The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Acamar Partners Acquisition
Corp. (the “Company”) was incorporated in Delaware on November 7, 2018. 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”).
Although the Company
is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus
its search on companies in the consumer and retail sectors. The Company is an early stage and emerging growth company and, as such,
the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of June 30,
2020, the Company had not commenced any operations. All activity through June 30, 2020 relates to the Company’s formation,
the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company
for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business
Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived
from the Initial Public Offering.
The registration statement
for the Company’s Initial Public Offering was declared effective on February 21, 2019. On February 26, 2019, the
Company consummated the Initial Public Offering of 30,000,000 units (“Units” and, with respect to the shares of Class A
common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $300,000,000,
which is described in Note 3.
Simultaneously with
the closing of the Initial Public Offering, the Company consummated the sale of 6,000,000 warrants (the “Private Placement
Warrants”) at a price of $1.50 per Private Placement Warrants in a private placement to Acamar Partners Sponsor I LLC, a
Delaware limited liability company (the “Sponsor”), generating gross proceeds of $9,000,000, which is described in
Note 4.
Following the closing
of the Initial Public Offering on February 26, 2019, an amount of $300,000,000 ($10.00 per Unit) from the net proceeds of
the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account
(“Trust Account”) which has been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16)
of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less
or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of
the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination
or (ii) the distribution of the Trust Account, as described below.
On April 9, 2019,
in connection with the underwriters’ election to partially exercise their option to purchase additional Units, the Company
sold an additional 557,322 Units at $10.00 per Unit and sold an additional 74,310 Private Placement Warrants at $1.50 per Private
Placement Warrant, generating total gross proceeds of $5,684,685. Following such closing, an additional $5,573,220 of net proceeds
($10.00 per Unit) was deposited in the Trust Account, resulting in $305,573,220 ($10.00 per Unit) held in aggregate deposited into
the Trust Account.
Offering costs amounted
to $17,437,018, consisting of $6,111,465 of underwriting fees, $10,695,063 of deferred underwriting fees and $630,490 of other
offering costs. As of June 30, 2020, cash of $590,796 was held outside of the Trust Account (as defined below) and is available
for working capital purposes.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
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. The Company must complete a Business Combination with one or more target businesses that together
have a fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions
and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The
Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete
a Business Combination successfully.
The Company will provide
its holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion
of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called
to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public
Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account
($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its tax obligations). The per-share amount to be distributed to Public Stockholders 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). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
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, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination.
If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons,
the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate
of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission
(“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder
approval of the transactions is required by law, or the Company decides to obtain stockholder approval for business or legal reasons,
the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant
to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s
Sponsor, officers and directors (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in
Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination.
Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against
the proposed transaction.
If the Company seeks
stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended
and Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or
any other person with whom such stockholder 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 an aggregate of 10% or more of the Public Shares, without the prior consent of the Company.
The Initial Stockholders
have agreed (a) to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection
with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate
of Incorporation (i) 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 or (ii) with respect to any other provision relating to stockholders’
rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem
their Public Shares in conjunction with any such amendment.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
The Company will have
until February 26, 2021 to complete a Business Combination (the “Combination Period”). However, if the Company
is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including
interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and less up to $100,000 of
interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely
extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the
approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject
in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other
applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which
will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The Initial Stockholders
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 Stockholders or any of their respective affiliates acquire Public Shares
after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account 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 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 assets remaining available for distribution will be less than the Initial Public Offering
price per Unit ($10.00).
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
third party for services rendered or products sold to the Company, or a prospective target business with which the Company has
discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public
Share or (ii) such lesser 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 Public Share due to reductions in the value of the trust assets, except as to any claims by a
third party that executed a waiver of any and all rights to funds held in the Trust Account (whether or not such waiver is enforceable)
and except as 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 (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.
Going Concern
In connection with
the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern,”
the Company has until February 26, 2021 to consummate a Business Combination. It is uncertain that the Company will be able
to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory
liquidation and subsequent dissolution of the Company. Management has determined that the mandatory liquidation, should a Business
Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company's ability to continue as
a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required
to liquidate after February 26, 2021.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and
Article 10 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim
financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of
financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial
statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the
financial position, operating results and cash flows for the periods presented.
The accompanying
unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on
Form 10-K for the year ended December 31, 2019 as filed with the SEC on March 27, 2020, which contains the
audited financial statements and notes thereto. The financial information as of December 31, 2019 is derived from the
audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019. The interim results for the three and six months ended June 30, 2020 are not necessarily
indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods.
