The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on
Form 10-K.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations has been amended and restated to give effect to the restatement and
revision of our financial statements as of December 31, 2020 and for the period
from September 23, 2020 (inception) through December 31, 2020. We are restating
our historical financial results for such period to reclassify our Warrants as
derivative liabilities pursuant to ASC 815-40 rather than as a component of
equity as we had previously treated the Warrants. The impact of the restatement
is reflected in the Management's Discussion and Analysis of Financial Condition
and Results of Operations below. Other than as disclosed in the Explanatory Note
and with respect to the impact of the restatement, no other information in this
Item 7 has been amended and this Item 7 does not reflect any events occurring
after the Original Filing. The impact of the restatement is more fully described
in Note 2 to our financial statements included in Item 15 of Part IV of this
Amendment and Item 9A: Controls and Procedures, both contained herein.
Overview
We are a blank check company incorporated on September 23, 2020 as a Delaware
corporation and formed for the purpose of entering into a merger, share
exchange, asset acquisition, stock purchase, recapitalization, reorganization or
similar Business Combination with one or more businesses or entities. We intend
to effectuate our initial Business Combination using cash from the proceeds of
the Initial Public Offering and the sale of the Private Placement Warrants, our
capital stock, debt or a combination of cash, stock and debt.
The outbreak of the COVID-19 coronavirus has resulted in a widespread health
crisis that has adversely affected the economies and financial markets
worldwide, and potential target companies may defer or end discussions for a
potential business combination with us whether or not COVID-19 affects their
business operations. The extent to which COVID-19 impacts our search for a
business combination will depend on future developments, which are highly
uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat
its impact, among others. We may be unable to complete a business combination if
continued concerns relating to COVID-19 restrict travel, limiting our ability to
conduct meetings to negotiate and consummate transactions in a timely manner
with potential investors, target company's personnel, or vendors and services
providers.
On December 4, 2020, simultaneously with the consummation of the IPO, we
consummated the private placement ("Private Placement") with Rodgers Capital,
LLC ( the "Sponsor") of 6,000,000 warrants (the "Private Warrants") at a price
of $1.00 per Private Warrant, generating total proceeds of $6,000,000. The
Private Warrants are identical to the Warrants (as defined below) sold in the
IPO except that the Private Warrants will be non-redeemable and may be exercised
on a cashless basis, in each case so long as they continue to be held by the
Sponsor, the anchor investors or their permitted transferees. Additionally, our
Sponsor and anchor investors have agreed not to transfer, assign, or sell any of
the Private Warrants or underlying securities (except in limited circumstances,
as described in the Registration Statement) until the date that is 30 days after
the date we complete our initial business combination. The Sponsor and anchor
investors were granted certain demand and piggyback registration rights in
connection with the purchase of the Private Warrants.
On February 22, 2021, we entered into a merger agreement (the "Merger Agreement"
or the "Agreement") with Enovix Corporation ("Enovix") and RSVA Merger Sub Inc.
("Merger Sub"), pursuant to which Merger Sub will merge with and into Enovix,
with Enovix surviving as our wholly-owned subsidiary (the "Merger").
As a result of the Merger, subject to reduction for indemnification claims as
described below, an aggregate of 105,000,000 shares of RSVA common stock will be
issued (or reserved for issuance pursuant to currently exercisable options or
warrants) in respect of shares of Enovix capital stock that are issued and
outstanding as of immediately prior to the effective time of the Merger and
options and warrants to purchase shares of Enovix capital stock, in each case,
that are issued, outstanding and vested as of immediately prior to the effective
time of the Merger. Additional shares of RSVA common stock will be reserved for
issuance in respect of options to purchase shares of Enovix capital stock that
are issued, outstanding and unvested as of immediately prior to the effective
time of the Merger.
14
Results of Operations
Our only activities from September 23, 2020 (inception) through December 31,
2020 were organizational activities, those necessary to consummate the Initial
Public Offering, described below, and identifying a target company for a
Business Combination. We do not expect to generate any operating revenues until
after the completion of our Business Combination. We generate non-operating
income in the form of interest income on marketable securities held in the Trust
Account. We are incurring expenses as a result of being a public company (for
legal, financial reporting, accounting and auditing compliance, D&O insurance),
as well as for due diligence expenses.
For the period from September 23, 2020 (inception) through December 31, 2020, we
had net loss of $2,493,666, which consisted of operating costs of $169,324 and a
change in the fair value of the warrant liability of $1,590,000, transaction
costs attributed to warrants of $701,379, and unrealized loss on marketable
securities held in the Trust Account of $38,849, offset by interest income on
marketable securities held in the Trust Account of $5,877 and interest income on
operating bank account of $9.
Liquidity and Capital Resources
On December 4, 2020, we consummated our Initial Public Offering of 23,000,000
Units, which includes the full exercise by the underwriter of its over-allotment
option in the amount of 3,000,000 Units, at a price of $10.00 per Unit,
generating gross proceeds of $230,000,000. Simultaneously with the closing of
the Initial Public Offering, we consummated the sale of 6,000,000 Private
Placement Warrants to our Sponsor, at $1.00 per Private Placement Warrant,
generating gross proceeds of $6,000,000.
