NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION,
BUSINESS OPERATIONS AND BASIS OF PRESENTATION
CC Neuberger Principal
Holdings I (the "Company") is a newly incorporated blank check company incorporated in the Cayman Islands on January 14,
2020. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination with one or more businesses that the Company has not yet identified ("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 in the financial, technology and business services sectors.
At March 31, 2020,
the Company had not yet commenced operations. All activity for the period from January 14, 2020 (inception) through March
31, 2020 relates to the Company's formation and the Initial Public Offering, which is described below. The Company has selected
December 31 as its fiscal year end.
The
Company’s sponsor is CC Neuberger Principal Holdings I Sponsor LLC, a Delaware limited liability company
(the "Sponsor"). The registration statement for the Company’s Initial
Public Offering was declared effective on April 23, 2020. On April 28, 2020, the Company consummated its Initial
Public Offering of 41,400,000 units (the “Units” and, with respect
to the Class A ordinary shares included in the Units being offered, the “Public Shares”), including 5,400,000 additional
Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $414.00 million,
and incurring offering costs of approximately $24.53 million, inclusive of $14.49 million in deferred underwriting commissions
and approximately $0.9 million in deferred legal fees (Note 6).
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”)
of 10,280,000 warrants (each, a “Private Placement Warrant”
and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private
placement to the Sponsor, generating gross proceeds of approximately $10.28 million (Note 4).
Upon
the closing of the Initial Public Offering and the Private Placement, $414.0 million ($10.00 per Unit) of the net proceeds
of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (the “Trust
Account”) and invested in United States "government securities" within the meaning of Section 2(a)(16)
of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, 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 its 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. The Company's initial Business Combination must be with one or more operating businesses or
assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding
the amount of any deferred underwriting discount held in trust and taxes payable on the income earned on the Trust Account) at
the time the Company signs a definitive agreement in connection with 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 1940, as amended, or the Investment Company Act.
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
The Company
will provide its public shareholders 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 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). 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 6). These Public Shares will be recorded at a redemption value and
classified as temporary equity upon the completion of the Initial Public Offering, in accordance with 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 the amended and restated memorandum and articles of association which will be adopted by the
Company upon the consummation of the Initial Public Offering (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 (the "SEC"), and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, a 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 holders of our Founder Shares prior to this Initial
Public Offering (the "Initial Shareholders") have agreed to vote their Founder Shares (as defined in Note 5)
and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. 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. In addition, the Company has agreed not to enter into a
definitive agreement regarding an initial Business Combination without the prior consent of the Sponsor.
Notwithstanding
the foregoing, the Company's Amended and Restated Memorandum and Articles of Association will provide 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")), will be 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, executive officers, directors and director nominees will have agreed not to propose an amendment to the Company's Amended
and Restated Memorandum and Articles of Association that would affect the substance or timing of the Company's obligation to provide
for the redemption of its Public Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the
Company does not complete a Business Combination, 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 24 months from the closing of the Initial Public Offering, or April 28,
2022 (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 10 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 net of taxes paid or 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 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 in all cases subject to the
other requirements of applicable law. The Company's Amended and Restated Memorandum and Articles of Association will provide that,
if the Company winds up for any other reason prior to the consummation of the initial Business Combination, the Company will follow
the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than
10 business days thereafter, subject to applicable Cayman Islands law.
In connection
with the redemption of 100% of the Company's outstanding Public Shares for a portion of the funds held in the Trust Account, each
holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds
held in the Trust Account and not previously released to the Company to pay the Company's taxes payable (less taxes payable and
up to $100,000 of interest to pay dissolution expenses).
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
The Initial Shareholders
have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination
within the Combination Period. However, if the Initial Shareholders should 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 (see Note 6) held in the Trust Account in the event the Company does not complete a Business
Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust
Account that will be available to fund the redemption of the Company's 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 that it will be liable to the Company if and to the extent any claims by a third party for services rendered
or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent,
confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to
below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account
as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust
assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business
who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable)
nor will it apply 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"). In the event
that an executed waiver is deemed to be unenforceable against a third party, our 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 our Sponsor will have to indemnify
the Trust Account due to claims of creditors by endeavoring to have vendors, service providers (except the Company's independent
registered public accounting firm), 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 March
31, 2020, the Company had no cash and working capital deficit of approximately $567,000.
