30,
2020
|
|
December 31,
2019
|
Assets held in Trust Account:
|
|
|
|
|
|
|
Money market fund
|
|
|
1
|
|
|
$
|
230,523,688
|
|
|
$
|
—
|
|
Note 7 — Subsequent Events
Management has evaluated
subsequent events to determine if events or transactions occurring through the date the financial statements were issued required
potential adjustment to or disclosure in the financial statements and has concluded that all such events that would require recognition
or disclosure have been recognized or disclosed.