Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large
accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report
on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
As of June 30, 2020, the last business day of the registrant’s
most recently completed second fiscal quarter, the registrant’s securities were not publicly traded. The registrant’s units
began trading on The Nasdaq Capital Market (“Nasdaq”) on September 25, 2020 and the registrant’s Class A
ordinary shares, par value $0.0001 (the “Class A ordinary shares”) and warrants began trading on the Nasdaq on November 16,
2020. The aggregate market value of the ordinary shares outstanding, other than shares held by persons who may be deemed affiliates of
the registrant, computed by reference to the closing sales price for the ordinary shares on December 31, 2020, as reported on the
Nasdaq, was $323,520,000 (based on the closing sales price of the Class A ordinary shares on December 31, 2020 of $10.11).
As of March 30, 2021, 32,000,000 Class A ordinary shares,
par value $0.0001, and 8,000,000 Class B ordinary shares, par value $0.0001, were issued and outstanding.
Vector Acquisition Corporation (the
“company,” “we”, “our” or “us”) is filing this Annual Report on Form 10-K/A (Amendment
No. 1) (this “Amendment”) to amend our Annual Report on Form 10-K for the period ended December 31, 2020, originally filed
with the Securities and Exchange Commission (the “SEC”) on March 31, 2021 (the “Original Filing”), to restate
our financial statements for the period ended December 31, 2020. We are also restating our financial statements as of September
30, 2020 and September 29, 2020 and for the period ended September 30, 2020 in this Amendment, including describing the restatement
and its impact on previously reported amounts.
The restatement results from the company’s
prior accounting for its outstanding warrants issued in connection with its initial public offering in September 2020 as components of
equity instead of as derivative liabilities. The warrant agreement governing the warrants includes a provision that provides for
potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant
agreement includes a provision that in the event of a tender or exchange offer made to and accepted by holders of more than 50% of the
outstanding shares of a single class of ordinary shares, all holders of the warrants would be entitled to receive cash for their warrants
(the “tender offer provision”). In other words, in the event of a qualifying cash tender offer (which could be outside the
control of the Company), all warrant holders would be entitled to cash, while only certain of the holders of the underlying ordinary shares
would be entitled to cash.
Upon review of the “Staff Statement on Accounting and Reporting Considerations
for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” promulgated by the SEC on April 12, 2021 (the
“SEC Staff Statement”), the company’s management further evaluated the warrants under Accounting Standards Codification
(“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability
treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as
a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section
815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise
price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation,
the audit committee of the board of directors of the company, in consultation with management, concluded that the company’s warrants
are not indexed to the company’s ordinary shares in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument
is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the
audit committee, in consultation with management, concluded the tender offer provision included in the warrant agreement fails the “classified
in shareholders’ equity” criteria as contemplated by ASC Section 815-40-25.
As a result of the above, the company
should have classified the warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment,
the company is required to measure the fair value of the warrants at the end of each reporting period and recognize changes in the fair
value from the prior period in the company’s operating results for the current period.
The company’s accounting for the warrants
as components of equity instead of as derivative liabilities did not have any effect on the company’s previously reported operating
expenses, cash flows or cash.
In connection with the restatement,
the company’s management reassessed the effectiveness of its disclosure controls and procedures for the periods affected by the
restatement. As a result of that reassessment and in light of the SEC Staff Statement, the company’s management determined that
its disclosure controls and procedures for such periods were not effective with respect to the classification of the company’s warrants
as components of equity instead of as derivative liabilities. For more information, see Item 9A included in this Amendment.
The company has not amended its previously
filed Current Report on Form 8-K or Quarterly Report on Form 10-Q for the period affected by the restatement. The financial information
that has been previously filed or otherwise reported for these periods is superseded by the information in this Annual Report on Form
10-K, and the financial statements and related financial information contained in such previously filed reports should no longer be relied
upon.
The restatement is more fully described
in Note 2 of the notes to the financial statements included herein.
In addition, as required by Rule 12b-15
under the Securities Exchange Act of 1934, as amended, new certifications by the company’s principal executive officer and principal
financial officer are filed as exhibits (in Exhibits 31.1 to 32.2) to this Amendment under Item 15 of Part IV hereof.
