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
MARCH 31, 2020
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
InterPrivate Acquisition Corp. (the “Company”)
was incorporated in Delaware on August 16, 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 March 31, 2020, the Company had not
commenced any operations. All activity through March 31, 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 a 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 statements for the Company’s
Initial Public Offering were declared effective on February 3, 2020. On February 6, 2020, the Company consummated the Initial Public
Offering of 21,000,000 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 $210,000,000, which is described in Note 3.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 555,000 units (the “Private Units”) at a price of $10.00
per Private Unit in a private placement to InterPrivate Acquisition Management LLC (the “Sponsor”) and EarlyBirdCapital,
Inc. (“EarlyBirdCapital”), generating gross proceeds of $5,550,000, which is described in Note 4.
Following the closing of the Initial Public
Offering on February 6, 2020, an amount of $210,000,000 ($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 (the “Trust Account”) located
in the United States, which will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of
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 of 1940, as
amended (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 February 7, 2020, the underwriters notified
the Company of their intention to fully exercise their over-allotment option on February 10, 2020. As such, on February 10, 2020,
the Company consummated the sale of an additional 3,150,000 Units, at $10.00 per Unit, and the sale of an additional 63,000 Private
Units, at $10.00 per Private Unit, generating total gross proceeds of $32,130,000. A total of $31,500,000 of the net proceeds was
deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $241,500,000.
Transaction costs amounted to $5,310,386
consisting of $4,830,000 of underwriting fees and $480,386 of other offering costs. In addition, $867,876 of cash was held outside
of the Trust Account and was 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
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.
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
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. 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 Company’s Sponsor and EarlyBirdCapital have agreed to vote their Founder Shares (as defined in Note 5),
Representative Shares (as defined in Note 7), Private Shares (as defined in Note 4) and any Public Shares purchased after the Initial
Public Offering (a) in favor of approving a Business Combination and (b) not to convert 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 proposed transaction or don’t vote at all.
The Sponsor and EarlyBirdCapital have agreed
(a) to waive their redemption rights with respect to their Founder Shares, Representative Shares, Private Shares and Public Shares
held by them in connection with the completion of a Business Combination or amendment to the Amended and Restated Certificate of
Incorporation, (b) to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares,
Representative Shares and Private Shares if the Company fails to consummate a Business Combination and (c) 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 6, 2021
to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination
within the Combination Period (and the Company’s stockholders do not approve an amendment to the Company’s amended
and restated certificate of incorporation to extend such 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 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.
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 $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 Insiders 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 Insiders 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.
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 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 30, 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 months ended March 31, 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 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 the 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 period.
Making estimates requires management to
exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the 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.
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 March 31, 2020 and December 31, 2019.
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
Marketable Securities Held in Trust
Account
At March 31, 2020, substantially all of
the assets held in the Trust Account were held in U.S. Treasury Bills.
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 March 31, 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.
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. The Company is still evaluating the impact, if any, of the CARES
Act on its financial position, results of operations and cash flows.
Net Loss per Common Share
Net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock outstanding during the period. The Company applies the
two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at March 31, 2020, which
are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per
common 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 sold in the Initial Public Offering and the private placement to purchase 12,384,000
shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the
occurrence of future events. As a result, diluted net loss per common share is the same as basic net loss per common share for
the period presented.
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
Reconciliation of Net Loss per Common
Share
The Company’s net income 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 or losses of the Company. Accordingly, basic and diluted loss per common
share is calculated as follows:
|
|
Three Months
Ended
March 31,
|
|
|
|
2020
|
|
Net income
|
|
$
|
1,225,382
|
|
Less: Income attributable to common stock subject to possible redemption
|
|
|
(1,299,168
|
)
|
Adjusted net loss
|
|
$
|
(73,786
|
)
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted
|
|
|
6,780,707
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.01
|
)
|
Concentration of Credit Risk
Financial instruments that potentially
subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed
the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management
believes the Company is not exposed to significant risks on such accounts.
