Spruce Power (SPRU) - 2020 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed financial statements for Pivotal Investment Corporation II as of March 31, 2020, including the balance sheet, statements of operations, changes in stockholders' equity, and cash flows, reflecting its status as a blank check company with assets in a trust account Condensed Balance Sheets As of March 31, 2020, total assets were $233.2 million, primarily marketable securities in the Trust Account, with $219.9 million Class A common stock subject to redemption Condensed Balance Sheet Data (as of March 31, 2020) | Metric | March 31, 2020 (unaudited) | December 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Cash | $965,957 | $624,943 | | Marketable securities held in Trust Account | $232,178,457 | $231,919,897 | | Total Assets | $233,194,207 | $232,661,414 | | Liabilities & Equity | | | | Total Liabilities | $8,287,504 | $8,266,100 | | Class A common stock subject to possible redemption | $219,906,695 | $219,395,310 | | Total Stockholders' Equity | $5,000,008 | $5,000,004 | Condensed Statements of Operations For the three months ended March 31, 2020, net income was $511,389, driven by $778,592 interest income from the Trust Account, offset by operating costs Statement of Operations (Three Months Ended March 31, 2020) | Metric | Amount | | :--- | :--- | | Interest income on marketable securities held in Trust Account | $778,592 | | Operating and formation costs | $131,264 | | Provision for income taxes | ($135,939) | | Net income | $511,389 | Condensed Statements of Changes in Stockholders' Equity Total stockholders' equity remained stable at approximately $5.0 million as of March 31, 2020, with net income offset by changes in redeemable Class A common stock - Total stockholders' equity increased slightly from $5,000,004 at the beginning of the period to $5,000,008 at March 31, 2020[18] Condensed Statements of Cash Flows For Q1 2020, net cash used in operating activities was $179,018, while investing activities provided $520,032, increasing the cash balance to $965,957 Cash Flow Summary (Three Months Ended March 31, 2020) | Metric | Amount | | :--- | :--- | | Net cash used in operating activities | ($179,018) | | Net cash provided by investing activities | $520,032 | | Net Change in Cash | $341,014 | | Cash – Ending | $965,957 | Notes to Condensed Financial Statements Notes detail operations, accounting policies, and financial items, including SPAC formation, $230 million IPO, $6.35 million private placement, related-party transactions, and commitments - The company is a blank check company formed to effect a business combination, focusing on North American companies in industries disrupted by digital technology[26][27] - On July 16, 2019, the company completed its Initial Public Offering of 23,000,000 units, generating gross proceeds of $230,000,000, which were placed in a Trust Account[29][31] - The company has until January 16, 2021 (the "Combination Period") to consummate a Business Combination, or it will be required to liquidate and redeem its public shares[39] - A managing member of the Sponsor has entered into a forward purchase agreement to purchase up to $150,000,000 of the company's securities concurrently with the initial Business Combination[77] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, Q1 2020 financial results, and liquidity, noting net income from Trust Account interest and key contractual obligations - For the three months ended March 31, 2020, the company had a net income of $511,389, which consisted of $778,592 in interest income from the Trust Account, offset by $131,264 in operating costs and a $135,939 provision for income taxes[98] - As of March 31, 2020, the company had $965,957 in cash held outside the Trust Account for working capital purposes and $232,178,457 in marketable securities held within the Trust Account[104][106] - The company's primary contractual obligations include a deferred underwriting fee of $8,050,000 payable upon completion of a Business Combination and a forward purchase agreement for up to $150,000,000[110][112] Quantitative and Qualitative Disclosures About Market Risk The company is not subject to material market or interest rate risk, as Trust Account funds are invested in short-term U.S. government treasury securities - The company believes there is no material exposure to interest rate risk due to the short-term nature of its investments in U.S. government securities with maturities of 180 days or less[117] Controls and Procedures As of March 31, 2020, CEO and CFO concluded disclosure controls were effective, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[119] - No changes in internal control over financial reporting occurred during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[120] PART II. OTHER INFORMATION Unregistered Sales of Equity Securities and Use of Proceeds This section discloses unregistered sales to the Sponsor, including 5,750,000 Class B common stock for $25,000 and 4,233,333 private placement warrants for $6.35 million - In March 2019, the company issued 5,750,000 shares of Class B common stock to its Sponsor for a capital contribution of $25,000[121] - Simultaneously with the IPO, the company sold 4,233,333 Private Placement Warrants to the Sponsor at $1.50 per warrant, generating total proceeds of $6,350,000[123] - Total transaction costs related to the IPO amounted to $13,185,704, including $4,600,000 in underwriting fees and $8,050,000 in deferred underwriting fees[124] Exhibits This section lists exhibits filed with the Form 10-Q, primarily certifications by the Principal Executive Officer and Principal Financial Officer per Sarbanes-Oxley Act - The report includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Act Sections 302 and 906[126] Signatures Signatures The Form 10-Q report was signed on May 14, 2020, by CEO Jonathan J. Ledecky and CFO James Brady - The report was signed on May 14, 2020, by Jonathan J. Ledecky (Chief Executive Officer) and James Brady (Chief Financial Officer)[130][131]