Except as described above, this Amendment
does not amend, update or change any other items or disclosures contained in the Original Filing, and accordingly, this Amendment does
not reflect or purport to reflect any information or events occurring after the original filing date or modify or update those disclosures
affected by subsequent events. Accordingly, this Amendment should be read in conjunction with the Original Filing and the company’s
other filings with the SEC. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Original
Filing. Unless the context otherwise requires, references to “warrants” in this Amendment refers to both the company’s
public warrants and private placement warrants.
This Amendment, including, without limitation,
statements under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Exchange Act. These forward-looking statements can be identified by the use of forward-looking
terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,”
“plans,” “may,” “might,” “will,” “potential,” “possible,” “projects,”
“predicts,” “continue,” “could,” “would,” or “should,” or, in each case, their
negative or other variations or comparable terminology. However, the absence of these words does not mean that a statement is not forward-looking.
In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including
any underlying assumptions, are forward-looking statements. There can be no assurance that actual results will not materially differ from
expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or
other business combination and any other statements that are not statements of current or historical facts. These statements are based
on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited
to:
The forward-looking statements contained in
this Amendment are based on our current expectations and beliefs concerning future developments and their potential effects on us. There
can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve
a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described under “Item 1A. Risk Factors” in the Original Filing. Should one or more of
these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects
from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Vector Acquisition Corporation (the “Company”) is
a blank check company incorporated as a Cayman Islands exempted company on July 28, 2020. The Company was incorporated for the purpose
of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more
businesses or entities (a “Business Combination”).
The Company is not limited to a particular industry or sector
for purposes of consummating a 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 December 31, 2020, the Company had not commenced any
operations. All activity for the period from July 28, 2020 (inception) through December 31, 2020 relates to the Company’s
formation, the initial public offering (“Initial Public Offering”), which is described below, and, subsequent to the Initial
Public Offering, identifying a target company for a Business Combination and activities in connection with the proposed acquisition of
Rocket Lab USA, Inc., a Delaware corporation (“Rocket Lab”) (see Note 11). 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 statement for the Company’s Initial Public
Offering was declared effective on September 24, 2020. On September 29, 2020 the Company consummated the Initial Public Offering
of 30,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public
Shares”), at $10.00 per Unit, generating gross proceeds of $300,000,000 which is described in Note 4.
Simultaneously with the closing of the Initial Public Offering,
the Company consummated the sale of 5,333,333 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private
Placement Warrant in a private placement to Vector Acquisition Partners, L.P. (the “Sponsor”), generating gross proceeds of
$8,000,000, which is described in Note 5.
In October 2020, the underwriters notified the Company of their
intention to partially exercise their over-allotment option on October 20, 2020. As such, on October 20, 2020, the Company consummated
the sale of an additional 2,000,000 Units, at $10.00 per Unit, and the sale of an additional 266,667 Private Placement Warrants, at $1.50
per Private Warrant, generating total gross proceeds of $20,400,000.
Transaction costs amounted to $18,252,382, consisting of $6,400,000
of underwriting fees, $11,200,000 of deferred underwriting fees and $652,382 of other offering costs.
Following the closing of the Initial Public Offering on September 29,
2020 and the underwriters’ partial exercise of their over-allotment on October 20, 2020, an amount of $320,000,000 ($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 a money market fund investing solely in U.S. Treasuries
and meeting certain conditions under Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”),
as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution
of the funds in the Trust Account to the Company’s shareholders, 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. The stock exchange
listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal
to at least 80% of the assets held in the Trust Account (excluding the amount of any deferred underwriting discount held in the Trust
Account and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business
Combination company owns or acquires 50% or more of the issued and 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. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide the holders of the public shares (the
“Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business
Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of
a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer
will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to
the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business
Combination (initially $10.00 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number
of then issued and outstanding public shares, subject to certain limitations as described in the final prospectus relating to our initial
public offering. The per-share amount to be distributed to the Public Shareholders who properly redeem their shares will not be reduced
by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). There will be no redemption
rights upon the completion of a Business Combination with respect to the Company’s warrants.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
The Company will proceed with a Business Combination only if the
Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution
under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend
and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder
vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association,
conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender
offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing
a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to
vote the Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of
approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if
they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder
approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder,
together with any affiliate of such shareholder or any other person with whom such shareholder 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% of the Public Shares without the Company’s prior written
consent.
