NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS
Organization and General
Nebula Acquisition Corporation
(the “Company”) was incorporated in Delaware on October 2, 2017. 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”). The Company is an “emerging growth company,” as defined in
Section 2(a) of the Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”).
At September 30, 2019,
the Company had not commenced any operations. All activity for the period from October 2, 2017 (inception) through September 30,
2019 relates to the Company’s formation, the initial public offering (“Initial Public Offering”) described below,
and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will
not generate any operating revenues until after completion of its initial Business Combination, at the earliest. The Company will
generate non-operating income in the form of investment income from the proceeds derived from the Initial Public Offering. The
fiscal year of the Company is the twelve- month calendar period from January 1 through December 31.
Sponsor and Financing
The Company’s sponsor
is Nebula Holdings, LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Initial
Public Offering was declared effective by the United States Securities and Exchange Commission (the “SEC”) on January
9, 2018. The Company consummated its Initial Public Offering of 27,500,000 Units, including the issuance of 2,500,000 Units
as a result of the underwriters’ partial exercise of their over-allotment option at $10.00 per Unit, generating gross proceeds
of $275 million and incurring offering costs of approximately $15.7 million, inclusive of $9.625 million in deferred underwriting
commissions (Note 3).
Simultaneously with the
closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 5,000,000
warrants (the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant, with the Sponsor, generating
gross proceeds of $7.5 million (Note 4).
The Trust Account
Funds from the Initial
Public Offering have been placed in a trust account (“Trust Account”) with American Stock Transfer and Trust Company.
The proceeds held in the Trust Account may only be invested in U.S. government treasury bills with a maturity of one hundred eighty
(180) days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940,
as amended (the “Investment Company Act”) and that invest only in direct U.S. government obligations. Funds will remain
in the Trust Account until the earlier of (i) the consummation of the initial Business Combination or (ii) the distribution of
the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business,
legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.
The Company’s amended
and restated certificate of incorporation provides that, other than the withdrawal of interest to pay franchise and income taxes
(less up to $500,000 of interest released to the Company for working capital purposes and $100,000 of interest to pay dissolution
expenses, if any), none of the funds held in the Trust Account will be released until the earlier of: (i) the completion of the
initial Business Combination; (ii) the redemption of any shares of Class A common stock included in the Units (the “Public
Shares”) sold in the Initial Public Offering that have been properly tendered in connection with a stockholder vote to amend
the Company’s amended and restated certificate of incorporation to modify the substance or timing of its obligation to redeem
100% of such shares of Class A common stock if it does not complete the initial Business Combination within the Combination Period
(defined below); and (iii) the redemption of 100% of the shares of Class A common stock included in the Units sold in the Initial
Public Offering if the Company is unable to complete an initial Business Combination within the Combination Period (subject to
the requirements of law). The proceeds deposited in the Trust Account could become subject to the claims of the Company’s
creditors, if any, which could have priority over the claims of the Company’s public stockholders.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Initial Business Combination
The Company’s management
has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering, although substantially
all of the net proceeds of the Initial Public Offering are intended to be generally applied toward consummating an initial Business
Combination. The initial Business Combination must occur with one or more target businesses that together have 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. Furthermore,
there is no assurance that the Company will be able to successfully effect an initial Business Combination.
The Company, after signing
a definitive agreement for an initial Business Combination, will either (i) seek stockholder approval of the initial Business Combination
at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether
they vote for or against the initial Business Combination, for cash equal to their pro rata share of the aggregate amount then
on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including
interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income
taxes and up to $500,000 of interest which may be released to the Company for working capital purposes, or (ii) provide stockholders
with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder
vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two
business days prior to the consummation of the initial Business Combination, including interest (which interest shall be net of
taxes payable and up to $500,000 for working capital amounts released to the Company). The decision as to whether the Company will
seek stockholder approval of the initial Business Combination or will allow stockholders to sell their Public Shares in a tender
offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the
transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a
vote is required by law or under NASDAQ rules. If the Company seeks stockholder approval, it will complete its initial Business
Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial Business Combination.
However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less
than $5,000,001 upon consummation of the initial Business Combination. In such case, the Company would not proceed with the redemption
of its Public Shares and the related initial Business Combination, and instead may search for an alternate initial Business Combination.
If the Company holds a
stockholder vote or there is a tender offer for shares in connection with an initial Business Combination, a public stockholder
will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit
in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest
earned on the funds held in the trust account and not previously released to the Company to pay its franchise and income taxes
(less up to $500,000 of interest released to the Company for working capital purposes). As a result, such shares of Class A common
stock have been recorded at redemption amount and classified as temporary equity upon the completion of the Initial Public Offering,
in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
480, “Distinguishing Liabilities from Equity.”