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 Measurements and Disclosures,”
approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recent Accounting Pronouncements
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 24,150,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount
of 3,150,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one-half of one warrant
(“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one share of common stock at a price
of $11.50 per share, subject to adjustment (see Note 7).
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the
Initial Public Offering, the Sponsor and EarlyBirdCapital purchased an aggregate of 555,000 Private Units at a price of $10.00
per Private Unit, for an aggregate purchase price of $5,550,000. As a result of the underwriters’ election to fully exercise
their over-allotment option on February 10, 2020, the Sponsor and EarlyBirdCapital purchased an additional 63,000 Private Units
at a purchase price of $10.00 per Private Unit, for an aggregate purchase price of $630,000. The proceeds from the sale of the
Private Units were added to the net proceeds from the Initial Public Offering held in the Trust Account. Each Private Unit consists
of one share of common stock (“Private Share”) and one-half of one warrant (“Private Warrant”). Each whole
Private Warrant is exercisable to purchase one share of common stock at an exercise price of $11.50 per share, 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).
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In August 2019, the Sponsor purchased 5,750,000
shares (the “Founder Shares”) of the Company’s common stock for an aggregate price of $25,000. On December 30,
2019, the Sponsor contributed an aggregate of 718,750 Founder Shares back to the Company’s capital for no additional consideration
and in February 2020, the Company effected a dividend of 0.2 shares of common stock for each share of common stock outstanding,
resulting in there being an aggregate of 6,037,500 Founder Shares outstanding. All share and per-share amounts have been retroactively
restated to reflect the stock dividend. The Founder Shares included an aggregate of up to 787,500 shares subject to forfeiture
by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Sponsor
would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the
Sponsor did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares underlying the Private
Units and Representative Shares).
The Sponsor has agreed, subject to certain
limited exceptions, not to transfer, assign or sell any of the Founder Shares until, with respect to 50% of the Founder Shares,
the earlier of one year after the consummation 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 a 30-trading day period commencing after a Business Combination and, with respect to the
remaining 50% of the Founder Shares, until the one year after the consummation 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
In September 2019, the Company issued an
unsecured promissory note to InterPrivate Acquisition Management LLC (the “Promissory Note”), pursuant to which the
Company may borrow up to an aggregate principal amount of $150,000. The Promissory Note was non-interest bearing and payable on
the earlier of (i) September 1, 2020, (ii) the consummation of the Initial Public Offering or (iii) the date on which the Company
determined not to proceed with the Initial Public Offering. At December 31, 2019, $80,808 was outstanding under the Promissory
Note. The outstanding amount of $124,148 was repaid at the closing of the Initial Public Offering on February 6, 2020.
Related Party Loans
In addition, in order to finance transaction
costs in connection with a Business Combination, the Insiders, 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 either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $1,500,000 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 Private Units.
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
Administrative Support Agreement
The Company entered into an agreement whereby,
commencing on the February 3, 2020, through the earlier of the Company’s consummation of a Business Combination and the liquidation
of the Trust Account, the Company will pay an affiliate of one of the Company’s executive officers $10,000 per month for
office space, utilities and secretarial and administrative support. For the three months ended March 31, 2020, the Company incurred
and paid $20,000 in fees for these services.
Services Agreement
The Company entered into an agreement whereby,
commencing on the February 3, 2020, through the earlier of the Company’s consummation of a Business Combination and the liquidation
of the Trust Account, the Company will pay its Vice President a $10,000 per month fee for assisting the Company in negotiating
and consummating an initial Business Combination. For the three months ended March 31, 2020, the Company incurred and paid $20,000
in fees for these services.
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement
entered into on February 3, 2020, the holders of the Founder Shares and Representative Shares, as well as the holders of the Private
Units and any units that may be issued in payment of Working Capital Loans made to the Company (and all underlying securities),
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 Founders 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 Representative Shares, Private Units and units 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.