The Sponsor has agreed (a) to waive its redemption rights
with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not
to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing
of the Company’s obligation to allow redemption in connection with the Company’s 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
(ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless
the Company provides the Public Shareholders 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 earned on the
Trust account and not previously released to pay taxes, divided by the number of then issued and outstanding Public Shares.
The Company will have until September 29, 2022 to consummate
a Business Combination (the “Combination Period”). However, if the Company has not completed a Business Combination within
the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but not more than ten business days thereafter, redeem 100% of 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 and not previously released to us
to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding
Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right
to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each
case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless
if the Company fails to complete a Business Combination within the Combination Period.
The Sponsor has agreed to waive its rights to liquidating distributions
from the Trust Account with respect to the Founder Shares it will receive if the Company fails to complete a Business Combination within
the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be
entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination
Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 7) held in the Trust Account
in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will
be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the
event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than
the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held in the Trust Account, the
Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than 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, reduce the amount of funds in the Trust Account to below the
lesser of (1) $10.00 per Public Share and (2) 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 trust assets, in each case
net of the interest that may be withdrawn to pay taxes. This liability will not apply to any claims by a third party who executed a waiver
of any and all rights to seek access to the Trust Account and as 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”). In the event that an executed waiver is deemed to be unenforceable against a third party, 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 (other than the Company’s
independent registered public accounting firm), 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.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL
STATEMENTS
The Company previously accounted for its outstanding Public
Warrants (as defined in Note 4) and Private Placement Warrants issued in connection with its Initial Public Offering (see Note 5) as components
of equity instead of as derivative liabilities. The warrant agreement governing the warrants includes a provision that provides for
potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant
agreement includes a provision that in the event of a tender or exchange offer made to and accepted by holders of more than 50% of the
outstanding shares of a single class of ordinary shares, all holders of the warrants would be entitled to receive cash for their warrants
(the “tender offer provision”).
In connection with the release of the Securities and Exchange
Commission’s “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies
(“SPACs”)” on April 12, 2021, the Company’s management further evaluated the warrants under Accounting Standards
Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity
versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may
be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under
ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to
the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s
evaluation, in consultation with the Company’s audit committee, the Company’s management concluded that the Company’s
Private Placement Warrants are not indexed to the Company’s ordinary shares in the manner contemplated by ASC Section 815-40-15
because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based
on management’s evaluation, in consultation with the Company’s audit committee, the Company’s management concluded the
tender offer provision included in the warrant agreement fails the “classified in shareholders’ equity” criteria as
contemplated by ASC Section 815-40-25.
As a result of the above, the Company should have classified
the warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is
required to measure the fair value of the warrants at the end of each reporting period and recognize changes in the fair value from the
prior period in the Company’s operating results for the current period.
The Company’s accounting for the warrants as components
of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported operating expenses,
cash flows or cash.
