NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
1 — Description of Organization, Business Operations and Going Concern
SCVX
Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on November 15, 2019. The Company was formed
for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated
with emerging growth companies.
As
of March 31, 2021, the Company had not commenced any operations. All activity for the period from November 15, 2019 (inception)
through March 31, 2021 relates to the Company’s formation and the Initial Public Offering (as defined below), and, since the
closing of the Initial Public Offering, the search for and efforts toward completing an initial Business Combination. The Company
will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The
Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds
derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
On
January 28, 2020, the Company consummated an initial public offering (the “Initial Public Offering”) of 23,000,000 units (the
“Units” and, with respect to the Class A ordinary shares included in the Units, the “Public Shares”), including
the issuance of 3,000,000 Units as a result of the underwriters’ exercise of their over-allotment option in full, at $10.00
per Unit, generating gross proceeds of $230.0 million, and incurring offering costs of approximately $13.3 million, inclusive
of $8.1 million in deferred underwriting commissions (Note 5). The Company’s sponsor is SCVX USA LLC, a Delaware limited
liability company (the “Sponsor”). The registration statement for the Initial Public Offering was declared effective
on January 23, 2020.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 6,600,000
warrants (the “Private Placement Warrants”) to the Sponsor at a purchase price of $1.00 per Private Placement Warrant, generating
gross proceeds to the Company of $6.6 million, and incurring offering costs of approximately $21,000 (Note 4).
Upon
the closing of the Initial Public Offering and the Private Placement, $230.0 million ($10.00 per Unit) of the net proceeds of the
Initial Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (the “Trust Account”),located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and was invested only in U.S. government
securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act (as defined below), with a maturity of 185 days
or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the
conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until
the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets
held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at
the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act of 1940, as amended (the “Investment Company Act”).
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Company will provide its holders (the “Public Shareholders”) of its Class A ordinary shares, par value $0.0001, sold in the
Initial Public Offering (the “Public Shares”), with the opportunity to redeem all or a portion of their Public Shares upon
the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their
Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share). The
per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting
commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares are classified as temporary equity
in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)
Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if
the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority of the shares
voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to
hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles
of Association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the
tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior
to completing a Business Combination. If, however, shareholder approval of the transactions is required by law, or the Company decides
to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation
pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their
Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in
connection with a Business Combination, the initial shareholders (as defined below) have agreed to vote their Founder Shares (as defined
below in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. Subsequent
to the consummation of the Initial Public Offering, the Company adopted an insider trading policy which requires insiders to: (i) refrain
from purchasing shares during certain blackout periods and when they are in possession of any material non-public information and
(ii) to clear all trades with the Company’s Chief Financial Officer (or his or her designee) prior to execution. In addition, the
initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection
with the completion of a Business Combination.
Notwithstanding
the foregoing, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any
affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined
under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is restricted from redeeming its
shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without
the prior consent of the Company.
The
Company’s Sponsor, officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the
Amended and Restated Memorandum and Articles of Association (a) that would modify the substance or timing of the Company’s obligation
to redeem 100% of its Public Shares if the Company does not complete a Business Combination within 24 months from the closing of
the Initial Public Offering, or January 28, 2022 (the “Combination Period”) or (b) with respect to any other provision relating
to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Shareholders
with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If
the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except
for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
(less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number
of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including
the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve,
subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors
and the requirements of other applicable law.
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination
within the Combination Period. However, if the Sponsor or members of the Company’s management team acquire Public Shares in or
after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public
Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their
rights to their deferred underwriting commission (Note 5) held in the Trust Account in the event the Company does not complete a Business
Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account
that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per-share
value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially
held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company
if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with
which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability
will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in
or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public
Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible
to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will have
to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses
or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim
of any kind in or to monies held in the Trust Account.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Going
Concern
As
of March 31, 2021, the Company had approximately $767,000 in its operating bank accounts and working capital deficit of approximately
$768,000.
