(1) Includes 750,000 shares subject to
forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Property
Solutions Acquisition Corp. (the “Company”) was incorporated in Delaware on February 11, 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”).
Although
the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination,
the Company intends to focus on businesses that service the real estate industry. The Company is an early stage and emerging growth
company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As
of September 30, 2020, the Company had not commenced any operations. All activity for the period from February 11, 2020 (inception)
through September 30, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”),
which is described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination.
The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The
Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The
registration statement for the Company’s Initial Public Offering was declared effective on July 21, 2020. On July 24, 2020,
the Company consummated the Initial Public Offering of 20,000,000 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
$200,000,000, which is described in Note 3.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 535,000 units (the “Private Units”)
at a price of $10.00 per Private Unit in a private placement to Property Solutions Acquisition Sponsor, LLC (the “Sponsor”)
and EarlyBirdCapital, Inc. (“EarlyBirdCapital”), generating gross proceeds of $5,350,000, which is described in Note
4.
Following
the closing of the Initial Public Offering on July 24, 2020, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds
of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (the “Trust
Account”) located in the United States and invested only in U.S. government securities, within the meaning set forth
in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a
maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected
by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the
earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account,
as described below.
On
July 29, 2020, the underwriters notified the Company of their intent to partially exercise their over-allotment option on July
31, 2020. As such, on July 31, 2020, the Company consummated the sale of an additional 2,977,658 Units, at $10.00 per Unit, and
the sale of an additional 59,551 Private Units, at $10.00 per Private Unit, generating total gross proceeds of $30,371,190. A
total of $29,775,680 of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust
Account to $229,775,680.
Transaction
costs amounted to $5,117,030 consisting of $4,595,510 of underwriting fees and $521,520 of other offering costs. In addition,
$813,980 of cash was held outside of the Trust Account (as defined below) and is available for working capital purposes.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally
toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination
successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets
held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter
into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns
or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the
target sufficient for it not to be required to register as an investment company under the Investment Company Act.
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.
PROPERTY SOLUTIONS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
The
Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior
to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares
voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide
to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate
of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the
tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the
SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination.
If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval
for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the
proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business
Combination, the Sponsor and EarlyBirdCapital have agreed to vote their Founder Shares (as defined in Note 5), Representative
Shares (as defined in Note 7), Private Shares (as defined in Note 4) and any Public Shares purchased 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 Initial transaction or don’t vote at all.
The
Sponsor and EarlyBirdCapital have agreed (a) to waive their redemption rights with respect to their Founder Shares, Private
Shares and Public Shares held by them 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, Representative Shares and Private Shares
if the Company fails to consummate a Business Combination, and (b) 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 April 24, 2022 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. There will be no redemption rights or liquidating
distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business
Combination within the Combination Period.
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent
any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the
Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $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 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 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.
Risks
and Uncertainties
In
March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues
to spread throughout the United States and the World. As of the date the financial statement was issued, there was considerable
uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that
COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily
determinable as of the date of this financial statement. The financial statement does not include any adjustments that might result
from the outcome of this uncertainty.
PROPERTY SOLUTIONS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions
to Form 10-Q and Article 8 of Regulation S-X promulgated under the Securities Act. Certain information or footnote disclosures
normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules
and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes
necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which
are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its
Initial Public Offering as filed with the SEC on July 22, 2020, as well as the Company’s Current Report on Form 8-K, as
filed with the SEC on July 24, 2020 and July 30, 2020. The interim results for the three months ended September 30, 2020 and for
the period from February 11, 2020 (inception) through September 30, 2020 are not necessarily indicative of the results to be expected
for the year ending December 31, 2020 or for any future periods.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart
Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to,
not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of
the Sarbanes-Oxley Act, 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 condensed financial statements in conformity with GAAP requires the Company’s management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered
in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual
results could differ significantly from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of September 30, 2020.
Marketable
Securities Held in Trust Account
At
September 30, 2020, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills.
PROPERTY SOLUTIONS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Common
Stock Subject to Possible Redemption
The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption
is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common
stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common
stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are
considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common
stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’
equity section of the Company’s condensed balance sheet.