|
|
As
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
|
|
|
As
|
|
|
|
Reported
|
|
|
Adjustments
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of September 29, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
Warrant Liability
|
|
$
|
—
|
|
|
$
|
12,573,333
|
|
|
$
|
12,573,333
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
285,853,760
|
|
|
|
(12,573,333
|
)
|
|
|
273,280,427
|
|
Class A Ordinary Shares
|
|
|
141
|
|
|
|
126
|
|
|
|
267
|
|
Additional Paid-in Capital
|
|
|
5,017,854
|
|
|
|
(126
|
)
|
|
|
5,017,728
|
|
Shareholders’ Equity
|
|
|
5,000,010
|
|
|
|
0
|
|
|
|
5,000,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of September 30, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability
|
|
$
|
—
|
|
|
$
|
13,340,000
|
|
|
$
|
13,340,000
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
285,851,910
|
|
|
|
(13,340,000
|
)
|
|
|
275,511,910
|
|
Class A Ordinary Shares
|
|
|
141
|
|
|
|
134
|
|
|
|
275
|
|
Additional Paid-in Capital
|
|
|
5,019,704
|
|
|
|
766,533
|
|
|
|
5,786,237
|
|
Accumulated Deficit
|
|
|
(20,698
|
)
|
|
|
(766,667
|
)
|
|
|
(787,365
|
)
|
Shareholders’ Equity
|
|
|
5,000,010
|
|
|
|
0
|
|
|
|
5,000,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of December 31, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability
|
|
$
|
—
|
|
|
$
|
24,562,667
|
|
|
$
|
24,562,667
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
304,820,000
|
|
|
|
(24,562,670
|
)
|
|
|
280,257,330
|
|
Class A Ordinary Shares
|
|
|
152
|
|
|
|
245
|
|
|
|
397
|
|
Additional Paid-in Capital
|
|
|
5,351,666
|
|
|
|
11,989,092
|
|
|
|
17,340,758
|
|
Accumulated Deficit
|
|
|
(352,617
|
)
|
|
|
(11,989,334
|
)
|
|
|
(12,341,951
|
)
|
Shareholders’ Equity
|
|
|
5,000,001
|
|
|
|
3
|
|
|
|
5,000,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from July 28, 2020 (inception) to September 30, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant liability
|
|
$
|
—
|
|
|
$
|
766,667
|
|
|
$
|
766,667
|
|
Net loss
|
|
|
(20,698
|
)
|
|
|
(766,667
|
)
|
|
|
(787,365
|
)
|
Basic and diluted net loss per share, Class B
|
|
|
(0.00
|
)
|
|
|
(0.10
|
)
|
|
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from July 28, 2020 (inception) to December 31, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant liability
|
|
$
|
—
|
|
|
$
|
(11,989,334
|
)
|
|
$
|
(11,989,334
|
)
|
Net loss
|
|
|
(352,617
|
)
|
|
|
(11,989,334
|
)
|
|
|
(12,341,951
|
)
|
Basic and diluted net loss per share, Class B
|
|
|
(0.05
|
)
|
|
|
(1.55
|
)
|
|
|
(1.60
|
)
|
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented in accordance
with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations
of the SEC.
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 auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act of 2002, 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
shareholder 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 statements 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 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 December 31,
2020.
Marketable Securities Held in Trust Account
The Company classifies its U.S. Treasury and equivalent securities
as held-to-maturity in accordance with ASC Topic 320 “Investments — Debt and Equity Securities.” Held-to-maturity securities
are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded
at amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
Warrant Liabilities
The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment
considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant
to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants
are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement”
in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while
the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued
or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities
at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the
warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the warrants was
estimated using a Monte Carlo simulation approach (see Note 10) while the December 31, 2020 fair value of the warrants
was based on the public trading price of the warrants.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and
are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are
either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s
ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence
of uncertain future events. Accordingly, at December 31, 2020, Class A ordinary shares subject to possible redemption are presented
as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Income Taxes
ASC Topic 740, Income Taxes, 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’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2020, there
were no unrecognized tax benefits and no amounts accrued for interest and penalties. 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 considered to be an exempted Cayman Islands company
with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in
the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net Loss Per Ordinary Share
The Company complies with accounting and disclosure requirements
of FASB ASC Topic 260, “Earnings Per Share”. Net loss per ordinary share is computed by dividing net loss by the weighted
average number of Class A ordinary shares outstanding for the period. The calculation of diluted loss per ordinary share does not
consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) Private Placement Warrants
since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The warrants are exercisable to purchase 16,266,667 shares of Class A ordinary shares in the aggregate.
