NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 1.
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Pivotal Investment Corporation II (the Company) was incorporated in Delaware on
March 20, 2019. 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 or entities (the Business
Combination).
The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. However, the
Company is currently focusing its search on companies in North America in industries ripe for disruption from continuously evolving digital technology and the resulting shift in distribution patterns and consumer purchase behavior. 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 December 31, 2019, the Company had not commenced any operations. All activity through December 31, 2019 relates to the Companys
formation, its initial public offering (the Initial Public Offering), which is described below, and after the Initial Public Offering, identifying a target company for a Business Combination.
The registration statement for the Companys Initial Public Offering was declared effective by the Securities and Exchange Commission (the
SEC) on July 11, 2019. On July 16, 2019, the Company consummated the Initial Public Offering of 23,000,000 units (Units and, with respect to the shares of Class A common stock included in the Units sold, the
Public Shares), including 3,000,000 Units subject to the underwriters over-allotment option, generating total gross proceeds of $230,000,000, which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 4,233,333 warrants (the Private
Placement Warrants) at a price of $1.50 per Private Placement Warrant in a private placement to Pivotal Investment Holdings II LLC (the Sponsor), generating total gross proceeds of $6,350,000, which is described in Note 4.
Following the closing of the Initial Public Offering on July 16, 2019, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of
the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the Trust Account) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16)
of the Investment Company Act of 1940, as amended (the Investment Company Act), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the
conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust
Account, as described below.
Transaction costs amounted to $13,185,704, consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred
underwriting fees and $535,704 of other costs. In addition, at December 31, 2019, cash of $624,943 was held outside of the Trust Account and is available for working capital purposes.
The Companys 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. The Company must complete an initial Business Combination having an aggregate fair market
value of at least 80% of the assets held in the Trust Account (net of amounts previously disbursed to management for tax obligations and excluding the amount of deferred underwriting discounts held in 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. There is no assurance that the Company will be able to successfully effect a Business Combination.
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
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