The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our unaudited financial
statements and the notes related thereto which are included in "Item 1.
Financial Statements" of this Quarterly Report on Form 10Q.
Cautionary note regarding forward-looking statements
All statements other than statements of historical fact included in this
Quarterly Report on Form 10Q including, without limitation, statements under
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the Company's financial position, business strategy and
the plans and objectives of management for future operations, are
forward-looking statements. When used in this Quarterly Report on Form 10Q,
words such as "anticipate," "believe," "estimate," "expect," "intend" and
similar expressions, as they relate to us or the Company's management, identify
forward-looking statements. Such forward-looking statements are based on the
beliefs of management, as well as assumptions made by, and information currently
available to, the Company's management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors detailed in our filings with the SEC. All subsequent written or oral
forward-looking statements attributable to us or persons acting on the Company's
behalf are qualified in their entirety by this paragraph.
Overview
We are a blank check company incorporated on June 12, 2019 as a Delaware
corporation and formed for the purpose of effecting a Business Combination with
one or more target businesses. We completed our Public Offering on January 28,
2020. As of June 30, 2020, we had not identified any business combination target
nor initiated any substantive discussions directly or indirectly, with respect
to identifying any business combination target.
We presently have no revenue, have had losses since inception from incurring
formation costs and have had no operations other than the active solicitation of
a target business with which to complete a business combination. We have relied
upon the sale of our securities and loans from our officers and directors to
fund our operations.
Since completing our Public Offering, we have reviewed, and continue to review,
a number of opportunities to enter into a Business Combination with an operating
business, but we are not able to determine at this time whether we will complete
a Business Combination with any of the target businesses that we have reviewed
or with any other target business. We intend to effectuate our Business
Combination using cash from the proceeds of our Public Offering and the sale of
the Private Placement Warrants, our capital stock, debt, or a combination of
cash, stock and debt.
Results of Operations
For the six months ended June 30, 2020, we had net income of $468,268. Our
business activities during the quarter mainly consisted of identifying and
evaluating prospective acquisition candidates for a Business Combination. We
believe that we have sufficient funds available to complete our efforts to
effect a Business Combination with an operating business by January 28, 2022.
However, if our estimates of the costs of identifying a target business,
undertaking in-depth due diligence and negotiating a Business Combination are
less than the actual amount necessary to do so, we may have insufficient funds
available to operate our business prior to our Business Combination.
As indicated in the accompanying unaudited financial statements, at June 30,
2020, we had $541,719 in cash and deferred offering costs of $14,875,000.
Further, we expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete our Business
Combination will be successful.
Liquidity and Capital Resources
On July 16, 2019, our Sponsor purchased an aggregate of 11,500,000 Founder
Shares for an aggregate purchase price of $25,000, or approximately $0.002 per
share. Subsequently, our Sponsor transferred an aggregate
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of 75,000 Founder Shares to our independent directors. On March 9, 2020,
following the expiration of the unexercised portion of the underwriter's
over-allotment option, our Sponsor forfeited 875,000 Founder Shares so that the
remaining Founder Shares held by our Initial Stockholders represented 20.0% of
the outstanding shares upon completion of our Public Offering.
On January 28, 2020, we consummated our Public Offering of 42,500,000 Units at a
price of $10.00 per Unit, including 2,500,000 Units as a result of the
underwriter's partial exercise of its over-allotment option, generating gross
proceeds of $425,000,000. On the IPO Closing Date, we completed the private sale
of an aggregate of 5,250,000 Private Placement Warrants, each exercisable to
purchase one share of Common Stock at $11.50 per share, to our Sponsor, at a
price of $2.00 per Private Placement Warrant, generating gross proceeds, before
expenses, of $10,500,000. After deducting the underwriting discounts and
commissions (excluding the Deferred Discount, which amount will be payable upon
consummation of the Business Combination, if consummated) and the estimated
offering expenses, the total net proceeds from our Public Offering and the sale
of the Private Placement Warrants were $426,055,000, of which $425,000,000 (or
$10.00 per share sold in the Public Offering) was placed in the Trust Account.
