NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Note 1—Description
of Organization, Business Operations and Basis of Presentation
Montes Archimedes
Acquisition Corp. (the "Company") was incorporated in Delaware on July 6, 2020. The Company was formed for the purpose
of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
with one or more businesses (the "Business Combination"). The Company is an emerging growth company and, as such, the
Company is subject to all of the risks associated with emerging growth companies.
As of September
30, 2020, the Company had not commenced any operations. All activity for the period from July 6, 2020 (inception) through
September 30, 2020 relates to the Company's formation and the preparation for the initial public offering (the “Initial Public
Offering”) described below. The Company will not generate any operating revenues until after the completion of its initial
Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and
cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal
year end.
The Company's sponsor is Patient Square Capital LLC (the "Sponsor"). The registration statement for the Company’s Initial Public
Offering was declared effective on October 6, 2020. On October 9, 2020, the Company consummated its Initial Public Offering of 40,000,000
units (the “Units”) at $10.00 per Unit, generating gross proceeds of $400.0 million, and incurring offering costs of approximately
$22.1 million (net of reimbursement of offering costs of $520,000 from the underwriters), inclusive of $14.0 million in deferred underwriting
commissions (Note 5). The underwriters exercised the over-allotment option in full and on November 12, 2020 purchased an additional 1,071,823
Units (the “Over-Allotment Units”), generating gross proceeds of approximately $10.7 million, and incurred additional offering
costs of approximately $576,000 in underwriting fees (net of reimbursement of offering costs of approximately $14,000 from the underwriters
and inclusive of approximately $375,000 in deferred underwriting fees) (the “Over-Allotment”).
Simultaneously with the closing
of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 10,000,000 warrants
(each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of
$1.00 per Private Placement Warrant to the Sponsor, generating proceeds of $10.0 million (Note 4). Simultaneously with the closing
of the Over-allotment on November 12, 2020, the Company consummated the second closing of
the Private Placement, resulting in the purchase of an aggregate of an additional 214,365
Private Placement Warrants by the Sponsor, generating gross proceeds to the Company of approximately $214,000.
Upon the closing of the Initial Public Offering, the Over-Allotment,
and the Private Placement, approximately $410.7 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial
Public Offering and of the Private Placement Warrants in the Private Placement were placed in a trust account ("Trust Account")
located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. "government
securities," within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or
less, or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in
direct U.S. government treasury obligations, 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.
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 Placement Warrants, 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 an initial Business Combination with one or more operating businesses or assets with a
fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred
underwriting commissions and taxes payable on the interest earned on the Trust Account). However, 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 business sufficient for it not to be required to register as
an investment company under the Investment Company Act 1940, as amended (the "Investment Company Act").
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Company
will provide holders (the "Public Stockholders") of the Company's outstanding shares of Class A common stock
sold in the Initial Public Offering (the "Public Shares") 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
held in the Trust Account (initially anticipated to be $10.00 per Public Share), calculated as of two business days prior to
the initial Business Combination, including interest earned on the funds held in the trust account and not previously
released to the Company to pay the Company's taxes, net of taxes payable. The per-share amount to be distributed to Public
Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay
to the underwriters (as discussed in Note 5). The Company will proceed with a Business Combination if a majority of the
shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that
would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required by applicable law or
stock exchange rule and the Company does not decide to hold a stockholder vote for business or other reasons, the Company
will, pursuant to its amended and restated certificate of incorporation (the "Certificate of Incorporation"),
conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission ("SEC")
and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of
the transaction is required by applicable law or stock exchange rule, or the Company decides to obtain stockholder approval
for business or 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. Additionally, each Public Stockholder may elect to redeem their
Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
If the Company seeks stockholder approval in connection with a Business Combination, the initial stockholders (as defined
below) agreed to vote any Founder Shares (as defined below in Note 4) and any Public Shares held by them in favor of a
Business Combination. In addition, the initial stockholders agreed to waive their redemption rights with respect to any
Founder Shares and any Public Shares held by them in connection with the completion of a Business Combination.