Pursuant to the Company’s
amended and restated certificate of incorporation, if the Company is unable to complete the initial Business Combination within
24 months from the closing of the Initial Public Offering (“Combination Period”), the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter subject
to lawfully available funds therefor, 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 its franchise and income taxes (less up to $500,000 of interest released to the Company for working capital
purposes and $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 each case to the Company’s obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law. The Sponsor and the Company’s officers and directors entered into a letter agreement
with the Company, pursuant to which they agreed to waive their rights to liquidating distributions from the Trust Account with
respect to any Founder Shares (as defined below) held by them if the Company fails to complete the initial Business Combination
within the Combination Period. However, if the Sponsor or any of the Company’s directors, officers or affiliate acquires
shares of Class A common stock in or after the Initial Public Offering, they will be entitled to liquidating distributions from
the Trust Account with respect to such shares if the Company fails to complete the initial Business Combination within the Combination
Period.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
In the event of a liquidation,
dissolution or winding up of the Company after an initial Business Combination, the Company’s stockholders are entitled to
share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made
for each class of stock, if any, having preference over the common stock. The Company’s stockholders have no preemptive or
other subscription rights. There are no sinking fund provisions applicable to the common stock, except that the Company will provide
its stockholders with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount
then on deposit in the Trust Account, upon the completion of the initial Business Combination, subject to the limitations described
herein.
Going Concern Consideration
In connection with the
Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting
Standards Updated (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as
a Going Concern”, management has determined that the mandatory liquidation and subsequent dissolution raises substantial
doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of
assets or liabilities should the Company be required to liquidate after January 12, 2020.
As of September 30, 2019,
the Company had approximately $869,000 in its operating bank account, approximately $6.9 million of investment income available
in the Trust Account to pay for franchise and income taxes (less up to $500,000 of investment income released to the Company for
working capital purposes, of which the Company has not withdrawn any amount since inception, and $100,000 of investment income
to pay dissolution expenses), and working capital deficit of approximately $277,000 (including approximately $1.1 million in franchise
and income tax obligations, which will be paid using investment income held in Trust Account).
Through September
30, 2019, the Company’s liquidity needs have been satisfied through receipt of a $25,000 capital contribution from the
Sponsor in exchange for the issuance of the Founder Shares (Note 5) to the Sponsor, and an aggregate of approximately
$129,000 in advances due to related party, which is discussed in Note 4, approximately $291,000 in loans from the Sponsor,
the net proceeds from the consummation of the Private Placement not held in Trust, and proceeds from investment income
released from Trust Account to pay for taxes. The Company repaid the loans from the Sponsor in full in February 2018. We
anticipate that we may need to obtain additional loans from the Sponsor or obtain funding from other sources in order to
satisfy our working capital requirements through January 12, 2020, our mandatory liquidation date.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.
GAAP”) for interim financial information and pursuant to rules and regulations of the SEC. Accordingly, they do not include
all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal
accruals) considered for a fair presentation have been included. Operating results for the three and nine months ended September
30, 2019 is not necessarily indicative of the results that may be expected through December 31, 2019.
The accompanying unaudited
condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in
the Company’s Annual Report on Form 10-K for fiscal year 2018, which was filed by the Company with the SEC on February 15,
2019.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Emerging Growth Company
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 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 statement with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended
transition period difficult or impossible because of the potential differences in accounting standards used.
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.
Financial Instruments
The fair value of the
Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements
and Disclosures,” approximates the carrying amounts represented in the condensed balance sheet.
Fair Value Measurements
Fair value is defined
as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between
market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used
in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
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Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
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Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
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Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
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In some circumstances,
the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances,
the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant
to the fair value measurement.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Use of Estimates
The preparation of the
financial statement 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
statement. Actual results could differ from those estimates.
Offering Costs
The Company complies with
the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A-Expenses of Offering.” Offering
costs consist of costs incurred in connection with formation and preparation for the Initial Public Offering. These costs, together
with the underwriter discount, was charged to additional paid-in capital upon completion of the Initial Public Offering.
Class A Common Stock subject to possible redemption
As discussed in Note 1,
all of the 27,500,000 common shares sold as part of a Unit in the Initial Public Offering contain a redemption feature which allows
for the redemption of common shares under the Company’s Liquidation or Tender Offer/Stockholder Approval provisions. In accordance
with FASB ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside
of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity
instruments, are excluded from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold,
its charter provides that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’
equity) to be less than $5,000,001.