The
Company’s liquidity needs up to March 31, 2020 were satisfied through payment of $25,000 for offering costs made by the
Sponsor on behalf of the Company in exchange for the issuance of the Founder Shares to the Sponsor, and the advancement of
funds by the Sponsor of approximately $54,000 to the Company to cover for offering costs in connection with the Initial
Public Offering. Subsequent to March 31, 2020, the Company’s liquidity has been satisfied through additional loans from
the Sponsor, for a total outstanding amount of approximately $125,000 under the Note, and the proceeds from the consummation
of the Private Placement not held in the Trust Account of approximately $2.0 million. On May 29, 2020, the Company repaid the
Note to the Sponsor in full. 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 Working Capital Loans (see Note 5). To date, there were no amounts outstanding under any
Working Capital Loan.
Based on the foregoing, management determined
that the Company has sufficient liquidity to meet its anticipated obligations until the earlier of the consummation of the initial
Business Combination or liquidation.
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
months ended March 31, 2020 are not necessarily indicative of the results that may be expected through December 31, 2020.
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
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 May 4, 2020 and April 27, 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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, 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 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.
NOTE 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Use
of estimates
The preparation of financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.
Making estimates
requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could
differ significantly from those estimates.
Concentration
of credit risk
Financial instruments
that potentially subject the Company to concentration 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. At March 31, 2020, the Company had not experienced losses
on this account and management believes the Company is not exposed to significant risks on such account.
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 balance sheet.
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
Deferred
Offering Costs Associated with the Initial Public Offering
Deferred offering
costs consisted of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly
related to the Initial Public Offering and that were charged to shareholders’ equity upon the completion of the Initial Public
Offering in April 2020.
Net
loss per ordinary share
The Company complies
with accounting and disclosure requirements of ASC Topic 260, "Earnings Per Share." Net loss per share is computed by
dividing net loss by the weighted average number of ordinary shares outstanding during the period. At March 31, 2020, the Company
did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares
and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the
periods presented.
Income
taxes
The Company complies
with the accounting and reporting requirements of ASC Topic 740, "Income Taxes," which requires an asset and liability
approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts,
based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 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'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. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 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.
There is currently
no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman federal income tax regulations,
income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company's financial statements.
The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next
twelve months.
Recent
Accounting Pronouncements
Management does
not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material
effect on the Company's financial statements.
NOTE 3. INITIAL
PUBLIC OFFERING
On
April 28, 2020, the Company sold 41,400,000 Units, including 5,400,000 Over-Allotment
Units, at $10.00 per Unit, generating gross proceeds of $414.00 million, and incurring offering costs of approximately
$24.53 million, inclusive of $14.49 million in deferred underwriting commissions and approximately $0.9 million in deferred
legal fees.
Each Unit will
consist of one Class A ordinary share and one-third of one redeemable warrant ("Public Warrant"). Each whole Public
Warrant will entitle the holder to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to
adjustment (see Note 7).
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
NOTE 4. PRIVATE
PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of 10,280,000 Private
Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds
of approximately $10.28 million.
Each Private Placement
Warrant is exercisable to purchase one Class A ordinary share at $11.50 per share. Certain proceeds of the proceeds from the
Private Placement Warrants was 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.
NOTE 5. RELATED
PARTY TRANSACTIONS
Founder
Shares
On January 16,
2020, the Company issued 2,875,000 Class B ordinary shares to the Sponsor (the "Founder Shares") in exchange for
a payment of $25,000 for offering costs made by the Sponsor
on behalf of the Company. On March 6, 2020, the Company effected a share capitalization resulting in the Sponsor
holding an aggregate of 13,625,000 founder shares. On March 6, 2020, the Sponsor transferred 50,000 Founder Shares to each
of Keith W. Abell and Eva F. Huston, the Company's independent director nominees. On April 23, 2020, the Company
effected a share capitalization resulting in an aggregate of 15,350,000 Founder Shares issued and outstanding. The Sponsor currently
owns an aggregate of 15,250,000 Class B ordinary shares and the independent directors, collectively, currently own an aggregate
of 100,000 Class B ordinary shares. All shares and the associated amounts have been retroactively restated to reflect the
aforementioned share capitalization. The holders of the Founder Shares have agreed to forfeit up to an aggregate of 1,350,000 Founder
Shares, on a pro rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters.
