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
SEPTEMBER 30, 2020
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Roth CH Acquisition I Co. (the “Company”)
was incorporated in Delaware on February 13, 2019. The Company is a blank check company formed for the purpose of entering
into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination
with one or more businesses or entities (the “Business Combination”).
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 September 30, 2020, the Company
had not commenced any operations. All activity for the period from February 13, 2019 (inception) through September 30,
2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described
below. The Company will not generate any operating revenues until after the completion of a
Business Combination, at the earliest. The Company will generate 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 May 4, 2020. On May 7, 2020, the Company consummated the Initial Public
Offering of 7,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold,
the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $75,000,000, which is described in Note 3.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 262,500 units (the “Private Units”) at a price of $10.00
per Private Unit in a private placement to our initial stockholders, generating gross proceeds of $2,625,000, which is described
in Note 4.
Following the closing of the Initial Public
Offering on May 7, 2020, an amount of $75,000,000 ($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 Units was placed in a trust account (“Trust Account”) which will
be invested only 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 selected by the Company 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 and (ii) the
distribution of the Trust Account, as described below.
On May 26, 2020, in connection with
the underwriters’ election to partially exercise their over-allotment option, the Company sold an additional 150,000 Units
at a purchase price of $10.00 per Unit, generating gross proceeds of $1,500,000. In addition, in connection with the underwriters’
partial exercise of their over-allotment option, the Company also consummated the sale of an additional 3,000 Private Units at
a purchase price of $10.00 per Private Unit, generating gross proceeds of $30,000. Following such closing, an additional $1,500,000
was deposited into the Trust Account, resulting in $76,500,000 being held in the Trust Account.
Transaction costs amounted to $4,678,313, consisting
of $1,530,000 of underwriting fees, $2,677,500 of deferred underwriting fees and $470,813 of other offering costs. In addition,
as of September 30, 2020, cash of $408,543 was held outside of the Trust Account (as defined below) and is available for
working capital purposes.
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 the Private Units, 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 a Business
Combination 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 an
initial 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.
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). There will be no redemption rights upon the completion of a Business Combination with respect to the
Company’s warrants.
ROTH CH ACQUISITION I CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
The Company will proceed with a Business
Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or 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 legal 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 containing substantially
the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder
approval of the transaction 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 holders of
the Company’s shares prior to the Initial Public Offering (the “Initial Stockholders”) have agreed to vote their
Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the
Initial Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection
with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with
a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether
they vote for or against the Initial transaction or don’t vote at all.
The Initial Stockholders have agreed (a) to
waive their redemption rights with respect to their Founder Shares, Private 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 that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection
with a Business Combination or affect 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, unless the Company provides the public stockholders with the opportunity
to redeem their Public Shares in conjunction with any such amendment.
The Company will have until November 7,
2021 to complete a Business Combination (the “Combination Period”). 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 five 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 and not previously released to the Company to pay taxes, 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.
The Initial Stockholders have agreed to
waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business
Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or 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 6) held in the Trust Account in the event the Company does not complete a Business Combination within the
Combination Period and, in such event, such amounts will be included with the 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 Initial Stockholders have 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 to below $10.00 per Public Share, except as to any
claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim
of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity
of the underwriters of 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 Initial Stockholders will not be responsible to the extent of any liability for such third-party claims. The
Company will seek to reduce the possibility that Initial Stockholders 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.
Liquidity
As of September 30, 2020, the Company
had $408,543 in its operating bank accounts, $76,522,615 in marketable securities held in the Trust Account to be used for a Business
Combination or to repurchase or redeem stock in connection therewith and working capital of $496,250, which excludes franchise
taxes payable of $65,500, of which such amount will be paid from interest earned on the Trust Account. As of September 30,
2020, approximately $23,000 of the amount on deposit in the Trust Account represented interest income, which is available to pay
the Company’s tax obligations.
ROTH CH ACQUISITION I CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
On November 2, 2020, the Sponsor committed
to provide the Company an aggregate of $100,000 in loans in order to finance transaction costs in connection with a Business Combination.
The Company may raise additional capital
through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s
officers and directors and the Sponsor may, but are not obligated to (except as described above), loan the Company funds, from
time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs.
Based on the foregoing, the Company believes it will have sufficient cash to meet its needs through the earlier of consummation
of a Business Combination or November 7, 2021, the deadline to complete a Business Combination pursuant to the Company’s
Amended and Restated Certificate of Incorporation (unless otherwise amended by stockholders).