Prior
to the completion of the Initial Public Offering and Private Placement, the Company’s liquidity needs were satisfied through a
capital contribution of $25,000 from the Sponsor in exchange for the issuance of the Founder Shares, and a borrowing of approximately
$139,000 under the Note (as defined below) issued to the Sponsor. The Company fully repaid the Note to the Sponsor on January 28, 2020.
Subsequent to the consummation of the Initial Public Offering and Private Placement, the Company’s liquidity needs have been satisfied
through the proceeds from the consummation of the Private Placement not held in the Trust Account. In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers
and directors, may, but are not obligated to, provide the Company with Working Capital Loans (as defined below in Note 4). The Working
Capital Loans will either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion,
up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price
of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
In
connection with the Company’s assessment of going concern considerations in accordance with FASB ASC 205-40, “Basis of Presentation
– Going Concern,” management has determined that the working capital deficit raises substantial doubt about the Company’s
ability to continue as a going concern until the earlier of the consummation of the Business Combination or the date the Company is required
to liquidate, January 28, 2022. The unaudited condensed financial statements do not include any adjustment that might be necessary if
the Company is unable to continue as a going concern.
Proposed Business Combination
On May 15, 2021, the Company
entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger
Agreement”), by and among the Company, Bloom Merger Sub Inc., a Delaware corporation and a wholly owned direct subsidiary of the
Company (“Merger Sub”), and Bright Machines, Inc., a Delaware corporation (“Bright Machines”).
The Merger
Agreement provides for, among other things, the following transactions: (i) at least one day prior to the Effective Time (as defined in
the Merger Agreement), the Company will become a Delaware corporation (the “Redomicile”), (ii) immediately prior to the Effective
Time, each outstanding share of preferred stock of Bright Machines will automatically convert into a share of common stock of Bright Machines,
par value $0.0001 per share (“Bright Machines Common Stock”), at the then-effective conversion rate as calculated pursuant
to the terms of the governing documents of Bright Machines (the “Preferred Stock Conversion”), (iii) at the Effective Time,
Merger Sub will merge with and into Bright Machines, with Bright Machines as the surviving company in the merger and, after giving effect
to such merger, continuing as a wholly owned subsidiary of the Company (the “Merger”), with Bright Machines having the option
to elect to cause the parties to restructure the transactions to add a second merger to take place immediately after the Effective Time
whereby Bright Machines, as the surviving company in the Merger, would merge with and into the Company or a new limited liability company
that is a wholly owned subsidiary of the Company and (iv) at the Effective Time, the Company’s name will be changed to “Bright
Machines, Inc.” The Redomicile, the Merger and the other transactions contemplated by the Merger Agreement are hereinafter referred
to as the “Business Combination”.
The Business
Combination is expected to close in the second half of 2021, following the receipt of the required approval by the Company’s shareholders
and the fulfillment of other customary closing conditions. The Company will apply to list the securities of the combined company on Nasdaq
effective as of no later than the Effective Time of the Merger.
In accordance with the terms
and subject to the conditions of the Merger Agreement, each share of Bright Machines Common Stock, following the Preferred Stock Conversion
and other than any Cancelled Shares (as defined in the Merger Agreement) and Dissenting Shares (as defined in the Merger Agreement) shall
be converted into the right to receive a number of shares of duly authorized, validly issued, fully paid and nonassessable common stock,
par value $0.0001 per share, of the Company (“Company Common Stock”) at an exchange ratio determined in accordance with the
Merger Agreement based on a pre-money enterprise value of Bright Machines of $1.1 billion and $10.00 price per share of Company Common
Stock. In addition, in the event that the closing sale price of Company Common Stock exceeds certain price thresholds for 20 out of any
30 consecutive trading days during the first five years following the closing of the Business Combination (the “Closing”),
up to an additional 23,000,000 shares of Company Common Stock may be issued to the parties that were holders of Bright Machines Common
Stock immediately prior to the Effective Time of the Merger.
Concurrently
with the execution of the Merger Agreement, the Company entered into subscription agreements (the “Subscription Agreements”)
with certain investors (the “PIPE Investors”). Pursuant to the Subscription Agreements, the PIPE Investors agreed to subscribe
for and purchase, and the Company agreed to issue and sell to such investors, an aggregate of 20,500,000 shares of Class A ordinary shares
of the Company for a purchase price of $10.00 per share, for aggregate gross proceeds of $205,000,000 (the “PIPE Financing”).