The Certificate
of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with
whom such stockholder is acting in concert or as a "group" (as defined under Section 13 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), will be restricted from redeeming its shares with respect to more than
an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor and the Company's officers
and directors (the "initial stockholders") agreed, pursuant to a letter agreement with the Company, that they will not
propose any amendment to the Certificate of Incorporation (A) to modify the substance or timing of the Company's obligation
to allow redemption in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company does
not complete a Business Combination within the Combination Period (as defined below) or (B) with respect to any other provision
relating to stockholders' rights or pre-initial Business Combination activity, unless the Company provides the Public Stockholders
with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable)
divided by the number of then outstanding Public Shares.
If the Company
is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or October
9, 2022, (as such period may be extended pursuant to the Certificate of Incorporation, the "Combination Period"), the
Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but
not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the
number of the then outstanding Public Shares, which redemption will completely extinguish Public Stockholders' rights as stockholders
(including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors,
liquidate and dissolve, 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.
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The initial
stockholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder
Shares held by them 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, they will be entitled to liquidating
distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business
Combination within the Combination Period. The underwriters agreed to waive their rights to the deferred underwriting
commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination
within in 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 residual assets remaining available for distribution (including Trust Account assets) will be
only, or less than, $10.00. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to
the Company if and to the extent any claims by a third party (except for the Company's independent registered public
accounting firm) 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 (a "Target"), reduce the amount of funds in the Trust
Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the
Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions
in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third
party or Target that executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any
claims under the Company's indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). Moreover, in the event
that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the
extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will
have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers,
prospective target businesses and 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 and
Capital Resources
As of September
30, 2020, the Company had approximately $18,000 cash and a working capital deficit of approximately $497,000.
Prior to September
30, 2020, the Company’s liquidity needs were satisfied through a payment of $25,000 from the Sponsor to cover certain expenses
on behalf of the Company in exchange for the issuance of the Founder Shares (as defined below), the loan under the Note from the
Sponsor of $200,000 (see Note 4) to the Company. Subsequent to September 30, 2020, the liquidity needs had been satisfied through
the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note
on October 9, 2020. In addition, in order to finance transaction costs in connection with a Business Combination, the
Sponsor or an affiliate of the Sponsor, or certain of the Company's officers and directors may, but are not obligated to,
provide the Company Working Capital Loans (see Note 4). To date, there were no amounts outstanding under any Working Capital Loans.
Based on the foregoing,
management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the
earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be
using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge
with or acquire, and structuring, negotiating and consummating the Business Combination.
Management continues
to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable
as of the date of the financial statements. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Basis
of Presentation
The accompanying
unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted
in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the
SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the
unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for
the fair statement of the balances and results for the period presented. Operating results for the period from May 19, 2020 (inception)
through September 30, 2020 are not necessarily indicative of the results that may be expected through December 31, 2020.
The accompanying
unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto
included in the Form 8-K and the final prospectus filed by the Company with the SEC on October 16, 2020 and October 9, 2020, respectively.
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
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 an emerging growth 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 an election to opt out is irrevocable. The Company
has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has
different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised
standard at the time private companies adopt the new or revised standard.
This may make
comparison of the Company's financial statements with another public company that is neither an emerging growth company nor an
emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used.
Note 2—Summary
of Significant Accounting Policies
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 limit of $250,000. At September 30, 2020, the Company has not experienced
losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
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
had no cash equivalents as of September 30, 2020.
Financial
Instruments
The fair value
of the Company's assets and liabilities, which qualify as financial instruments under FASB ASC 820, "Fair Value Measurement"
approximates the carrying amounts represented in the balance sheet.
Use
of Estimates
The preparation
of the financial statements in conformity with U.S. 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 expenses during the reporting period. Actual results could differ from those estimates.
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Deferred
Offering Costs Associated with the Initial Public Offering
Deferred offering
costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the Initial Public
Offering and that were charged to stockholders’ equity upon the completion of the Initial Public Offering in October 2020.
Net
Loss Per Common Share
The Company complies
with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per 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 common stock
subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 1,500,000 shares of common stock
that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (Note 4). At September 30,
2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into
shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic
loss per share for the period presented.