The Company’s statements of operations includes a presentation
of income (loss) per ordinary share for ordinary shares subject to possible redemption in a manner similar to the two-class method of
income (loss) per share. Net income per ordinary share, basic and diluted, for Class A redeemable ordinary shares is calculated by
dividing the interest income earned on the Trust Account, by the weighted average number of Class A redeemable ordinary shares outstanding
since original issuance. Net loss per ordinary share, basic and diluted, for Class B non-redeemable ordinary shares is calculated
by dividing the net loss, adjusted for income attributable to Class A redeemable ordinary shares, by the weighted average number
of Class B non-redeemable ordinary shares outstanding for the period. Class B non-redeemable ordinary shares includes the Founder
Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
The following table reflects the calculation of basic and diluted
net loss per ordinary share (in dollars, except per share amounts):
|
|
For the Period
from
July 28,
2020
(inception)
Through
December 31,
2020
|
|
Redeemable Class A Ordinary Shares
|
|
|
|
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares
|
|
|
|
Interest Income
|
|
$
|
4,846
|
|
|
|
|
|
|
Net Earnings
|
|
$
|
4,846
|
|
Denominator: Weighted Average Redeemable Class A Ordinary Shares
|
|
|
|
|
Redeemable Class A Ordinary Shares, Basic and Diluted
|
|
|
31,553,191
|
|
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares
|
|
$
|
0.00
|
|
|
|
|
|
|
Non-Redeemable Class B Ordinary Shares
|
|
|
|
|
Numerator: Net Loss minus Redeemable Net Earnings
|
|
|
|
|
Net Loss
|
|
$
|
(12,341,951
|
)
|
Redeemable Net Earnings
|
|
$
|
(4,846
|
)
|
|
|
|
|
|
Non-Redeemable Net Loss
|
|
$
|
(12,346,797
|
)
|
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares
|
|
|
|
|
Non-Redeemable Class B Ordinary Shares, Basic and Diluted(1)
|
|
|
7,732,484
|
|
Loss/Basic and Diluted Non-Redeemable Class B Ordinary Shares
|
|
$
|
(1.60
|
)
|
(1)
As of December 31, 2020, basic and diluted shares are the same as there are no non-redeemable securities that are dilutive to
the shareholders.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository
Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed
to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities,
which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented
in the Company’s balance sheet, primarily due to their short-term nature.
As of December 31, 2020, the carrying values of cash, accounts
payable and accrued expenses approximate their fair values due to the short-term nature of the instruments. The Company’s portfolio
of marketable securities held in the Trust Account is comprised of investments in U.S. Treasury securities with an original maturity of
185 days or less. The fair value for trading securities is determined using quoted market prices in active markets.
Recent Accounting Standards
Management does not believe that any recently issued, but not
yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE 4 — INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold 30,000,000 Units,
at a purchase price of $10.00 per Unit. In connection with the underwriters’ partial exercise of the over-allotment option on October 20,
2020, the Company sold an additional 2,000,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary
share and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase
one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 9).
NOTE 5 — PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering,
the Sponsor purchased an aggregate of 5,333,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate
purchase price of $8,000,000. In connection with the underwriters’ partial exercise of the over-allotment option on October 20,
2020, the Company sold an additional 266,667 Private Placement Warrants, at a purchase price of $1.50 per Private Placement Warrant, for
an aggregate purchase price of $400,000. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at
a price of $11.50 per share, subject to adjustment (see Note 9). A portion of the proceeds from the Private Placement Warrants 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 Placement Warrants will be used to fund the redemption of the Public
Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 6 — RELATED PARTY TRANSACTIONS
Founder Shares
On July 30, 2020, the Sponsor paid $25,000 to cover certain
offering costs of the Company in consideration for 8,625,000 Class B ordinary shares (the “Founder Shares”). The Founder
Shares included an aggregate of up to 1,125,000 shares that were subject to forfeiture depending on the extent to which the underwriters’
over-allotment option was exercised, so that the number of Founder Shares would equal, on an as-converted basis, approximately 20% of
the Company’s issued and outstanding ordinary shares after the Initial Public Offering. In connection with the underwriters’
partial exercise of the over-allotment option and the forfeiture of the remaining over-allotment option, 625,000 Founder Shares were forfeited
and 500,000 Founder Shares are no longer subject to forfeiture resulting in an aggregate of 8,000,000 Founder Shares outstanding at October 20,
2020.
The Sponsor has agreed, subject to limited exceptions, not to
transfer, assign or sell any of the Founder Shares until the earliest of: (A) one year after the completion of a Business Combination
and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds
$12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and the like)
for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the
date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Public
Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Administrative Services Agreement
The Company entered into an agreement, commencing on September 24,
2020, to pay an affiliate of the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion
of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For period from July 28, 2020 (inception)
through December 31, 2020, the Company incurred $32,000 in fees for these services, of which such amount is included in accrued expenses
in the accompanying balance sheet.