Emerging Growth Company
The Company is an
“emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart
Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to,
not being required to comply with the independent registered public accounting firm attestation requirements of Section 404
of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of
any golden parachute payments not previously approved.
Further, Section 102(b)(1) of
the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not
have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt
out of such extended transition period which means that when a standard is issued or revised and it has different application dates
for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with
another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using
the extended transition period difficult or impossible because of the potential differences in accounting standards used.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
Use of Estimates
The preparation of
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 condensed financial statements
and the reported amounts of revenues and expenses during the reporting periods.
Making estimates requires
management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly
from those estimates.
Cash and Cash Equivalents
The Company considers
all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company
did not have any cash equivalents as of June 30, 2020 and December 31, 2019.
Common Stock Subject to Possible Redemption
The Company
accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to
mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common
stock (including common stock that feature redemption rights that is either within the control of the holder or subject to
redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary
equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock
features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence
of uncertain future events. Accordingly, at June 30, 2020 and December 31, 2019, the 29,590,416 and 29,574,811,
respectively, shares of Class A common stock subject to possible redemption are presented as temporary equity, outside
of the stockholders’ equity section of the Company’s condensed balance sheets.
Offering Costs
Offering costs consist
of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the
Initial Public Offering. Offering costs amounting to $17,437,018 were charged to stockholders’ equity upon the completion
of the Initial Public Offering.
Income Taxes
The Company follows
the asset and liability method of accounting for income taxes under 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. As of June 30, 2020 and December 31, 2019, the Company had a deferred tax asset
of approximately $383,000 and $154,000, respectively, which had a full valuation allowance recorded against it of approximately
$383,000 and $154,000, respectively.
The Company’s
currently taxable income primarily consists of interest income on the Trust Account. The Company’s general and administrative
costs are generally considered start-up costs and are not currently deductible. During the three and six months ended June 30,
2020, the Company recorded income tax expense of approximately $93,000 and $331,000, respectively, primarily related to interest
income earned on the Trust Account. During the three and six months ended June 30, 2019, the Company recorded income tax expense
of approximately $370,000 and $496,000, respectively, primarily related to interest income earned on the Trust Account. The Company’s
effective tax rate for the three and six months ended June 30, 2020 was approximately 39% and 68%, respectively, and three
and six months ended June 30, 2019 was approximately 24%, which differs from the expected income tax rate due to the start-up
costs (discussed above) which are not currently deductible.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
ASC 740 prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken
or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as
of June 30, 2020 and December 31, 2019. 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.
Net Income (Loss) Per Common Share
Net income (loss)
per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the
period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase
an aggregate of 16,260,084 shares of Class A common stock in the calculation of diluted income (loss) per share, since the
exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive
under the treasury stock method.
The
Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to
redemption in a manner similar to the two-class method of income per share. Net income per common share, basic and diluted,
for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account of
$491,146 and $1,808,625 for the three months ended June 30, 2020 and 2019, respectively (net of applicable franchise and
income taxes of $142,641 and $419,677 for the three months ended June 30, 2020 and 2019, respectively) by the weighted
average number of shares of Class A redeemable common stock outstanding for the periods. Net income per common share,
basic and diluted, for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust
Account of $1,677,132 and $2,460,117 for the six months ended June 30, 2020 and 2019, respectively (net of applicable
franchise and income taxes of $431,536 and $596,436 for the six months ended June 30, 2020 and 2019, respectively) by
the weighted average number of shares of Class A redeemable common stock outstanding for the periods. Net loss per
common share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income
(loss), less income attributable to Class A redeemable common stock, net of applicable franchise and income taxes, by the
weighted average number of Class B non-redeemable common stock outstanding for the periods. Class B non-redeemable
common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the
income earned on the Trust Account.
Concentration of credit risk
Financial instruments
that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution which,
at times may exceed the Federal Depository Insurance Coverage of $250,000. At June 30, 2020 and December 31, 2019, the
Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such
account.
Fair value of financial instruments
The fair value of
the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,”
approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recently issued accounting standards
Management does not
believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect
on the Company’s condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial
Public Offering, the Company sold 30,557,322 Units at a purchase price of $10.00 per Unit, inclusive of 557,322 Units sold to the
underwriters on April 9, 2019 upon the underwriters’ election to partially exercise their option to purchase additional
Units. Each Unit consists of one share of Class A common stock and one-third of one redeemable warrant (“Public Warrant”).
Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per
share, subject to adjustment (see Note 6).
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 4. RELATED PARTY TRANSACTIONS
Founder Shares
On November 15,
2018, the Sponsor purchased 8,625,000 shares (the “Founder Shares”) of the Company’s Class B common stock
for an aggregate price of $25,000. The Founder Shares will automatically convert into Class A common stock upon consummation
of a Business Combination on a one-for-one basis, subject to certain adjustments, as described in Note 6.
The Founder Shares
included an aggregate of up to 1,125,000 shares subject to forfeiture to the extent that the underwriters’ option to purchase
additional Units was not exercised in full or in part, so that the Initial Stockholders would own, on an as-converted basis, 20%
of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders did not
purchase any Public Shares in the Initial Public Offering). On April 9, 2019, as a result of the underwriters’ election
to partially exercise their option to purchase additional Units, 985,670 Founder Shares were forfeited and 139,330 Founder Shares
are no longer subject to forfeiture, resulting in an aggregate of 7,639,330 Founder Shares issued and outstanding.
The Initial
Stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until
the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a
Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as
adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the
Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the
Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other
property.
Private Placement
Simultaneously with
the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,000,000 Private Placement Warrants at a price
of $1.50 per Private Placement Warrant, for an aggregate purchase price of $9,000,000. On April 9, 2019, in connection
with the underwriters’ election to partially exercise their option to purchase additional Units, the Company sold an additional
74,310 Private Placement Warrants to the Sponsor, at a price of $1.50 per Private Placement Warrant, generating gross proceeds
of $111,465. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50
per share. The 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 proceeds of the sale
of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable
law), and the Private Placement Warrants will expire worthless.
Advance from Related Party
The Sponsor advanced
the Company an aggregate of $77,389 to cover expenses related to the Initial Public Offering. The advances were non-interest bearing
and due on demand. The advances were repaid on February 27, 2019.
Promissory Note – Related Party
On November 19,
2018, the Sponsor agreed to loan the Company an aggregate of up to $400,000 to cover expenses related to the Initial Public Offering
(the “Promissory Note”). The Promissory Note was non-interest bearing and payable on the earlier of June 30, 2019
or the completion of the Initial Public Offering. The borrowings outstanding under the Promissory Note of $400,000 were repaid
on February 27, 2019.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
Related Party Loans
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 $2,000,000 of such Working Capital Loans
may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units
would be identical to the Units sold in the Initial Public Offering except that the warrants underlying such units would be
identical to the Private Placement Warrants. As of June 30, 2020 and December 31, 2019, the Company had no outstanding
balance under the Working Capital Loans.
Administrative Support Agreement
The Company
entered into an agreement whereby, commencing on the February 21, 2019 through the earlier of the Company’s
consummation of a Business Combination and its liquidation, the Company agreed to pay an affiliate of the Sponsor a total
of $37,000 per month for office space, administrative support and salaries to be paid to employees of such affiliate
for due diligence and related services in connection with the Company’s search for a target company (although no
salaries or fees will be paid from the monthly fee to members of the Company’s management team). For each of the three
months June 30, 2020 and 2019, the Company incurred $111,000 in fees for these services. For the six months ended
June 30, 2020 and 2019, the Company incurred $222,000 and $148,000 in fees for these services, respectively. At
June 30, 2020 and December 31, 2019, $32,000 and $0, respectively, are included in accrued expenses in the
accompanying condensed balance sheets.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues
to evaluate 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.
Registration Rights
Pursuant to a registration
rights agreement entered into on February 21, 2019, the holders of the Founder Shares, Private Placement Warrants and securities
that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise
of the Private Placement Warrants or warrants that may be issued upon conversion of working capital loans and upon conversion of
the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case
of the Founder Shares, only after conversion to Class A common stock). 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 a Business
Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities
Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
ACAMAR PARTNERS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
Underwriting Agreement
In connection with
the closing of the Initial Public Offering and the option to purchase additional Units, the underwriters were paid a cash underwriting
discount of $0.20 per Unit, or $6,111,465 in the aggregate. In addition, the underwriters are entitled to a deferred fee
of $0.35 per Unit, or $10,695,063 in the aggregate. 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. Of such amount, up to approximately $0.10 per Unit, or up to $3,055,732, may be paid to third parties not participating
in the Initial Public Offering (but who are members of FINRA) that assist the Company in consummating a Business Combination. The
election to make such payments to third parties will be solely at the discretion of the Company, and such third parties will be
selected by the Company in its sole discretion.