Income
Taxes
The Company follows
the asset and liability method of accounting for income taxes under FASB ASC 740, "Income Taxes." Deferred tax assets
and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement
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. Deferred tax assets were deemed immaterial as of September 30, 2020.
FASB 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. There were no unrecognized tax benefits as of September 30, 2020. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for
the payment of interest and penalties as of September 30, 2020. 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.
Recent
Accounting Standards
The Company's
management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would
have a material effect on the accompanying financial statements.
Note 3—Initial
Public Offering
On October 9, 2020, the Company consummated its Initial Public Offering of 40,000,000 Units at $10.00 per Unit, generating gross proceeds
of $400.0 million, and incurring offering costs of approximately $22.1 million (net of reimbursement of offering costs of $520,000 from
the underwriters), inclusive of $14.0 million in deferred underwriting commissions. The Underwriters exercised the over-allotment option
in full and on November 12, 2020 purchased an additional 1,071,823 Over-Allotment Units, generating gross proceeds of approximately $10.7
million, and incurred additional offering costs of approximately $576,000 in underwriting fees (net of reimbursement of offering costs
of approximately $14,000 from the underwriters and inclusive of approximately $375,000 in deferred underwriting fees).
Each Unit consists
of one share of Class A common stock, and one-half of one redeemable warrant (each, a "Public Warrant"). Each whole
Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to
adjustment (see Note 6).
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Note 4—Related
Party Transactions
Founder
Shares
On July 23, 2020, an affiliate of the Sponsor paid an aggregate
of $25,000 for certain expenses on behalf of the Company in exchange for issuance of 14,375,000 shares of the Company's Class B
common stock, par value $0.0001 per share (the "Founder Shares"), with such shares subsequently transferred to the Sponsor.
On October 6, 2020, the Sponsor surrendered 2,875,000 shares of Class B common stock to the Company for no consideration, resulting
in a decrease of the Founder Shares from 14,375,000 shares to 11,500,000 shares. All shares and associated amounts have been retroactively
restated to reflect the share surrender. The initial stockholders agreed to forfeit up to 1,500,000 Founder Shares to the extent
that the over-allotment option is not exercised in full by the underwriters, so that the Founder Shares will represent 20.0% of
the Company's issued and outstanding shares of common stock after the Initial Public Offering. The underwriters exercised their
over-allotment option on November 12, 2020; thus, only 1,285,637 shares of Class B common stock remain subject to forfeiture.
The Initial Stockholders
agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of:
(A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination,
(x) if the last reported sale price of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock
splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day
period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes
a liquidation, merger, capital stock exchange or other similar transaction that results in all of the stockholders having the right
to exchange their common stock for cash, securities or other property.
Private
Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 10,000,000 Private Placement
Warrants at a price of $1.00 per Private Placement Warrant to the Sponsor, generating proceeds of $10.0 million. Simultaneously with the
closing of the Over-allotment on November 12, 2020, the Company consummated the second closing of the Private Placement, resulting in
the purchase of an aggregate of an additional 214,365 Private Placement Warrants by the Sponsor, generating gross proceeds
to the Company of approximately $214,000.
Each whole Private
Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share, subject to adjustment.
A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor was 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 Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable for cash (except as
described below) and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
The Sponsor agreed,
subject to limited exceptions, not to transfer, assign or sell the Private Placement Warrants until 30 days after the completion
of the initial Business Combination.
Related
Party Loans
On July 23,
2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering
pursuant to a promissory note (the "Note"). This loan was non-interest bearing and payable upon the completion of the
Initial Public Offering. As of September 30, 2020, the Company borrowed $200,000 under the Note. The Note was fully repaid on October
9, 2020.
In addition,
in order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the
Sponsor or an affiliate of the Sponsor, or certain of the Company's officers and directors may, but are not obligated to,
loan the Company funds as may be required ("Working Capital Loans"). If the Company completes a Business
Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the
Company. Otherwise, the Working Capital Loans could 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. The
Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender's discretion, up
to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a
price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. 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. To date, the Company had no borrowings under the Working Capital Loans.