The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
2 — Basis of Presentation and Summary of Significant Accounting Policies
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, 2021 are not necessarily indicative of the results that may be expected through December 31,
2021.
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/A filed with the SEC on July 13, 2021.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with
the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has
elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different
application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard
at the time private companies adopt the new or revised standard.
This
may make comparison of the Company’s unaudited condensed financial statements with another public company that is neither an emerging
growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited
condensed 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 unaudited condensed financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Actual results could differ from those estimates.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts
and management believes the Company is not exposed to significant risks on such accounts.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. There
were no cash equivalents at March 31, 2021 and December 31, 2020 within the operating cash account. The entire balance of investments
held in Trust Account as of March 31, 2021 and December 31, 2020 are comprised of cash equivalents.
Investments
Held in the Trust Account
The
Company’s portfolio of investments held in the Trust Account is comprised of U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that
invest in U.S. government securities, or a combination thereof. The Company’s investments held in the Trust Account are classified
as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains
and losses resulting from the change in fair value of these securities is included in net gain from investments held in Trust Account
in the accompanying statements of operations. The estimated fair values of investments held in the Trust Account are determined using
available market information.
Financial
Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements
and Disclosures,” approximates the carrying amounts represented in the balance sheets.
As
of March 31, 2021 and December 31, 2020, the carrying values of cash, accounts payable, accrued expenses and accrued expenses –
related party approximate their fair values due to the short-term nature of the instruments. The Company’s portfolio of marketable
securities held in the Trust Account is comprised of investments in money market funds that invest in U.S. government securities.
Offering
Costs Associated with the Initial Public Offering
The
Company complies with the requirements of the FASB ASC Topic 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses
of Offering.” Offering costs consist of costs incurred in connection with the formation and preparation for the Initial Public
Offering. These costs, together with the underwriting discount, were charged to additional paid-in capital upon the completion of the
Initial Public Offering. Offering costs associated with warrant liabilities are expensed as incurred, presented as non-operating expenses
in the statements of operations. Offering costs associated with the Class A ordinary shares were charged to stockholders’
equity upon the completion of the Initial Public Offering.
Class A
Ordinary Shares Subject to Possible Redemption
Class A
ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally
redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within
the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control)
are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The
Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s
control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption
at the redemption amount are presented at redemption value as temporary equity, outside of the shareholders’ equity section of
the Company’s balance sheets.
Net
Income (Loss) per Ordinary Share
Net
income (loss) per share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period.
The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate
of 18,100,000 shares of Class A ordinary share in the calculation of diluted loss per ordinary share, since the exercise of the warrants
are contingent upon the occurrence of future events. As a result, diluted net loss per ordinary share is the same as basic net loss per
ordinary share for the periods presented.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Company’s statements of operations include a presentation of income (loss) per share for ordinary share subject to possible redemption
in a manner similar to the two-class method of income (loss) per share. Net income (loss) per ordinary share, basic and diluted, for
Class A ordinary share subject to possible redemption is calculated by dividing the proportionate share of net gain from investments
held in Trust Account, by the weighted average number of Class A ordinary share subject to possible redemption outstanding since original
issuance.
Net
income (loss) per share, basic and diluted, for non-redeemable ordinary share is calculated by dividing the net income (loss), adjusted
for income or loss on marketable securities attributable to Class A ordinary share subject to possible redemption, by the weighted average
number of non-redeemable ordinary share outstanding for the period.
Non-redeemable
ordinary share includes Class B ordinary shares and non-redeemable shares of Class A ordinary shares. Non-redeemable ordinary share participates
in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.
