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 25, 2020 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 August 10,
2020. As of September 30, 2020, we had not identified 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 three months ended September 30, 2020, we had a net loss of ($315,276).
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 August 10, 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 September
30, 2020, we had $1,117,624 in cash and deferred offering costs of $18,375,000.
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 14, 2020, the Sponsor purchased 11,500,000 Founder Shares for an
aggregate purchase price of $25,000, or approximately $0.002 per share.
Subsequently, the Sponsor transferred an aggregate of 75,000 Founder Shares to
the Company's independent directors. On August 5, 2020, the Company effected a
stock dividend with respect to the Company's Founder Shares of 2,156,250 shares
thereof, resulting in the Company's initial
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stockholders holding an aggregate of 13,656,250 shares of Class F Common Stock.
On September 21, 2020, the Sponsor forfeited 531,250 Founder Shares following
the expiration of the unexercised portion of underwriter's over-allotment
option, so that the Founder Shares held by the Initial Stockholders would
represent 20.0% of the outstanding shares of common stock following completion
of the Public Offering.
On August 10, 2020, the Company consummated its Public Offering of 52,500,000
Units at a price of $10.00 per Unit, including 5,000,000 Units as a result of
the underwriter's partial exercise of its over-allotment option, generating
gross proceeds of $525,000,000. On the IPO Closing Date, we completed the
private sale of an aggregate of 6,250,000 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 $12,500,000. 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 $526,055,000, of which
$525,000,000 (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, for a maximum of 24 months and/or additional amounts necessary to
pay our franchise and income taxes.
On July 14, 2020, Company borrowed $300,000 by the issuance of an unsecured
promissory note from the Sponsor for $300,000 to cover expenses related to the
Public Offering. These Notes were non-interest bearing and payable on the
earlier of June 30, 2021 or the completion of the Public Offering. These Notes
were repaid in full upon the completion of the Public Offering.
As of September 30, 2020, we had cash held outside of the Trust Account of
approximately $1,117,624, 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, for a maximum
of 24 months and/or additional amounts necessary to pay our franchise and income
taxes.
At September 30, 2020, the Company had current liabilities of $621,908 and
working capital of $931,491, largely due to amounts owed to professionals,
consultants, advisors and others who are working on seeking a Business
Combination. Such work is continuing after September 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 September 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.
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.
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Contractual obligations
As of September 30, 2020, 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%
($28,825,000), of which 2.0% ($10,500,000) was paid at the closing of the Public
Offering, and 3.5% ($18,375,000) 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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