Promissory Note — Related Party
On July 30, 2020, the Company issued an unsecured promissory
note (the “Promissory Note”) to the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount
of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2020 and (ii) the
completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $300,000 was repaid at the closing of
the Initial Public Offering on September 29, 2020.
Related Party Loans
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, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by
promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion,
up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.50 per warrant. Such
warrants would be identical to the Private Placement Warrants. 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. As of December 31, 2020, the Company had no outstanding borrowings under the Working
Capital Loans.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE 7 — COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 global
pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial
position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date
of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration and Shareholders Rights
Pursuant to a registration and shareholder rights agreement entered
into on September 24, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon
conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants
and warrants that may be issued upon conversion of the Working Capital Loans) will be entitled to registration rights. The holders of
these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities.
In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent
to the completion of a Business Combination. However, the registration and shareholder rights agreement provides that the Company will
not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period.
Underwriting Agreement
The underwriters are entitled to a deferred fee of $0.35 per Unit,
or $11,200,000 in the aggregate. 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.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE 8 — SHAREHOLDERS’ EQUITY
Preference Shares — The Company is authorized
to issue 1,000,000 preference shares with a par value of $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. At December 31, 2020, there were no preference
shares issued or outstanding.
Class A Ordinary Shares — The Company
is authorized to issue 450,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary
shares are entitled to one vote for each share. At December 31, 2020, there were 3,974,267 Class A ordinary shares issued and
outstanding, excluding 28,025,733 Class A ordinary shares subject to possible redemption.
Class B Ordinary Shares — The Company
is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary
shares are entitled to one vote for each share. At December 31, 2020, there were 8,000,000 Class B ordinary shares issued and
outstanding.
Only holders of the Class B ordinary shares will have the
right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and Class B
ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.
The Class B ordinary shares will automatically convert into
Class A ordinary shares at the time of a Business Combination or earlier at the option of the holders thereof at a ratio such that
the number of Class A ordinary shares 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 ordinary shares issued and outstanding upon completion of the Initial Public Offering,
plus (ii) the total number of Class A ordinary shares 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 consummation of a
Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A
ordinary shares issued, deemed issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued
to the Sponsor, its affiliates or any member of the Company’s management team upon conversion of Working Capital Loans. In no event
will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE
9 — DERIVATIVE WARRANT LIABILITIES
Public Warrants may only be exercised for a whole number of
shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later
of (a) 30 days after the completion of a Business Combination and (b) one year from the closing of the Initial Public Offering.
The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A
ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration
statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus
relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from
registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share
upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or
deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no
event later than 20 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file
with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon
exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60
business days after the closing of a Business Combination, and to maintain the effectiveness of such registration statement and a current
prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement;
provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company
may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance
with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain
in effect a registration statement, but it will use its commercially reasonable efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable
upon exercise of the warrants is not effective by the 60th day after the closing of a 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, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per Class A ordinary
share equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described
with respect to the Private Placement Warrants):
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per warrant;
|
|
●
|
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
|
|
●
|
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
|
If and when the warrants become redeemable by the Company, the
Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable
state securities laws.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
Redemption of warrants when the price per Class A ordinary
share equals or exceeds $10.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants:
|
●
|
in whole and not in part;
|
|
●
|
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 based on the redemption date and the fair market value of the Class A ordinary shares;
|
|
●
|
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
|
|
●
|
if the closing price of the Class A ordinary shares 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 is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
If the Company calls the Public Warrants for redemption, as
described above, any holder that wishes to exercise the Public Warrants may do so on a “cashless
basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public
Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization,
reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of
ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public
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 Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will
they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants.
Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A
ordinary shares 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 Class A ordinary share (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 or its affiliates,
without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to 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 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 its Class A ordinary shares during the 20 trading day
period starting on the trading day prior to the day on which the Company consummates its 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, the $18.00 per share redemption trigger price will be adjusted (to the nearest
cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price
will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants
included in the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares
issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after
the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be
exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or
their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted
transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the
Public Warrants.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE 10 - FAIR VALUE MEASUREMENTS
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:
|
Level 1:
|
|
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.
|
|
|
|
|
Level 2:
|
|
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.
|
|
|
|
|
Level 3:
|
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
At December 31, 2020, assets held in the Trust Account were
comprised of $320,004,846 in money market funds which are invested primarily in U.S. Treasury Securities. During the year ended December 31,
2020, the Company did not withdraw any interest income from the Trust Account.