The
following table reflects the calculation of basic and diluted net income (loss) per ordinary share:
|
|
|
For the Three Months Ended
|
|
|
|
|
March 31, 2021
|
|
|
March 31, 2020
|
|
|
Class A ordinary shares subject to possible redemption
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net gain from investments held in Trust Account
|
|
$
|
2,940
|
|
|
$
|
259,812
|
|
|
Net income attributable to Class A ordinary shares subject to possible redemption
|
|
$
|
2,940
|
|
|
$
|
259,812
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Class A ordinary shares subject to possible redemption, basic and diluted
|
|
|
18,619,107
|
|
|
|
19,715,037
|
|
|
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
|
|
$
|
0.00
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-redeemable ordinary shares
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
12,516,724
|
|
|
$
|
12,022,204
|
|
|
Less: Net income attributable to Class A ordinary shares subject to possible redemption
|
|
|
(2,940
|
)
|
|
|
(259,812
|
)
|
|
Net income (loss) attributable to non-redeemable ordinary shares
|
|
$
|
12,513,784
|
|
|
$
|
11,762,392
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of non-redeemable ordinary shares, basic and diluted
|
|
|
10,130,893
|
|
|
|
7,837,776
|
|
|
Basic and diluted net income per share, non-redeemable ordinary shares
|
|
$
|
1.24
|
|
|
$
|
1.50
|
|
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 March 31, 2021 and December
31, 2020. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the
payment of interest and penalties for the three months ended March 31, 2021 and 2020. The Company is currently not aware of any issues
under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income
tax examinations by major taxing authorities since inception.
The
Company is considered a Cayman Islands exempted company and is presently not subject to income taxes or income tax filing requirements
in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Share
Based Compensation
The
Company records non-cash compensation recognized as a result of the fair value of the Private Placement Warrants being in excess of the
amount paid by the Sponsor, pursuant to ASC 718, Share-based Compensation.
Derivative
Warrant Liabilities
The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments, including issued shares purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The
Company accounts for its 18,100,000 warrants issued in connection with its Initial Public Offering (11,500,000) and Private Placement
(6,600,000) as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments
as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement
at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statements of operations.
The fair value of warrants issued in connection with the Private Placement has been estimated using Monte-Carlo simulations at each balance
sheet date. The fair value of the warrants issued in connection with the Initial Public Offering was initially measured using a Monte-Carlo
simulation model and subsequently been measured at each measurement date based on the market price of such warrants.
Recent
Adopted Accounting Standards
In
August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and
Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s
Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required
under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the
derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06
on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Recent
Issued Accounting Standards
The
Company’s management does not believe that any recently issued, but not yet effective, accounting standards updates, if currently
adopted, would have a material effect on the accompanying financial statement.
Note
3 — Initial Public Offering
On
January 28, 2020, the Company sold 23,000,000 Units, including the issuance of 3,000,000 Units as a result of the underwriters’
exercise of their over-allotment option in full, at $10.00 per Unit in the Initial Public Offering. Each Unit consists of
one Class A ordinary share, and one-half of one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles
the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (Note 7).
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
4 — Related Party Transactions
Founder
Shares
In
November 2019, the Sponsor purchased 5,750,000 Class B ordinary shares, par value $0.0001 (the “Founder Shares”), for an
aggregate price of $25,000. In December 2019, the Sponsor transferred an aggregate of 1,092,500 Founder Shares to members of the Company’s
management team. The holders of the Founder Shares have agreed to forfeit up to an aggregate of 750,000 Founder Shares, on a pro rata
basis, to the extent that the over-allotment option was not exercised in full by the underwriters. On January 28, 2020, the over-allotment
option was exercised in full. Accordingly, no Founder Shares were forfeited.
The
initial shareholders agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier
to occur of: (1) one year after the completion of the initial Business Combination and (2) the date on which the Company consummates
a liquidation, merger, share exchange, reorganization, or other similar transaction after the initial Business Combination that results
in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Notwithstanding the foregoing, if the last reported sale price of the Company’s Class A ordinary shares equals or exceeds $12.00
per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the
like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination,
the Founder Shares will be released from the lock-up.
Private
Placement Warrants
Simultaneously
with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,600,000 Private Placement Warrants at a
price of $1.00 per Private Placement Warrant, generating gross proceeds of $6.6 million, and incurring offering costs of approximately
$21,000. Each whole Private Placement Warrant is exercisable for one whole Class A ordinary share at a price of $11.50 per share. Certain
proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If
the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless.