The amount of proceeds not deposited in the Trust Account was $1,055,000 at the
closing of our Public Offering. Interest earned on the funds held in the Trust
Account may be released to us to fund our Regulatory Withdrawals, subject to an
annual limit of $1,100,000, for a maximum of 24 months and/or additional amounts
necessary to pay our franchise and income taxes.
On July 16, 2019, the Sponsor agreed to loan the Company an aggregate of
$300,000 by the issuance of an unsecured promissory note (the "Note") issued by
the Company in favor of the Sponsor to cover organizational expenses related to
the Proposed Offering. On July 16, 2019, the Company borrowed $150,000 against
the Note, and on January 25, 2019, the Company borrowed an additional $150,000.
This Note was non-interest bearing and payable on the earlier of June 30, 2020
or the completion of the Public Offering. These Notes were repaid in full upon
the completion of the Public Offering.
As of June 30, 2020 and December 31, 2019, we had cash held outside of the Trust
Account of approximately $541,719 and $1,120, respectively, which is available
to fund our working capital requirements. Additionally, interest earned on the
funds held in the Trust Account may be released to us to fund our Regulatory
Withdrawals, subject to an annual limit of $1,100,000, for a maximum of
24 months and/or additional amounts necessary to pay our franchise and income
taxes.
At June 30, 2020 and December 31, 2019, the Company had current liabilities of
$278,978 and $426,496 and working capital of $583,665 and ($14,002),
respectively, largely due to amounts owed to professionals, consultants,
advisors and others who are working on seeking a Business Combination. Such work
is continuing after June 30, 2020 and amounts are continuing to accrue.
We intend to use substantially all of the funds held in the Trust Account,
including interest (which interest shall be net of Regulatory Withdrawals and
taxes payable) to consummate our Business Combination. Moreover, we may need to
obtain additional financing either to complete a Business Combination or because
we become obligated to redeem a significant number of shares of our Common Stock
upon completion of a Business Combination. Subject to compliance with applicable
securities laws, we would only complete such financing simultaneously with the
completion of our Business Combination. If we are unable to complete our
Business Combination because we do not have sufficient funds available to us, we
will be forced to cease operations and liquidate the Trust Account. In addition,
following our Business Combination, if cash on hand is insufficient, we may need
to obtain additional financing in order to meet our obligations. To the extent
that our capital stock or debt is used, in whole or in part, as consideration to
consummate our Business Combination, the remaining proceeds held in our Trust
Account, if any, will be used as working capital to finance the operations of
the target business or businesses, make other acquisitions and pursue our growth
strategy.
Off-balance sheet financing arrangements
We had no obligations, assets or liabilities which would be considered
off-balance sheet arrangements at June 30, 2020. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
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We had not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or entered into any non-financial agreements involving assets.
Contractual obligations
As of June 30, 2020 and December 31, 2019, we did not have any long-term debt
obligations, capital lease obligations, operating lease obligations, purchase
obligations or long-term liabilities. In connection with the Public Offering, we
entered into an administrative services agreement to pay monthly recurring
expenses of $20,000 to The Gores Group for office space, utilities and
secretarial support. The administrative services agreement terminates upon the
earlier of the completion of a Business Combination or the liquidation of the
Company.
The underwriter is entitled to underwriting discounts and commissions of 5.5%,
of which 2.0% ($8,500,000) was paid at the closing of the Public Offering, and
3.5% ($14,875,000) was deferred. The Deferred Discount will become payable to
the underwriter 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. The underwriter is not entitled to any interest accrued
on the Deferred Discount.
Recently issued accounting pronouncements not yet adopted
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 based on current operations of the
Company. The impact of any recently issued accounting standards will be
re-evaluated on a regular basis or if a business combination is completed where
the impact could be material.
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