Notwithstanding anything to the contrary, EarlyBirdCapital may only make a demand on one occasion and only during the five-year
period beginning on the effective date of the Initial Public Offering. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination; provided,
however, that EarlyBirdCapital may participate in a “piggy-back” registration only during the seven-year period beginning
on the effective date of the Initial Public Offering. The Company will bear the expenses incurred in connection with the filing
of any such registration statements.
Underwriting Agreement
The underwriters were paid a cash underwriting
discount of $0.20 per Unit, or $4,830,000 in the aggregate.
Business Combination Marketing Agreement
The Company has engaged EarlyBirdCapital
as an advisor in connection with a Business Combination to assist the Company in holding meetings with its shareholders to discuss
the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that
are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining
shareholder approval for the Business Combination and assist the Company with its press releases and public filings in connection
with the Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation of a Business
Combination in an amount equal to 3.5% of the gross proceeds of Initial Public Offering, or $8,452,500 (exclusive of any applicable
finders’ fees which might become payable); provided that up to 33% of the fee may be allocated at the Company’s sole
discretion to other third parties who are investment banks or financial advisory firms not participating in the Initial Public
Offering that assist the Company in identifying and consummating a Business Combination.
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
NOTE 7. STOCKHOLDERS’ EQUITY
Preferred Stock — The
Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation,
rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31, 2020 and
December 31, 2019, there were no shares of preferred stock issued or outstanding.
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 March 31, 2020 and December
31, 2019, there were 7,347,667 and 6,337,500 shares of common stock issued and outstanding, excluding 23,707,833 and no shares
of common stock subject to possible redemption, respectively.
Warrants — The Public
Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from
the closing of the Initial Public Offering. 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 a specified period 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:
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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 not less than 30 days’ prior written notice of redemption;
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if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and
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if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.
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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.
The Private Warrants will be identical
to the Public Warrants underlying the Units being sold in the Initial 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 salable 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.
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, 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.
INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
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 sponsor, 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 greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares
of common stock or equity-linked securities.
Representative Shares
In September 2019, the Company issued to
the designees of EarlyBirdCapital 250,000 shares of common stock (the “Representative Shares”) (after giving effect
to a contribution back to the Company’s capital for no additional consideration of an aggregate of 50,000 shares EarlyBirdCapital
received as a result of the dividend effectuated by the Company in February 2020). The Company accounted for the Representative
Shares as an offering cost of the Initial Public Offering, with a corresponding credit to stockholders’ equity. The Company
estimated the fair value of Representative Shares to be $1,087 based upon the price of the Founder Shares issued to the Sponsor.
The holders of the Representative Shares have agreed not to transfer, assign or sell any such shares until the completion of a
Business Combination. In addition, the holders have agreed (i) to waive their redemption rights with respect to such shares in
connection with the completion of a Business Combination and (ii) to waive their rights to liquidating distributions from the Trust
Account with respect to such shares if the Company fails to complete a Business Combination within the Combination Period.
The Representative Shares have been deemed
compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date
of the registration statement related to the Initial Public Offering pursuant to Rule 5110(g)(1) of FINRA’s NASD Conduct
Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put
or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately
following the effective date of the registration statements related to the Initial Public Offering, nor may they be sold, transferred,
assigned, pledged or hypothecated for a period of 180 days immediately following the effective date of the registration statements
related to the Initial Public Offering except to any underwriter and selected dealer participating in the Initial Public Offering
and their bona fide officers or partners.
NOTE 8. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC
820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial
assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with
the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants
at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize
the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal
assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify
assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
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Level 1:
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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:
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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.
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Level 3:
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Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
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INTERPRIVATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
The following table presents information
about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2020, and indicates the fair
value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
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Level
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March 31,
2020
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Assets:
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Marketable securities held in Trust Account
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1
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$
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243,189,871
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NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events and
transactions that occurred after the balance sheet date up to the date that the condensed 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.