The Company recognizes
changes in redemption value immediately as they occur and adjusts the carrying value of the security at the end of each reporting
period. Increases or decreases in the carrying amount of redeemable common stock shall be affected by charges against additional
paid-in capital. Accordingly, at September 30, 2019 and December 31, 2018, 26,700,858 and 26,452,491 of the 27,500,000 Public Shares
were classified outside of permanent equity, respectively.
Net Income per Share
Net income per share is
computed by dividing net income by the weighted-average number of common stock outstanding during the periods. The Company has
not considered the effect of the warrants sold in the initial Public Offering (including the consummation of the over-allotment)
and Private Placement to purchase an aggregate of 14,166,667 shares of the Company’s Class A common stock in the calculation
of diluted income per share, since their inclusion would be anti-dilutive under the treasury stock method.
The Company’s condensed
statements of operations include a presentation of income per share for common stock subject to redemption in a manner similar
to the two-class method of income per share. Net income per share, basic and diluted for Class A common stock is calculated by
dividing the interest income earned on the Trust Account, net of applicable taxes and funds available to be withdrawn from Trust
for working capital purposes, by the weighted average number of Class A common stock outstanding for the period. Net income per
share, basic and diluted for Class B common stock is calculated by dividing the net income, less income attributable to Public
shares, by the weighted average number of Class B common stock outstanding for the period.
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 statement’s
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. Management has determined that a full valuation allowance on the deferred tax asset (related
to start up costs) is appropriate at this time after consideration of all available positive and negative evidence related to the
realization of the deferred tax asset.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 2019 or December
31, 2018. 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 at September 30, 2019 or December 31, 2018. 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.
Recent Accounting Pronouncements
Management does not believe
that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s
financial statements.
Note 3-Public Offering
On January 12, 2018, the
Company sold 27,500,000 Units, including the issuance of 2,500,000 Units as a result of the underwriters’ partial exercise
of their over-allotment option, at a price of $10.00 per Unit.
Each Unit consists of
one share of the Company’s Class A common stock, $0.0001 par value, and one-third of one redeemable warrant (each, a “Warrant”
and, collectively, the “Warrants”). Each whole Warrant entitles the holder to purchase one share of Class A common
stock at a price of $11.50 per share. No fractional shares will be issued upon separation of the Units and only whole Warrants
will trade. Each Warrant will become exercisable on the later of 30 days after the completion of the Company’s initial Business
Combination or 12 months from the closing of the Initial Public Offering and will expire five years after the completion of the
Company’s initial Business Combination or earlier upon redemption or liquidation. Once the Warrants become exercisable, the
Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’
prior written notice of redemption, if and only if the last sale price of the Company’s Class A common stock 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 sent the notice of redemption to the Warrant holders.
The Company granted the
underwriters a 45-day option to purchase up to 3,750,000 additional Units to cover any over-allotments at the initial public offering
price less the underwriting discounts and commissions. The Units that were issued in connection with the over-allotment option
are identical to the Units issued in the Initial Public Offering. On January 12, 2018, the Company was advised by the underwriters’
that it had elected to exercise a portion of the over-allotment option for 2,500,000 additional Units for additional gross
proceeds of $25 million. The partial exercise resulted in a forfeiture of 312,500 shares of Class B common stock during the year
ended December 31, 2018.
The Company paid an underwriting
discount of 2.0% of the per Unit offering price to the underwriters at the closing of the Initial Public Offering (or $5.5 million),
with an additional fee (the “Deferred Discount”) of 3.5% of the gross offering proceeds (or $9.625 million) payable
upon the Company’s completion of an initial Business Combination. The Deferred Discount will become payable to the underwriters
from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination.
Note 4-Related Party Transactions
Founder Shares
On October 16, 2017, the
Sponsor purchased 7,187,500 shares of Class B common stock (the “Founder Shares”) for an aggregate price of $25,000.
As used herein, unless the context otherwise requires, Founder Shares shall be deemed to include the shares of Class A common stock
issuable upon conversion thereof. The Founder Shares are identical to the Class A common stock included in the Units sold in the
Initial Public Offering except that the Founder Shares automatically convert into shares of Class A common stock at the time of
the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in more detail
below. Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares
of Class A common stock, subject to adjustment as provided above, at any time. The Sponsor agreed to forfeit up to 937,500 Founder
Shares to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares will
represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering (see Note 5). In December
2017, the Sponsor transferred 25,000 Founder Shares to each of the Company’s then independent directors, at the original
per share purchase price. Also, in January 2018, another 25,000 Founder Shares were transferred to one of the Company’s independent
directors. The 100,000 Founder Shares held by the Company’s independent directors was not subject to forfeiture in the event
the underwriters’ over-allotment option was not exercised. On January 12, 2018, the Company was advised by the underwriters’
that it had elected to exercise a portion of the over-allotment option for 2,500,000 additional Units for additional gross
proceeds of $25 million. The partial exercise resulted in a forfeiture of 312,500 shares of Class B common stock during the year
ended December 31, 2018.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
The Company’s initial
stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the
earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business
Combination, (x) if the last sale price of the Company’s Class A 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 the initial Business Combination, or (y) the date on which the Company completes
a liquidation, merger, stock exchange 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.