The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor
or its permitted transferees.
The
Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of
their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Related
Party Loans
On
November 19, 2019, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses pursuant to a promissory
note (the “Note”). This loan was non-interest bearing and payable upon the completion of the Initial Public Offering.
The Company borrowed approximately $139,000 under the Note and fully repaid this amount on January 28, 2020.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
or certain of the Company’s officers and directors, may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the
proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside
the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the
Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital
Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements
exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants
of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
As of March 31, 2021 and December 31, 2020, the Company had no borrowings under any Working Capital Loans.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Administrative
Support Agreement
Commencing
on the date that the Company’s securities were first listed on the New York Stock Exchange, the Company agreed to pay the Sponsor
a total of $10,000 per month for office space, administrative and support services. Upon completion of the Initial Business Combination
or the Company’s liquidation, the Company will cease paying these monthly fees. The Company incurred $30,000 and $0 in expenses
in connection with such services during the three months ended March 31, 2021 and 2020, respectively, as reflected in the accompanying
unaudited condensed statements of operations. As of March 31, 2021 and December 31, 2020, $150,000 and $120,000 in accrued expenses with
related party were outstanding, respectively, as reflected in the accompanying unaudited condensed balance sheets.
Note
5 — Commitments & Contingencies
Registration
Rights
The
holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any,
are entitled to registration rights pursuant to a registration rights agreement. These holders will be entitled to certain demand and
“piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any
registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period
for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the final prospectus relating to the Initial Public Offering to purchase up
to 3,000,000 additional Units to cover over-allotments at the Initial Public Offering price less the underwriting discounts and commissions.
The underwriters fully exercised their over-allotment option on January 28, 2020.
The
underwriters were entitled to an underwriting discount of $0.20 per unit, or $4.6 million in the aggregate, which was paid upon
the closing of the Initial Public Offering. In addition, $0.35 per unit, or $8.1 million in the aggregate, will be payable to the
underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in
the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Note
6 — Derivative Warrant Liabilities
Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units
and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company
has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public
Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on
a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon
as practicable, but in no event later than 15 business days, after the closing of a Business Combination, the Company will use its reasonable
best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares
issuable upon exercise of the Public Warrants. If the shares issuable upon exercise of the warrants are not registered under the Securities
Act, the Company will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable
for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants,
unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising
holder, or an exemption from registration is available. Notwithstanding the above, if the Company’s Class A ordinary shares are
at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered
security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who
exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the
event the Company elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will
use its reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In addition,
if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with
the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with
such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of
any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates,
as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent
more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the
date of the completion of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price
of the ordinary shares during the 20-trading day period starting on the trading day prior to the day on which the Company consummates
the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants
will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00
per share redemption trigger price described below will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market
Value and the Newly Issued Price.
The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that
the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable,
assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally,
the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’
permitted transferees. If the Private Placement Warrants are held by someone other than the initial shareholders or their permitted transferees,
the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The
Company may call the Public Warrants for redemption (except with respect to the Private Placement Warrants):
|
|
●
|
in whole and not in part;
|
|
|
●
|
at a price of $0.01 per
warrant;
|
|
|
●
|
upon a minimum of 30 days’
prior written notice of redemption; and
|
|
|
●
|
if, and only if, the last
reported closing price of the Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day
period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
|
If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the
Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. Additionally, in no event will the
Company be required to net cash settle any warrants. If the Company is unable to complete the initial Business Combination within the
Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds
with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account
with respect to such warrants. Accordingly, the warrants may expire worthless.
Note
7 — Shareholders’ Equity
Class
A Ordinary Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001
per share. As of March 31, 2021 and December 31, 2020, there were 23,000,000 Class A ordinary shares outstanding, including 19,856,873
and 18,605,200 Class A ordinary shares subject to possible redemption, respectively, that are classified as temporary equity in the accompanying
balance sheets.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Class
B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001
per share. As of March 31, 2021 and December 31, 2020, there were 5,750,000 Class B ordinary shares outstanding.