The following table presents information about the Company’s
assets that are measured at fair value on a recurring basis at December 31, 2020 and indicates the fair value hierarchy of the valuation
inputs the Company utilized to determine such fair value:
|
|
|
|
|
December 31,
|
|
|
|
Level
|
|
|
2020
|
|
Assets:
|
|
|
|
|
|
|
Cash and marketable securities held in Trust Account
|
|
|
1
|
|
|
$
|
320,004,846
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
|
1
|
|
|
$
|
16,106,667
|
|
Warrant Liability – Private Placement Warrants
|
|
|
3
|
|
|
$
|
8,456,000
|
|
The warrants are accounted for as liabilities in accordance
with ASC 815-40 and are presented within warrant liabilities on our consolidated balance sheet. The warrant liabilities are measured at
fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities
in the consolidated statement of operations.
Initial Measurement
The Company established the initial fair value for the
warrants on September 29, 2020, the date of the Company’s Initial Public Offering, using a Monte Carlo simulation model. The Company
allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A ordinary shares and one-third
of one Public Warrant) and (ii) the sale of Private Placement Warrants, first to the warrants based on their fair values as determined
at initial measurement, with the remaining proceeds recorded as Class A ordinary shares subject to possible redemption, and Class A ordinary
shares based on their relative fair values recorded at the initial measurement date. The warrants were classified as Level 3 at the initial
measurement date due to the use of unobservable inputs.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
The key inputs into the Monte Carlo simulation model were
as follows at their measurement dates:
Input
|
|
September 29,
2020
(Initial
Measurement)
|
|
Risk-free interest rate
|
|
|
0.3
|
%
|
Expected term to initial business combination (years)
|
|
|
0.6
|
|
Expected volatility
|
|
|
15.0
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Fair value of Units
|
|
$
|
10.12
|
|
On September 29, 2020, the Private Placement Warrants and Public
Warrants were determined to be $0.82 per warrant for aggregate values of $4.4 million and $8.2 million, respectively.
Subsequent Measurement
The
warrants are measured at fair value on a recurring basis. The subsequent measurement of the warrants as of September 30, 2020 is
classified as Level 3 due to the use of unobservable inputs. The subsequent measurement of the Public Warrants as of December 31,
2020 is classified as Level 1 due to the use of an observable market quote in an active market and the subsequent measurement of the Private Placement Warrants as December 31, 2020 is classified Level 3 due to the use of unobservable
inputs.
As
of September 30, 2020, the aggregate value of the Private Placement Warrants and Public Warrants was $4.9 million and $9.3 million, respectively.
Input
|
|
September 30,
2020
|
|
Risk-free interest rate
|
|
|
0.3
|
%
|
Expected term to initial business combination (years)
|
|
|
0.6
|
|
Expected volatility
|
|
|
15.0
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Fair value of Units
|
|
$
|
10.14
|
|
As of December 31, 2020, the aggregate values of the Private
Placement Warrants and Public Warrants were $8.5 million and $16.1 million, respectively.
The following table presents the changes in the fair value of
warrant liabilities:
|
|
Private Placement
|
|
|
Level
|
|
Public
|
|
|
Level
|
|
Warrant Liabilities
|
|
Fair value as of July 28, 2020 (inception)
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Initial measurement on September 29, 2020
|
|
|
4,373,333
|
|
|
3
|
|
|
8,200,000
|
|
|
3
|
|
|
12,573,333
|
|
Change in valuation inputs or other assumptions
|
|
|
266,667
|
|
|
|
|
|
500,00
|
|
|
|
|
|
766,667
|
|
Fair value as of September 30, 2020
|
|
|
4,640,000
|
|
|
3
|
|
|
8,700,000
|
|
|
3
|
|
|
13,340,000
|
|
Change in valuation inputs or other assumptions
|
|
|
3,816,000
|
|
|
|
|
|
7,406,667
|
|
|
|
|
|
11,222,667
|
|
Fair value as of December 31, 2020
|
|
$
|
8,456,000
|
|
|
3
|
|
$
|
16,106,667
|
|
|
1
|
|
$
|
24,562,667
|
|
Due to the use of quoted prices in an active market (Level
1) to measure the fair value of the Public Warrants, subsequent to initial measurement, the Company had transfers out of Level 3 totaling
$16,106,667 during the period from September 29, 2020 through December 31, 2020.