Risks and Uncertainties
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic
which continues to spread throughout the United States and the World. As of the date the financial statements were available to be issued,
there was considerable uncertainty around the expected duration of this pandemic. We have concluded that while it is reasonably possible
that COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily
determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
NOTE 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 8 of Regulation S-X
of the Securities and Exchange Commission (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 prospectus for its Initial Public Offering as filed with the
SEC on May 6, 2020, as well as the Company’s Current Reports on Form 8-K, as filed with the SEC on May 7,
2020 and May 13, 2020. The interim results for the three and nine months ended September 30, 2020 are not necessarily
indicative of the results to be expected for the year ending December 31, 2020 or for any future 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 statement 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.
Use of Estimates
The preparation of condensed financial
statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting 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 confirming events. Accordingly, the actual results could differ significantly
from those estimates.
ROTH CH ACQUISITION I CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
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 September 30, 2020 and December 31, 2019.
Marketable Securities Held in Trust
Account
At September 30, 2020, substantially
all of the assets held in the Trust Account were held in money market funds, which primarily invest in U.S. Treasury Bills. During
the nine months ended September 30, 2020, the Company did not withdraw any of the interest earned on the Trust Account.
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 features 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, common stock subject to possible redemption is presented
at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance
sheets.
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.
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 September 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. The effective tax rate of 0% differs from the statutory tax rate of 21% for the three and nine months ended September 30,
2020 due to the valuation allowance recorded against the Company’s net operating losses.
On March 27, 2020, President Trump
signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant
business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOL)
and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend the excess business loss
rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest
limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts
and Jobs Act tax provisions.
Net Loss Per Common Share
Net loss per share is computed by
dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of
common stock subject to forfeiture. At September 30, 2019, weighted average shares were reduced for the effect of an
aggregate of 281,250 shares of common stock that were subject to forfeiture if the over-allotment option was not exercised by
the underwriters (see Note 7). The Company applies the two-class method in calculating earnings per share. Shares of common
stock subject to possible redemption at September 30, 2020, which are not currently redeemable and are not redeemable at
fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate
in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants to purchase
5,936,265 shares of common stock that were sold in the Initial Public Offering and the private placement in the
calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events.
As a result, diluted loss per share is the same as basic loss per share for the period presented.
ROTH CH ACQUISITION I CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Reconciliation of Net Loss Per Common
Share
The Company’s net loss is adjusted
for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate
in the earnings of the Trust Account and not the income and losses of the Company. There were no such adjustments for the three
months ended September 30, 2019 and for the period from February 13, 2019 (inception) through September 30, 2019.
Accordingly, basic and diluted loss per common share is calculated as follows:
|
|
|
Three
Months Ended
September 30,
|
|
|
Nine
Months Ended
September 30,
|
|
|
|
|
2020
|
|
|
2020
|
|
|
Net loss
|
|
$
|
(120,209
|
)
|
|
$
|
(224,032
|
)
|
|
Less: Income attributable to shares subject to possible redemption
|
|
|
(12,331
|
)
|
|
|
—
|
|
|
Adjusted net loss
|
|
$
|
(132,540
|
)
|
|
$
|
(224,032
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted
|
|
|
2,888,374
|
|
|
|
2,409,765
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
$
|
(0.05
|
)
|
|
$
|
(0.09
|
)
|
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. 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 820, “Fair Value Measurement,” approximates
the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recent 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. PUBLIC OFFERING
Pursuant to the Initial Public Offering,
the Company sold 7,650,000 Units, at a price of $10.00 per Unit, inclusive of 150,000 Units sold to the underwriters on May 26,
2020 upon the underwriters’ election to partially exercise their over-allotment option. Each Unit consists of one share of
common stock and three-quarters of one redeemable warrant (“Public Warrant”).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the
Initial Public Offering, the Initial Stockholders purchased an aggregate of 262,500 Private Units, at a price of $10.00 per Private
Unit, for an aggregate purchase price of $2,625,000. On May 26, 2020, in connection with the underwriters’ election
to partially exercise their over-allotment option, the Company sold an additional 3,000 Private Units to the Initial Stockholders,
generating gross proceeds of $30,000. Each Private Unit consists of one share of common stock (“Private Share”) and
three-quarters of one redeemable warrant (“Private Warrant”). Each whole Private Warrant entitles the holder to purchase
one share of common stock at a price of $11.50 per full share (every four units entitles the holder thereof to receive three whole
warrants), subject to adjustment (see Note 7). The proceeds from the Private Units 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 from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements
of applicable law).
ROTH CH ACQUISITION I CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In April 2019, the Initial Stockholders
purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On November 12,
2019, the Company effected a 1 for 21,562.50 dividend in the nature of a stock split that resulted in there being an aggregate
of 2,156,250 shares of common stock outstanding and being held by the Initial Stockholders (the “Founder Shares”).