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes” (“ASC 740”). Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized. The effective tax rate differs from the statutory tax rate of 21% for the three
months ended September 30, 2020 and for the period from February 11, 2020 (inception) through September 30, 2020, due to the valuation
allowance recorded on the Company’s net operating losses.
ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of
tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more
likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for
interest and penalties as of September 30, 2020. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by
major taxing authorities since inception.
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 shares of common stock outstanding during the
period, excluding shares of common stock subject to forfeiture. The Company applies the two-class method in calculating earnings
per share. Shares of common stock subject to possible redemption at September 30, 2020, which are not currently redeemable and
are not redeemable at fair value, have been excluded from the calculation of basic net loss per common share since such shares,
if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect
of warrants sold in the Initial Public Offering and the private placement to purchase 23,572,119 shares of common stock in the
calculation of diluted loss per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence
of future events. As a result, diluted net loss per common share is the same as basic net loss per common share for the period
presented.
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.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair
Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheet, primarily
due to their short-term nature.
Recent
Accounting Standards
Management
does not believe that any recently issued, but not yet effective, accounting standards update, if currently adopted, would have
a material effect on the Company’s condensed financial statements.
PROPERTY SOLUTIONS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE
3. INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 20,000,000 Units, at $10.00 per Unit. On July 31, 2020, in connection with the
underwriters’ partial exercise of their over-allotment option, the Company sold an additional 2,977,568 Units at a price
of $10.00 per Unit. Each Unit consists of one share of common stock and one warrant (“Public Warrant”). Each Public
Warrant entitles the holder to purchase one share common stock at a price of $11.50 per share, subject to adjustment (see Note
7).
NOTE
4. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor and EarlyBirdCapital purchased an aggregate of 535,000 Private Units
at a price of $10.00 per Private Unit, for an aggregate purchase price of $5,350,000. On July 31, 2020, in connection with the
underwriters’ partial exercise of their over-allotment option, the Company sold an additional 59,551 Private Units at a
price of $10.00 per Private Unit. The Sponsor purchased 483,420 Private Units and EarlyBirdCapital purchased 111,131 Private Units.
Each Private Unit consists of one share of common stock (“Private Share”) and one warrant (“Private Warrant”).
Each Private Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per full share, subject to
adjustment (see Note 7). The proceeds from the Private Units were added to the proceeds from the Initial Public Offering held
in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from
the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable
law).
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
On
February 11, 2020, the Sponsor purchased an aggregate of 5,750,000 shares of the Company’s common stock for an aggregate
price of $25,000 (the “Founder Shares”). The Founder Shares included an aggregate of up to 750,000 shares subject
to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so
that the Sponsor would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering
(assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares). As
a result of the underwriters’ election to partially exercise their over-allotment option on July 31, 2020 and the expiration
of the remaining over-allotment option, 5,608 Founder Shares were forfeited and 744,392 Founder’s Shares are no longer subject
to forfeiture, resulting in there being 5,744,392 Founder Shares issued and outstanding.
The
Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with
respect to 50% of the Founder Shares, the earlier of one year after the completion 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 any 30-trading day period commencing after a Business Combination
and (2) with respect to the remaining 50% of the Founder Shares, one year after the completion 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.
Advances — Related
Party
The
Sponsor advanced the Company an aggregate of $75,000 to cover expenses related to the Initial Public Offering. The advances were
non-interest bearing and due on demand. The outstanding advances of $75,000 were repaid upon the consummation of the Initial Public
Offering on July 24, 2020.
Promissory
Note — Related Party
On
February 14, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant
to which the Company may borrow up to an aggregate principal amount of $150,000. The Promissory Note was non-interest bearing
and payable on the earlier of (i) December 31, 2020, (ii) the consummation of the Initial Public Offering or (ii) the
date on which the Company determines not to proceed with the Initial Public Offering. The outstanding balance under the Promissory
Note of $133,000 was repaid upon the consummation of the Initial Public Offering on July 24, 2020.
Administrative
Services Agreement
The
Company entered into an agreement whereby, commencing on the July 21, 2020, through the earlier of the Company’s consummation
of a Business Combination and its liquidation, the Company will pay an affiliate of the Company’s executive officers a total
of $10,000 per month for office space and related services. For each of the three months ended September 30, 2020 and for the
period from February 11, 2020 (inception) through September 30, 2020, the Company incurred and paid $20,000 in fees for these
services.