Transaction costs amounted to $13,051,274 consisting of $4,600,000 of
underwriting fees, $8,050,000 of deferred underwriting fees and $401,274 of
other offering costs. Total transaction costs were allocated to a component of
equity and a component of the public company warrant liability (see footnote 2)
based on an allocated proceeds model. Approximately $0.7 million was allocated
to the warrant liability component and immediately expensed.
For the period from September 23, 2020 (inception) through December 31, 2020,
cash used in operating activities was $250,640. Net loss of $2,493,666 was
affected by interest earned on marketable securities held in the Trust Account
of $5,877, a non-cash charge for the change in the fair value of warrant
liabilities of $1,590,000, transaction costs attributed to warrants of $701,379
and unrealized loss on marketable securities held in the Trust Account of
$38,849. Changes in operating assets and liabilities used $81,325 of cash for
operating activities.
As of December 31, 2020, we had marketable securities held in the Trust Account
of $229,967,028 (including approximately $38,849 of unrealized loss) consisting
of securities held in a money market fund and government bonds that invests in
United States government treasury bills, bonds or notes with a maturity of 180
days or less. Interest income on the balance in the Trust Account may be used by
us to pay taxes. Through December 31, 2020, we did not withdraw any interest
earned on the Trust Account to pay our taxes. We intend to use substantially
all of the funds held in the Trust Account, to acquire a target business and to
pay our expenses relating thereto. To the extent that our capital stock is used
in whole or in part as consideration to effect a Business Combination, the
remaining funds held in the Trust Account will be used as working capital to
finance the operations of the target business. Such working capital funds could
be used in a variety of ways including continuing or expanding the target
business' operations, for strategic acquisitions and for marketing, research and
development of existing or new products. Such funds could also be used to repay
any operating expenses or finders' fees which we had incurred prior to the
completion of our Business Combination if the funds available to us outside of
the Trust Account were insufficient to cover such expenses.
As of December 31, 2020, we had cash of $773,086. We intend to use the funds
held outside the Trust Account for identifying and evaluating prospective
acquisition candidates, performing business due diligence on prospective target
businesses, traveling to and from the offices, plants or similar locations of
prospective target businesses, reviewing corporate documents and material
agreements of prospective target businesses, selecting the target business to
acquire and structuring, negotiating and consummating the Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the initial stockholders or an affiliate
of the initial stockholders, or certain of our officers and directors or their
affiliates may, but are not obligated to, loan us funds as may be required. If
we complete our initial Business Combination, we would repay such loaned
amounts. In the event that our initial Business Combination does not close, we
may use a portion of the working capital held outside the Trust Account to repay
such loaned amounts but no proceeds from our Trust Account would be used for
such repayment. Up to $1,000,000 of loans may be convertible into Private
Placement Warrants, at a price of $1.00 per warrant. The warrants' terms and
conditions would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a Business Combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior
to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become
obligated to redeem a significant number of our public shares upon consummation
of our Business Combination, in which case we may issue additional securities or
incur debt in connection with such Business Combination. Subject to compliance
with applicable securities laws, we would only complete such financing
simultaneously with the completion of our Business Combination. If we are unable
to complete our Business Combination because we do not have sufficient funds
available to us, we will be forced to cease operations and liquidate the Trust
Account. In addition, following our Business Combination, if cash on hand is
insufficient, we may need to obtain additional financing in order to meet our
obligations.
15
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2020. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than an agreement to pay our Sponsor
a monthly fee of $10,000 for office space, utilities and secretarial and
administrative support. We began incurring these fees on December 4, 2020 and
will continue to incur these fees monthly until the earlier of the completion of
the Business Combination and our liquidation.
The underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of
the Initial Public Offering, or $8,050,000. The deferred fee will be payable in
cash to the underwriters solely in the event that we complete a Business
Combination from the amounts held in the Trust Account, subject to the terms of
the underwriting agreement.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
Warrant Liability
We account for the Warrants in accordance with the guidance contained in ASC
815-40-15-7D and 7F under which the Warrants do not meet the criteria for equity
treatment and must be recorded as liabilities. Accordingly, we classify the
Warrants as liabilities at their fair value and adjust the Warrants to fair
value at each reporting period. This liability is subject to re-measurement at
each balance sheet date until exercised, and any change in fair value is
recognized in our statement of operations. The fair value of the Public Warrants
were estimated using a Monte Carlo simulation model . The Private Placement
Warrants were valued using a Modified Black Scholes Option Pricing Model. (see
Note 2)
Common Stock Subject to Possible Redemption
We account for our 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 measured at fair value.
Conditionally redeemable common stock (including common stock that features
redemption rights that are either within the control of the holder or subject to
redemption upon the occurrence of uncertain events not solely within our
control) is classified as temporary equity. At all other times, common stock is
classified as stockholders' equity. Our common stock features certain redemption
rights that are considered to be outside of our 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 our balance sheet.
Net Income Per Common Share
We apply the two-class method in calculating earnings per share. Common stock
subject to possible redemption which is not currently redeemable and is not
redeemable at fair value, has been excluded from the calculation of basic net
income per common share since such shares, if redeemed, only participate in
their pro rata share of the Trust Account earnings. Our 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 our income or losses.
16
Recent Accounting Standards
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
© Edgar Online, source Glimpses