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Administrative
Services Agreement
The Company entered
into an agreement that will provide that, commencing on October 7, 2020 through the earlier of consummation of the initial Business
Combination and the liquidation, the Company will pay an affiliate of the Sponsor $10,000 per month for office space and administrative
support services.
Note 5—Commitments &
Contingencies
Registration
Rights
The holders of
the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any
Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion
of Working Capital Loans) are entitled to registration rights pursuant to the registration rights agreement. The holders of these
securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities.
In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed
subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with
the filing of any such registration statements.
Underwriting
Agreement
The underwriters
were entitled to an underwriting discount of $0.20 per unit, or $8.0 million in the aggregate, paid upon the closing of the
Initial Public Offering. In addition, $0.35 per unit, or $14.0 million in the aggregate will be payable to the underwriters
for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
The underwriters agreed to make a payment to the Company in an amount of 0.13% of the gross proceeds of the Initial Public Offering,
or $520,000, to reimburse certain of offering expenses. The Company received such reimbursement on October 27, 2020.
Upon closing
of the Over-allotment on November 12, 2020, the underwriters received approximately $214,000 in fees paid upfront and eligible
for an additional deferred underwriting commissions of approximately $375,000. In addition, the underwriters agreed to make an
addition payment to the Company in an amount of 0.13% of the gross proceeds of the Over-allotment, or approximately $14,000, to
reimburse certain of offering expenses.
Note 6—Stockholders’
Equity
Class A
Common Stock—The Company is authorized to issue 400,000,000 shares of Class A common stock with a par value
of $0.0001 per share. As of September 30, 2020, there
were no shares of Class A common stock issued or outstanding.
Class B Common Stock—The Company is authorized to issue 40,000,000 shares of Class B common stock with a par value of $0.0001 per
share. On July 23, 2020, an affiliate of the Sponsor paid an aggregate of $25,000 for certain expenses on behalf of the Company in exchange
for issuance of 14,375,000 shares of Class B common stock, with such shares subsequently transferred to the Sponsor. On October 6, 2020,
the Sponsor surrendered 2,875,000 shares of Class B common stock to the Company for no consideration, resulting in a decrease of the outstanding
Class B common stock from 14,375,000 shares to 11,500,000 shares. All shares and associated amounts have been retroactively restated to
reflect the share surrender. Of these, an aggregate of up to 1,500,000 shares of Class B common stock that are subject to forfeiture to
the Company by the initial stockholders for no consideration to the extent that the underwriters' over- allotment option is not exercised
in full or in part, so that the number of Founder Shares will equal 20% of the Company's issued and outstanding shares of common stock
after the Initial Public Offering. The underwriters exercised their over-allotment option on November 12, 2020; thus, only 1,285,637
shares of Class B common stock remain subject to forfeiture.
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Stockholders of
record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of our Class A
common stock and holders of our Class B common stock will vote together as a single class on all matters submitted to a vote
of our stockholders except as required by law.
The Class B
common stock will automatically convert into Class A common stock on the first business day following the completion of the
initial Business Combination at a ratio such that the number of shares of Class A common stock issuable upon conversion of
all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of shares
of Class A common stock issued and outstanding upon completion of the Initial Public Offering, plus (ii) the sum of (a) the
total number of shares of Class A common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked
securities or rights issued or deemed issued, by the Company in connection with or in relation to the completion of the initial
Business Combination, excluding any shares of Class A common stock or equity-linked securities exercisable for or convertible
into shares of Class A common stock issued, or to be issued, to any seller in the initial Business Combination and any Private
Placement Warrants issued to the Sponsor upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed
by Public Stockholders in connection with the initial Business Combination. In no event will the shares of Class B common
stock convert into shares of Class A common stock at a rate of less than one to one.
Preferred
Stock—The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such
designations, voting and other rights and preferences as may be determined from time to time by the Company's board of directors.
As of September 30, 2020, there were no shares of preferred stock issued or outstanding.