The forfeiture will be adjusted to the extent that the option to purchase additional units is 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
plus the number of Class A ordinary shares to be sold pursuant to the Forward Purchase Agreement (as defined below). If the
Company increases or decreases the size of the Initial Public Offering, the Company will effect a share capitalization or a share
repurchase or redemption or other appropriate mechanism, as applicable, with respect to the Class B ordinary shares prior
to the consummation of the Initial Public Offering in such amount as to maintain the number of Founder Shares at 20% of the Company's
issued and outstanding ordinary shares upon the consummation of the Initial Public Offering plus the number of Class A ordinary
shares to be sold pursuant to the Forward Purchase Agreement. On April 24, 2020,
the underwriters exercised their over-allotment option; thus, the Founder Shares were no longer subject to forfeiture.
The Initial Shareholders
have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after
the completion of the initial Business Combination or (ii) the date on which the Company completes a liquidation, merger,
share exchange or other similar transaction after the initial Business Combination that results in all of the shareholders having
the right to exchange their Class A ordinary shares for cash, securities or other property. Any permitted transferees will
be subject to the same restrictions and other agreements of the Initial Shareholders with respect to any Founder Shares. Notwithstanding
the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share
splits, share capitalizations, 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.
Related
Party Loans
On January 16,
2020, the Sponsor agreed to loan the Company up to $300,000 to be used for the payment of costs related to the Initial Public
Offering pursuant to a promissory note (the "Note"). The Note is non-interest bearing, unsecured and due upon the closing
of the Initial Public Offering. As of March 31, 2020, the Company borrowed approximately $54,000 under the Note. Subsequent to
March 31, 2020, the Company borrowed additional amount from the Sponsor, for a total outstanding amount of approximately $125,000
under the Note. On May 29, 2020, the Company repaid the Note to the Sponsor in full.
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
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 $2.5 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. To date, the Company has no borrowings under the Working Capital Loans.
Forward
Purchase Agreement
In connection
with the consummation of the Initial Public Offering, the Company entered into a forward purchase agreement (the "Forward
Purchase Agreement") with Neuberger Berman Opportunistic Capital Solutions Master Fund LP ("NBOKS"), a member of
the Sponsor, which provides for the purchase of up to $200,000,000 of units, with each unit consisting of one Class A ordinary
share (the "Forward Purchase Shares") and one-fourth of one warrant to purchase one Class A ordinary share at $11.50
per share (the "Forward Purchase Warrants"), for a purchase price of $10.00 per unit, in a private placement to occur
concurrently with the closing of the initial Business Combination. The Forward Purchase Agreement allows NBOKS to be excused from
its purchase obligation in connection with a specific business combination if NBOKS does not have sufficient committed capital
allocated to the Forward Purchase Agreement to fulfill its funding obligations under such Forward Purchase Agreement in respect
of such business combination. Prior to an initial Business Combination, NBOKS intends to raise additional committed capital such
that the condition described in the preceding sentence is met, but there can be no assurance that additional capital will be available.
The obligations under the Forward Purchase Agreement do not depend on whether any Class A ordinary shares are redeemed by
the public shareholders. The Forward Purchase Shares and Forward Purchase Warrants will be issued only in connection with the closing
of the initial Business Combination. The proceeds from the sale of Forward Purchase Shares may be used as part of the consideration
to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination or for working
capital in the post-transaction company.
NOTE 6. COMMITMENTS &
CONTINGENCIES
Registration
and Shareholder Rights
The holders of
the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any
Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon
conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and shareholder rights
agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company
register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration
statements filed subsequent to the completion of the initial Business Combination. However, the registration and shareholder 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. The Company will bear the expenses incurred in connection with the filing of
any such registration statements.
Pursuant to
the Forward Purchase Agreement, the Company has agreed to use its reasonable best efforts (i) to file within 30 days
after the closing of a Business Combination a registration statement with the SEC for a secondary offering of the Forward
Purchase Shares and the Forward Purchase Warrants (and underlying Class A ordinary shares), (ii) to cause such
registration statement to be declared effective promptly thereafter but in no event later than sixty (60) days after the
initial filing, (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the
date on which NBOKS or its assignees cease to hold the securities covered thereby and (B) the date all of the securities
covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and
(iv) after such registration statement is declared effective, cause us to conduct firm commitment underwritten
offerings, subject to certain limitations. In addition, the Forward Purchase Agreement provides that these holders will have
certain "piggy-back" registration rights to include their securities in other registration statements filed by the
Company.
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
Underwriting
Agreement
The Company granted
the underwriters a 45-day option from the date of the final prospectus to purchase up to 5,400,000 additional Units at the Initial
Public Offering price less the underwriting discounts and commissions. On April 24,
2020, the underwriters fully exercised their over-allotment option.