Class
A ordinary shareholders and Class B ordinary shareholders of record are entitled to one vote for each share held on all matters to be
voted on by shareholders and vote together as a single class, except as required by law; provided, that, prior to the Company’s
initial Business Combination, holders of the Class B ordinary shares will have the right to elect all of the Company’s directors
and remove members of the board of directors for any reason, and holders of the Class A ordinary shares will not be entitled to vote
on the election of directors during such time.
The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the Initial Business Combination on a
one-for-one basis, subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations
and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities,
are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of the initial
Business Combination, the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless
the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with
respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class
B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of all ordinary shares issued and outstanding
upon the completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed
issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be issued,
to any seller in the initial Business Combination.
Preferred
Shares — The Company is authorized to issue 1,000,000 preferred shares with such designations, voting and other rights
and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2021 and December 31,
2020, there were no preferred shares issued or outstanding.
Note
8 - Fair Value Measurements
The
Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each
reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would
have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company
seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable
inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is
used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and
liabilities:
|
|
●
|
Level 1: Quoted prices
in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions
for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
|
●
|
Level 2: Observable inputs
other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and
quoted prices for identical assets or liabilities in markets that are not active.
|
|
|
●
|
Level 3: Unobservable inputs
based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
|
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31,
2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair
value:
|
|
|
Fair Value Measured as of March 31, 2021
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - money market fund
|
|
$
|
230,552,253
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
230,552,253
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities - public warrants
|
|
$
|
11,500,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
11,500,000
|
|
|
Warrant liabilities - private warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,666,000
|
|
|
$
|
6,666,000
|
|
|
|
|
Fair Value Measured as of December 31, 2020
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - money market fund
|
|
$
|
230,548,847
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
230,548,847
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities - public warrants
|
|
$
|
19,550,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
19,550,000
|
|
|
Warrant liabilities - private warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
11,748,000
|
|
|
$
|
11,748,000
|
|
Transfers
to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. There were no transfers between levels for the three months
ended March 31, 2021.
The
fair value of warrants issued in connection with the Private Placement has been estimated using Monte-Carlo simulations at each balance
sheet date. The fair value of the warrants issued in connection with the Initial Public Offering was initially measured using a Monte-Carlo
simulation model at each measurement date and subsequently been measured based on the market price when separately listed and traded.
For the three months ended March 31, 2021, the Company recognized a charge to the statements of operations resulting from a decrease
in the fair value of liabilities of approximately $13.1 million presented as change in fair value of derivative warrant liabilities on
the accompanying statements of operations.
The
change in the fair value of the derivative warrant liabilities for the three months ended March 31, 2021 is summarized as follows:
|
Warrant liabilities at December 31, 2020
|
|
$
|
31,298,000
|
|
|
Change in fair value of warrant liabilibites
|
|
|
(13,132,000
|
)
|
|
Warrant liabilities at March 31, 2021
|
|
$
|
18,166,000
|
|
The
estimated fair value of the derivative warrant liabilities is determined using Level 3 inputs. Inherent in a Monte-Carlo simulation are
assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates
the volatility of its ordinary shares based on historical volatility of select peer companies that matches the expected remaining life
of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar
to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual
term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
SCVX
CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
following table provides quantitative information regarding Level 3 fair value measurements inputs as of March 31, 2021:
|
|
|
March 31,
2021
|
|
|
Exercise price
|
|
$
|
11.50
|
|
|
Stock Price
|
|
$
|
9.86
|
|
|
Term (in years)
|
|
|
5.33
|
|
|
Volatility
|
|
|
16.90
|
%
|
|
Risk-free interest rate
|
|
|
1.06
|
%
|
|
Dividend yield
|
|
|
-
|
|
Note
9 — Subsequent Events
Management
has evaluated subsequent events to determine if events or transactions occurring through the date the financial statements were issued
required potential adjustment to or disclosure in the financial statements and has concluded that all such events that would require
recognition or disclosure have been recognized or disclosed.