To the
extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair
value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower
than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised
by the Company in determining fair value is greatest for investments categorized in Level 3.
VECTOR ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
Level 3 financial liabilities consist of the Private Placement
Warrant liability for which there is no current market for these securities such that the determination of fair value requires significant
judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period
based on changes in estimates or assumptions and recorded as appropriate.
NOTE 11 — SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial
statements were issued. Based upon this review, other than as described below and in Note 2, the Company did not identify any
subsequent events that would have required adjustment or disclosure in the financial statements.
On March 1, 2021, the Company entered into an Agreement and
Plan of Merger with Rocket Lab, and Prestige USA Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Rocket Lab
(“Merger Sub”). The Agreement and the transactions contemplated thereby were unanimously approved by the boards of directors
of each of the Company and Rocket Lab.
As a consequence of the merger, the Company will domesticate as
a Delaware corporation (the “Domestication” and the Company following the Domestication, “Delaware Vector”) and,
in connection therewith, (a) the Class A ordinary shares, par value $0.0001 per share, of Vector (the “Class A Shares”)
and the Class B ordinary shares, par value $0.0001 per share, of Vector (the “Class B Shares”), issued and outstanding
immediately prior to the Domestication will convert into an equal number of shares of common stock, par value $0.0001 per share, of Vector
Delaware (the “Delaware Vector Common Stock”); (b) Vector’s warrants to purchase Class A Shares issued and outstanding
immediately prior to the Domestication will convert into an equal number of warrants to purchase Delaware Vector Common Stock (the “Delaware
Vector Warrants”) and (c) Vector’s units that have not been separated into Class A Shares and warrants issued and
outstanding immediately prior to the Domestication will convert into an equal number of units of Delaware Vector (the “Delaware
Vector Units”).
Immediately following the Domestication, Merger Sub will merge
with and into Delaware Vector, with Delaware Vector surviving the merger as a wholly owned subsidiary of Rocket Lab (the “First
Merger”), and in connection therewith, (a) the shares of Delaware Vector Common Stock (other than any treasury shares, shares
held by Delaware Vector or any dissenting shares) issued and outstanding immediately prior to the effective time of the First Merger (the
“First Effective Time”) will convert into an equal number of shares of Rocket Lab Common Stock; (b) the Delaware Vector
Warrants that are outstanding and unexercised immediately prior to the First Effective Time will convert into an equal number of warrants
to purchase Rocket Lab Common Stock (the “Assumed Warrants”) and (c) the Delaware Vector Units that are outstanding immediately
prior to the First Effective Time will convert into an equal number of units of Rocket Lab (the “Assumed Units”); and immediately
following the First Effective Time, Rocket Lab will merge with and into Delaware Vector, with Delaware Vector surviving the merger (Delaware
Vector as the surviving corporation, “Pubco” and such merger, the “Second Merger” and, together with the First
Merger, the “Mergers”). If the closing price of Pubco Common Stock is equal to or greater than $20.00 for a period of at least
20 days out of 30 consecutive trading days during the period commencing on the 90th day following the Closing and ending on the 180th
day following the Closing, the Rocket Lab stockholders will be entitled to receive additional shares of Pubco Common Stock equal to 8%
of the Aggregate Share Consideration.
The Domestication, the Mergers and the other transactions contemplated
by the Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is expected to close
in the second quarter of 2021, subject to the satisfaction of certain customary closing conditions.
Concurrently with the execution of the Agreement, the Company
entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”),
pursuant to which the PIPE Investors agreed to subscribe for and purchase, and Vector agreed to issue and sell to such PIPE Investors,
immediately prior to Closing, an aggregate of 46,700,000 shares of Pubco Common Stock for a purchase price of $10.00 per share, for aggregate
gross proceeds of $467,000,000 (the “PIPE Financing”).
The closing of the PIPE Financing is contingent upon, among other
things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Vector will grant
the investors in the PIPE Financing certain customary registration rights.
F-20