All share and per-share amounts have been retroactively restated to reflect the stock dividend. The 2,156,250 Founder Shares included
an aggregate of up to 281,250 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’
over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively own 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 and excluding the Private Shares). As a result of the underwriters’ election to partially
exercise their over-allotment option and forfeit the balance of their option, 243,750 Founder Shares were forfeited and 37,500
Founder Shares are no longer subject to forfeiture. As a result, as of May 26, 2020, there are 1,912,500 Founder Shares issued
and outstanding.
The Initial Stockholders have agreed, subject
to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of
the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing
price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with
respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either
case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction
which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities
or other property.
Promissory Note — Related Party
On October 4, 2019, the Company issued
an unsecured promissory note to the sponsor (the “Promissory Note”), pursuant to which the Company could borrow up
to an aggregate principal amount of $200,000. As of December 31, 2019, there was $200,000 outstanding under the Promissory
Note. The Promissory Note was non-interest bearing and payable on the earlier of (i) the consummation of the Initial Public
Offering or (ii) the date on which the Company determines not to proceed with the Initial Public Offering. Borrowings outstanding
under the Promissory Note of $200,000 were repaid upon the consummation of the Initial Public Offering on May 7, 2020.
Related Party Loans
In addition, in order to finance transaction
costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors
or their affiliates 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 be repaid upon consummation of a Business Combination, without
interest.
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement
entered into on May 4, 2020, the holders of the Founder Shares, as well as the holders of the Private Units (and underlying
securities) and any securities issued to the Initial Stockholders, officers, directors or their affiliates in payment of Working
Capital Loans made to Company are entitled to registration rights. The holders of a majority of these securities are entitled
to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect
to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock
are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) and securities issued
in payment of Working Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after
the Company consummates a business combination. In addition, the holders have certain “piggy-back” registration rights
with respect to registration statements filed subsequent to the consummation of a Business Combination. The Company will bear
the expenses incurred in connection with the filing of any such registration statements.
ROTH CH ACQUISITION I CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Underwriting Agreement
The Company granted the underwriters a
45-day option from the date of Initial Public Offering to purchase up to 1,125,000 additional Units to cover over-allotments, if
any, at the Initial Public Offering price less the underwriting discounts and commissions. On May 26, 2020, the underwriters
elected to partially exercise their over-allotment option to purchase an additional 150,000 Units at a purchase price of $10.00
Unit.
The underwriters were paid a cash underwriting
discount of 2.00% of the gross proceeds of the Initial Public Offering, or $1,530,000. In addition, the underwriters are entitled
to a deferred fee of 3.50% of the gross proceeds of the Initial Offering, or $2,677,500. The deferred fee will be paid in cash
upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting
agreement.
Investor Relations Agreement
On February 27, 2020, the Company
entered into an investor relations agreement, pursuant to which, in exchange for investor relations services, the Company will
pay the service provider a one-time fee of $10,000. Upon the closing of a Business Combination, the Company will pay the service
provider a fee of $50,000 and following the Business Combination, the Company will pay a fee of $10,000 per month for a period
of nine months. As of September 30, 2020, the Company has paid $10,000 of such fees.
NOTE 7. STOCKHOLDERS’ EQUITY
Common Stock — The Company
is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share. At September 30, 2020 and
December 31, 2019, there were 2,900,394 and 2,156,250 shares of common stock issued and outstanding, excluding 6,927,606 and
no shares of common stock subject to possible redemption, respectively.
Warrants — The Company will
not issue fractional warrants. The Public Warrants will become exercisable on the later of (a) the completion of a Business
Combination or (b) 12 months from the closing of the Initial Public Offering. No warrants will be exercisable for cash unless
the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the
warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement
covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within 120 days following the
consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and
during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless
basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available.
If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once the warrants become exercisable, the
Company may redeem the Public Warrants:
|
|
●
|
in whole and not in part;
|
|
|
●
|
at a price of $0.01 per warrant;
|
|
|
●
|
upon not less than 30 days’ prior written notice of redemption;
|
|
|
●
|
if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders; and
|
|
|
●
|
if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
|
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.
In addition, if (x) the Company issues
additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a
Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior
to such issuance), (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 a Business Combination on the date of the consummation of a Business Combination
(net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20
trading day period starting on the trading day prior to the day on which the Company consummates 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 Market Value and the $18.00 per share redemption trigger price described above will be adjusted
(to the nearest cent) to be equal to 180% of the Market Price.
ROTH CH ACQUISITION I CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
The exercise price and number of shares
of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock
dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, except as described
previously, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise
prices. 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 Warrants are identical to the
Public Warrants underlying the Units sold in the Proposed Public Offering, except that the Private Warrants and the shares of common
stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion
of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash
or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers
or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted
transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public
Warrants.
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.