Commitments

7 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

NOTE 6. COMMITMENTS

Registration Rights

Pursuant to a registration rights agreement entered into on August 17, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of Working Capital Loans) are entitled to registration rights requiring the Company to register such securities for resale. 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 and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriters a 45-day option from the date of Initial Public Offering to purchase up to 4,500,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On August 27, 2020, the underwriters elected to partially exercise their over-allotment option to purchase 1,945,344 Units at a purchase price of $10.00 per Unit and forfeited their election to exercise the remaining over-allotment option.

The underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of the Initial Public Offering, or $11,180,870. The deferred fee will be payable in cash to the underwriters solely in the event that the Company completes a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

Business Combination Agreement

On November 30, 2020, the Company, Lion Electric, and Lion Electric Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Lion Electric (“Merger Sub”), entered into a business combination agreement and plan of reorganization (the “Business Combination Agreement”), pursuant to which Merger Sub will be merged with and into the Company (the “Merger,” together with the other transactions related thereto, the “Proposed Lion Transaction”), with the Company surviving the Merger as a wholly owned subsidiary of Lion Electric (the “Surviving Corporation”).

Immediately prior to the effective time of the Merger (the “Effective Time”), Lion Electric will implement a reorganization (the “Lion Electric Pre-Closing Reorganization”), which will include a split of the common shares of Lion Electric (the “Lion Electric Common Shares”) whereby each Lion Electric Common Share immediately prior to such share split will be converted into 4.1289 Lion Electric Common Shares immediately following such share split (the “Company Split Adjustment”) and the amendment and restatement, effective as of the Effective Time, of Lion Electric’s articles and bylaws.

At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Lion Electric, Merger Sub or any of the holders of any of their securities:

● the common stock of Merger Sub issued and outstanding immediately prior to the Effective Time will be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation;

● each share of common stock of the Company (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time (other than any Excluded Shares and Redemption Shares, each as defined below) will be converted into the right to receive from Lion Electric the number of fully-paid and nonassessable Lion Electric Common Shares (after giving effect to the Company Split Adjustment) equal to an exchange ratio (the “Exchange Ratio”), which will initially be one (1) but will be subject to customary adjustments pursuant to the Business Combination Agreement for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalization, reclassification, combination, exchange of shares or like changes occurring after the Company Split Adjustment (the “Per Share Merger Consideration”);

● all such shares of Company Common Stock, when so converted, will cease to be outstanding and will automatically be canceled and cease to exist, and each holder of a share of Company Common Stock that was outstanding immediately prior to the Effective Time (other than Excluded Shares and Redemption Shares) will cease to have any rights with respect thereto, except the right to receive the Per Share Merger Consideration;

● the Surviving Corporation will issue to Lion Electric one share of common stock of the Surviving Corporation for each share of Company Common Stock issued as Per Share Merger Consideration;

● all shares of Company Common Stock held by the Company as treasury shares immediately prior to the Effective Time and not held on behalf of third parties (collectively, “Excluded Shares”) will automatically be canceled and cease to exist as of the Effective Time, and no consideration will be delivered in exchange therefor;

● each share of Company Common Stock issued and outstanding immediately prior to the Effective Time with respect to which a Company stockholder has validly exercised its redemption rights under the Company’s Certificate of Incorporation (“Redemption Rights”) will be redeemed at the Effective Time (the “Redemption Shares”), will not be entitled to receive the Per Share Merger Consideration, and will be converted into the right to receive from the Company, in cash, an amount per share calculated in accordance with such stockholder’s Redemption Rights (such amount, the “Redemption Payment”), and the Company or the Surviving Corporation will make such cash payments at or as promptly as practical after the Effective Time;

● as of the Effective Time, all Redemption Shares will cease to be outstanding and will automatically be cancelled and retired and will cease to exist, and each holder of a Redemption Share (or related certificate or book-entry share) will cease to have any rights with respect thereto, except the right to receive the cash payment in respect thereof from the Company or the Surviving Corporation referred to in the immediately preceding sentence;

● at the Effective Time and in accordance with Section 4.5 of the Warrant Agreement dated August 7, 2020, by and between the Company and Continental Stock Transfer & Trust Company (the “Company Warrant Agreement”), each warrant to purchase Company Common Stock under the Company Warrant Agreement (“Company Warrant”), to the extent then outstanding and unexercised, will automatically, without any action on the part of its holder, be converted into a warrant to acquire a number of Lion Electric Common Shares at an adjusted exercise price per share, in each case, as determined in accordance with the following (each resulting warrant, an “Assumed Warrant”):

Consummation of the Proposed Lion Transaction is subject to approval by stockholders holding a majority of the outstanding shares of Company Common Stock and satisfaction of certain other conditions, as further described in the Business Combination Agreement.