PROPERTY SOLUTIONS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Related
Party Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, or certain of the Company’s
officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out
of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of
funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of
proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be
used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been
determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans
may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical
to the Private Units.
NOTE
6. COMMITMENTS
Registration
Rights
Pursuant
to a registration rights agreement entered into on July 21, 2020, the holders of the Founder Shares and Representative Shares,
as well as the holders of the Private Units and any units that may be issued in payment of Working Capital Loans made to Company,
will be 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 Founder Shares can elect to exercise these registration
rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow.
The holders of a majority of the Representative Shares, Private Units and units issued in payment of Working Capital Loans (or
underlying securities) can elect to exercise these registration rights at any time after the Company consummates a business combination.
Notwithstanding anything to the contrary, EarlyBirdCapital may only make a demand on one occasion and only during the five-year
period beginning on the effective date of the Initial Public Offering. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination; provided,
however, that EarlyBirdCapital may participate in a “piggy-back” registration only during the seven-year period beginning
on the effective date of the Initial Public Offering. The Company will bear the expenses incurred in connection with the filing
of any such registration statements.
Business
Combination Marketing Agreement
The
Company has engaged EarlyBirdCapital as an advisor in connection with a Business Combination to assist the Company in holding
meetings with its shareholders to discuss the potential Business Combination and the target business’ attributes, introduce
the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business
Combination, assist the Company in obtaining shareholder approval for the Business Combination and assist the Company with its
press releases and public filings in connection with the Business Combination. The Company will pay EarlyBirdCapital a cash fee
for such services upon the consummation of a Business Combination in an amount equal to 3.5% of the gross proceeds of Initial
Public Offering, or $8,042,149 (exclusive of any applicable finders’ fees which might become payable); provided that up
to 33% of the fee may be allocated at the Company’s sole discretion to other third parties who are investment banks or financial
advisory firms not participating in this offering that assist the Company in identifying and consummating a Business Combination.
NOTE
7. STOCKHOLDER’S 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 designations, voting and other rights and preferences as may be determined from time to time by the Company’s
board of directors. At September 30, 2020, there were no shares of preferred stock issued or outstanding.
Common
Stock — The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share.
At September 30, 2020, there were 6,963,811 shares of common stock issued and outstanding, excluding 22,552,700 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.
PROPERTY SOLUTIONS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Once
the warrants become exercisable, the Company may redeem the Public Warrants:
●
|
in
whole and not in part;
|
|
|
●
|
at
a price of $0.01 per warrant;
|
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder;
|
|
|
●
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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 such
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.
In
addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes
in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share
of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of
directors, and in the case of any such issuance to the Sponsor 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
we issue the additional shares of common stock or equity-linked securities.
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 above, 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.
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 common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable
or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally,
the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers
or their permitted transferees. If the Private 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.
Representative
Shares
On
February 11, 2020, the Company issued to the designees of EarlyBirdCapital 200,000 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 $820 based
upon the price of the Founder Shares issued to the Sponsor. The holders of the Representative Shares have agreed not to transfer,
assign or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to
waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the
completion of a Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with
respect to such shares if the Company fails to complete a Business Combination within the Combination Period.
The
Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days
immediately following the effective date of the registration statement related to the Initial Public Offering pursuant to Rule 5110(g)(1)
of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging,
short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person
for a period of 180 days immediately following the effective date of the registration statements related to the Initial Public
Offering, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following
the effective date of the registration statements related to the Initial Public Offering except to any underwriter and selected
dealer participating in the Initial Public Offering and their bona fide officers or partners.
PROPERTY SOLUTIONS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE
8. FAIR VALUE MEASUREMENTS
The
Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value
at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company
would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an
orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets
and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and
to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable
inputs used in order to value the assets and liabilities:
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Level 1:
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Quoted
prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which
transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing
basis.
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Level 2:
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Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or
liabilities and quoted prices for identical assets or liabilities in markets that are not active.
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Level 3:
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Unobservable
inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
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The
following table presents information about the Company’s assets that are measured at fair value on a recurring basis at
September 30, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair
value:
Description
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Level
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September 30, 2020
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Assets:
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Marketable securities held in Trust Account
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1
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$
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229,815,512
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NOTE
9. SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the 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.