Private Placement
Simultaneously with the
closing of the Initial Public Offering on January 12, 2018, the Sponsor paid the Company $7.5 million for 5,000,000 Private Placement
Warrants at a price of $1.50 per whole warrant. Each whole Private Placement Warrant is exercisable for one whole share of the
Company’s Class A common stock at a price of $11.50 per share. A portion of the purchase price of the Private Placement Warrants
has been added to the proceeds from the Initial Public Offering held in the Trust Account. If the initial Business Combination
is not completed 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. 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 have 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.
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 (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock)
pursuant to a registration rights agreement signed on January 12, 2018. These holders are 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 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.
Related Party Loans
The Company’s Sponsor
had loaned the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory
note (the “Note”). This loan was non-interest bearing and payable on the earlier of March 31, 2018 or upon the completion
of the Initial Public Offering. In February 2018, the Company repaid this amount in full.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Due to Related Party
An affiliate of the Company
paid general and administrative expenses on behalf of the Company. An aggregate of approximately $129,000 and $96,000, as reflected
in the accompanying condensed balance sheets are outstanding as of September 30, 2019 and December 31, 2018, respectively. These
amounts are due on demand and are non-interest bearing.
Note 5-Stockholders’ Equity
Common Stock
The authorized common
stock of the Company includes up to 100,000,000 shares of Class A common stock and 10,000,000 shares of Class B common stock. If
the Company enters into an initial Business Combination, it may (depending on the terms of such an initial Business Combination)
be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time
as the Company’s stockholders vote on the initial Business Combination to the extent the Company seeks stockholder approval
in connection with the initial Business Combination. Holders of the Company’s common stock are entitled to one vote for each
share of common stock.
On October 16, 2017, the
Sponsor purchased 7,187,500 shares of Class B common stock for $25,000. The Sponsor had agreed to forfeit up to 937,500 Founder
Shares to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares will
represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering. On January 12, 2018, the
Company was advised by the underwriters’ that it had elected to exercise a portion of the over-allotment option for 2,500,000
additional Units for additional gross proceeds of $25 million. The partial exercise resulted in the forfeiture of 312,500 shares
of Class B common stock during the year ended December 31, 2018. As of September 30, 2019 and December 31, 2018, there were 6,875,000
shares of Class B common stock issued and outstanding and 27,500,000 shares of Class A common stock outstanding and 26,700,858
and 26,452,491 of the shares of Class A common stock are classified outside of equity as redeemable common stock, respectively).
Preferred Stock
The Company is authorized
to issue 1,000,000 shares of preferred stock 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, 2019 and December 31, 2018, there were no shares
of preferred stock issued or outstanding.
Warrants
The 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 common stock 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 best efforts to file with the SEC a registration statement for the registration, under the Securities Act,
of the Class A common stock issuable upon exercise of the public warrants. The Company 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 public warrants in accordance with the provisions of the warrant agreement. If a registration statement
covering the Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) day
after the closing of the initial business combination, warrant holders may, until such time as there is an effective registration
statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants
on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. The public warrants
will expire five years after the completion of a business combination or earlier upon redemption or liquidation.
NEBULA ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
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 Class A common stock 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
|
|
|
|
|
●
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if, and only if, the last reported closing price of the common stock 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.
The exercise price and
number of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the
event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted
for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required
to net cash settle the warrants shares. 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.
Note 6-Fair Value Measurements
The following table presents
information about the Company’s assets that are measured on a recurring basis as of September 30, 2019 and December 31, 2018
and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
September 30, 2019
|
|
Quoted Prices
in Active
Markets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Other
Unobservable
Inputs
|
|
Description
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Investment held in Trust Account
|
|
$
|
281,910,891
|
|
|
|
-
|
|
|
|
-
|
|
December 31, 2018
|
|
Quoted Prices
in Active
Markets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Other
Unobservable
Inputs
|
|
Description
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Investment held in Trust Account
|
|
$
|
278,323,607
|
|
|
|
-
|
|
|
|
-
|
|
At September 30, 2019
and December 31, 2018, the investment held in the Trust Account were held in marketable securities.
Note 7-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
available to be issued.