Warrants—Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the
Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days
after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering; provided
in each case that the Company has an effective registration statement under the Securities Act covering the shares of Class A
common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are
registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder
(or holders are permitted to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement
as a result of (i) the Company's failure to have an effective registration statement by the 60th business day after the
closing of the initial Business Combination or (ii) a notice of redemption described below under "Redemption of warrants
when the price per Class A common stock equals or exceeds $10.00"). If and when the warrants become redeemable by the
Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities
for sale under all applicable state securities laws.
The Company is
not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, the Company
has agreed that as soon as practicable, but in no event later than twenty business days after the closing of the initial Business
Combination, the Company will use its commercially reasonable efforts to file with the SEC and have an effective registration statement
covering the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating
to those shares of Class A common stock until the warrants expire or are redeemed. If a registration statement covering the
Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing
of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during
any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a "cashless
basis" in accordance with Section 3(a)(9) of the Securities Act or another exemption.
The warrants
will have an exercise price of $11.50 per share and will expire five years after the completion of a Business Combination or
earlier upon redemption or liquidation. If (x) the Company issues additional shares of Class A common stock or
equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at
an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or
effective issue price to be determined in good faith by the Company and, (i) in the case of any such issuance to the
Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as
applicable, prior to such issuance, and (ii) to the extent that such issuance is made to the Sponsor or its affiliates,
without taking into account the transfer of Founder Shares or Private Placement Warrants (including if such transfer is
effectuated as a surrender to the Company and subsequent reissuance by the Company) by the Sponsor in connection with such
issuance) (the "Newly Issued Price"), (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 the initial Business Combination on the
date of the completion of the initial Business Combination (net of redemptions), and (z) the volume-weighted average
trading price of Class A common stock during the 20 trading day period starting on the trading day prior to the day on
which the Company completes its initial 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 higher of the
Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices described under
"Redemption of warrants when the price per Class A common stock equals or exceeds $18.00" and "Redemption
of warrants when the price per Class A common stock equals or exceeds $10.00" will be adjusted (to the nearest
cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Private Placement
Warrants will be identical to the Public Warrants, except that the Private Placement Warrants (including the Class A common
stock issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days
after the completion of the initial Business Combination and they will not be redeemable by the Company so long as they are held
by the Sponsor or its permitted transferees.
Redemption
of warrants when the price per share of our Class A common stock equals or exceeds $18.00:
Once the warrants
become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement
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 a minimum of 30 days' prior written notice of redemption; and
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if, and only if, the last reported sale price of Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the "Reference Value") equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like).
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However, in this
case, the Company will not redeem the warrants unless an effective registration statement under the Securities Act covering the
Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares
of Class A common stock is available throughout the 30-day redemption period. Any such exercise would not be on a "cashless"
basis and would require the exercising warrant holder to pay the exercise price for each warrant being exercised.
Redemption
of warrants when the price per share of our Class A common stock equals or exceeds $10.00
Once the warrants
become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement
Warrants):
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in whole and not in part;
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at $0.10 per warrant upon a minimum of 30 days' prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the "fair market value" of Class A common stock;
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if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like); and
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if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), the Private Placement Warrants must also concurrently be called for redemption on the same terms (except as described herein with respect to a holder's ability to cashless exercise its warrants) as the outstanding Public Warrants, as described above.
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MONTES ARCHIMEDES
ACQUISITION CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The "fair
market value" of Class A common stock shall mean the volume-weighted average price of Class A common stock for the
10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event
will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Class A common stock
per warrant (subject to adjustment).
In no event will
the Company be required to net cash settle any warrant. 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.
Note 7—Subsequent
Events
The Company received
the reimbursement of $520,000 from the underwriters for certain of offering expenses on October 27, 2020.
The Company evaluated subsequent events
and transactions that occurred up to the date unaudited condensed financial statements were available to be issued. Based upon
this review, the Company determined that, except as disclosed above and in Note 3 and 4, there have been no events that have occurred
that would require adjustments to the disclosures in the unaudited condensed financial statements.
Management has evaluated subsequent events
and transactions that occurred after the balance sheet date through the date the balance sheet was available for issuance. Based
upon this review, except as noted above, the Company did not identify any subsequent events that would have required adjustment
or disclosure in the financial statements.