The underwriters
were entitled to an underwriting discount of $0.20 per unit, or $8.28 million, paid upon the closing of the Initial Public Offering.
In addition, the underwriters will be entitled to a deferred underwriting commission of $0.35 per unit, or $14.49 million. 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.
Deferred Legal Fees
The Company obtained legal advisory services
from two legal counsel firms in connection with the Initial Public Offering and agreed to pay their fees upon the consummation
of the initial Business Combination. As of March 31, 2020, the Company recorded approximately $758,000 in deferred legal fees in
connection with such agreements in the accompanying balance sheet.
Risks and Uncertainties
Management
is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible
that the virus could have a negative effect on the Company’s financial position,
results of its operations and/or search for a target company, the specific impact
is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
NOTE 7. SHAREHOLDERS’
EQUITY
Class A
Ordinary Shares—The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001
per share. Holders of the Company's Class A ordinary shares are entitled to one vote for each share. At
March 31, 2020, there were no Class A ordinary shares issued or outstanding.
Class B
Ordinary Shares—The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001
per share. On January 16, 2020, 2,875,000 Class B ordinary shares were issued and outstanding. On March 6, 2020,
the Company effected a share capitalization resulting in an aggregate of 13,625,000 Class B ordinary shares issued and outstanding.
On April 23, 2020, the Company effected a share capitalization resulting in an aggregate of 15,350,000 of Class B ordinary
shares issued and outstanding. All shares and the associated amounts have been retroactively restated to reflect the aforementioned
share capitalization in the accompanying financial statements.
Holders of
the Company's Class B ordinary shares are entitled to one vote for each share. The Class B ordinary shares and will
automatically convert into Class A ordinary shares on the first business day following the consummation of the initial
Business Combination, or earlier at the option of the holder thereof, on a one-for-one basis. However, if additional
Class A ordinary shares or any other equity-linked securities are issued or deemed issued in connection with the initial
Business Combination, the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal,
in the aggregate, 20% of the sum of (i) the total number of ordinary shares outstanding upon completion of the Initial
Public Offering plus (ii) the total number of Class A ordinary shares issued, or deemed issued or issuable upon
conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with
or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or
equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any
seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor upon conversion of
Working Capital Loans, provided that such conversion of Class B ordinary shares will never occur on a less than
one-for-one basis. Any conversion of Class B ordinary shares described herein will take effect as a redemption of
Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law.
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
Preference
Shares—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share. As
of March 31, 2020, there were no preference
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 and such shares are registered, qualified or exempt from registration under the securities, or blue sky,
laws of the state of residence of the holder (or the Company permit holders to exercise their warrants on a cashless basis
under certain circumstances). The Company has agreed that as soon as practicable, but in no event later than 20 business days
after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the
SEC and have an effective registration statement covering the Class A ordinary shares issuable upon exercise of the
warrants and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are
redeemed, as specified in the warrant agreement. If a registration statement covering the Class A ordinary shares
issuable upon exercise of the warrants is not effective by the 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. Notwithstanding the
above, if the 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" and, in the event the Company so elects, the Company will not be required to file or maintain in
effect a registration statement, and in the event the Company does not so elect, it will use commercially reasonable 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.
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 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 and the Forward Purchase Warrants for redemption:
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon a minimum of 30 days' prior written notice of redemption; and
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if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) 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.
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If the Company
calls the Public Warrants for redemption as described above, 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.
CC NEUBERGER PRINCIPAL HOLDINGS I
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
Commencing 90
days after the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants and Forward Purchase
Warrants:
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in whole and not in part;
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at $0.10 per warrant upon a minimum of 30 days' prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the agreed table, based on the redemption date and the "fair market value" of the Class A ordinary shares;
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upon a minimum of 30 days' prior written notice of redemption; and
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if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $10.00 per share (as adjusted per share splits, share dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
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The "fair
market value" of the Class A ordinary shares shall mean the average last reported sale price of the Class A ordinary
shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the
holders of warrants.
The exercise price
and number of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including
in the event of a share capitalization, or recapitalization, reorganization, merger or consolidation. However, the warrants will
not be adjusted for issuance of Class A ordinary shares at a price below its exercise price. 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 8. SUBSEQUENT
EVENTS
The Company evaluated subsequent events
and transactions that occurred after the balance sheet date up to the date financial statements were available to be issued. Based
upon this review, the Company did not identify any additional subsequent events that would have required adjustment or disclosure
in the financial statements which have not previously been disclosed within the financial statements.