NOTE 6. STOCKHOLDERS' EQUITY
Preferred Stock
— The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.0001 per share with
such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board
of directors. At June 30, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding.
Class A
Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value
of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At June 30, 2020 and December 31,
2019, there were 966,906 and 982,511 of Class A common stock issued or outstanding, excluding 29,590,416 and 29,574,811 shares
of Class A common stock subject to possible redemption, respectively.
Class B
Common Stock — The Company is authorized to issue 15,000,000 shares of Class B common stock with a par value
of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. At June 30, 2020 and December 31,
2019, there were 7,639,330 shares of Class B common stock issued and outstanding.
Holders of Class B
common stock will have the right to elect all of the Company’s directors prior to a Business Combination. Holders of Class A
common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders,
except as required by law.
The shares of Class B
common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a one-for-one
basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are
issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business
Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will
be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution
adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable
upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the total
number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A
common stock and equity-linked securities issued or deemed issued in connection with a Business Combination, excluding any shares
or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement securities
issued upon conversion of loans made to the Company. Holders of Founder Shares may also elect to convert their shares of Class B
common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
ACAMAR
PARTNERS ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2020
(Unaudited)
Warrants —
Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the
Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after
the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public
Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not
be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of
Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares
of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration. 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.
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, and within 60 business days following a Business Combination to have
declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise
of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire
or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed
on a national securities exchange such that it satisfies 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
so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its reasonable
best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.
In addition, if the
Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection
with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of
Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s
board of directors, and in the case of any such issuance to the Sponsor or 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”), the
exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price.
Redemptions of
Warrants for Cash — Once the warrants become exercisable, the Company may redeem the Public Warrants:
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·
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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 to each warrant holder; and
|
|
·
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if, and only if, the reported last sale price of the Company’s Class A common stock 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 and when the warrants
become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the
underlying securities for sale under all applicable state securities laws.
Redemption of Warrants
for Shares of Class A Common Stock — Commencing ninety days after the warrants become exercisable, the Company may
redeem the outstanding warrants (including both Public Warrants and Private Placement Warrants):
|
·
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in whole and not in part;
|
|
·
|
at a price equal to a number of shares of Class A common stock to be determined, based on the redemption date and the fair market value of the Company’s Class A common stock;
|
|
·
|
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 Company’s Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock 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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ACAMAR
PARTNERS ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2020
(Unaudited)
If the Company calls
the Public Warrants for redemption for cash, 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. The exercise price and number of shares
of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event
of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for
issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required
to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and
the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect
to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with
the respect to such warrants. Accordingly, the warrants may expire worthless.
The Private 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 common stock issuable upon the 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 Placement Warrants will be exercisable on a cashless basis and be non-redeemable for cash so long as they are
held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than
the initial purchasers 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.
NOTE 7. FAIR VALUE MEASUREMENTS
The Company classifies
its U. S. Treasury and equivalent securities as held-to-maturity in accordance with ASC 320 “Investments - Debt and Equity
Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until
maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for
the amortization or accretion of premiums or discounts.
At June 30,
2020 and December 31, 2019, assets held in the Trust Account were comprised of $267,507 and $152,096 in cash and cash
equivalents and $310,844,426 and $309,688,279, respectively, in U.S. Treasury Bills, which are held at amortized cost.
Through June 30, 2020, the Company withdrew $1,669,976 of interest earned on the Trust Account to pay for its franchise
and income tax obligations, of which $405,574 was withdrawn during the six months ended June 30, 2020.
The gross holding
losses and fair value of held-to-maturity securities at June 30, 2020 and December 31, 2019 are as follows:
|
|
Held-To-Maturity
|
|
Amortized Cost
|
|
|
Gross
Holding
Gain
|
|
|
Fair Value
|
|
June 30, 2020
|
|
U.S. Treasury Securities (Matures on 9/10/2020)
|
|
$
|
310,844,426
|
|
|
$
|
7,122
|
|
|
$
|
310,851,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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December 31, 2019
|
|
U.S. Treasury Securities (Matured on 2/6/2020)
|
|
$
|
309,688,279
|
|
|
$
|
2,018
|
|
|
$
|
309,690,297
|
|
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.
|
|
|
|
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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.
|
ACAMAR
PARTNERS ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2020
(Unaudited)
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
NOTE 8. SUBSEQUENT EVENTS
The Company evaluated
subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were
issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure
in the condensed financial statements.