Rodgers Silicon Valley Acquisition Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Business Combinations

Business Combinations

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combination with Rodgers Silicon Valley Acquisition Corp.

On July 14, 2021 (the “Closing Date”), Enovix Corporation, a Delaware Corporation (“Legacy Enovix”), Rodgers Silicon Valley Acquisition Corp. (“RSVAC”), and RSVAC Merger Sub Inc., a Delaware Corporation and wholly owned subsidiary of RSVAC (“Merger Sub”), consummated the closing of the transactions contemplated by the Agreement and Plan of Merger, dated February 22, 2021 (the “Business Combination”), by and among RSVAC, Merger Sub and Legacy Enovix (the “Merger Agreement”), following the approval at a special meeting of the stockholders of RSVAC held on July 12, 2021 (the “Special Meeting”). Following the consummation of the Business Combination on the Closing Date, Legacy Enovix changed its name to Enovix Operations Inc., and RSVAC changed its name from Rodgers Silicon Valley Acquisition Corp. to Enovix Corporation.

The Business Combination was accounted for as a reverse recapitalization under GAAP. This determination is primarily based on Legacy Enovix stockholders comprising a relative majority of the voting power of Enovix and having the ability to nominate the members of the Board, Legacy Enovix’s operations prior to the acquisition comprising the only ongoing operations of Enovix, and Legacy Enovix’s senior management comprising a majority of the senior management of Enovix. Under this accounting method, RSVAC was treated as the “acquired” company and Legacy Enovix was treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of Enovix represent a continuation of the financial statements of Legacy Enovix with the Business Combination being treated as the equivalent of Enovix issuing common stock for the net assets of RSVAC, accompanied by a recapitalization.

The net liabilities of RSVAC, other than its warrant liabilities, were stated at historical cost, which approximated to its fair values. Its warrant liabilities were stated at its fair values and no goodwill or other intangible assets were recorded. Results of operations prior to the Business Combination were presented as those of Enovix. Beginning in the third quarter of 2021, historical shares and corresponding capital amounts, as well as for net loss per share, prior to the Business Combination, were retrospectively adjusted using the exchange ratio as defined in the Business Combination for the equivalent number of shares outstanding immediately after the Business Combination to the effect the reverse recapitalization.

Immediately prior to the Business Combination all shares of Legacy Enovix outstanding convertible preferred stock were converted into an equivalent number of shares of Legacy Enovix common stock.

At the Business Combination, eligible Legacy Enovix equity holders received or have the right to receive shares of Enovix common stock (“Common Stock”), with par value $0.0001 per share, at a deemed value of $10.00 per share after giving effect to the exchange ratio of approximately 0.1846 as defined in the Merger Agreement (“Exchange Ratio”). Accordingly, immediately following the consummation of the Business Combination, Legacy Enovix common stock was exchanged into 103,995,643 shares of Common Stock, 5,547,327 shares were reserved for the issuance of Common Stock upon the potential future exercise of Legacy Enovix’s stock options that were exchanged into Enovix’s stock options.

Upon the closing of the Business Combination, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of Common Stock to 1,000,000,000 shares, $0.0001 par value per share and designate 10,000,000 shares as Preferred Stock.

In connection with the execution of the Merger Agreement, RSVAC entered into separate subscription agreements (each a “Subscription Agreement”) with a number of investors (each a “New PIPE Investor”), pursuant to which the New PIPE Investors agreed to purchase, and RSVAC agreed to sell to the New PIPE Investors, an aggregate of 12,500,000 shares of Common Stock (“PIPE Shares”), for a purchase price of $14.00 per share and an aggregate purchase price of $175.0 million, in a private placement pursuant to the subscription agreements (“PIPE Financing”). The PIPE Financing closed simultaneously with the consummation of the Business Combination.

The following table shows the number of shares of Common Stock issued immediately following the consummation of the Business Combination.


RSVAC common stock shares outstanding prior to the Business Combination			28,750,000
Less redemption of RSVAC common stock shares			(15)
RSVAC common stock shares			28,749,985
PIPE Shares issued			12,500,000
RSVAC common stock shares and PIPE Shares			41,249,985
Legacy Enovix common shares (1)			103,995,643
Total shares of Common Stock immediately after the Business Combination			145,245,628


(1)			The number of Legacy Enovix common shares was determined from the 563,316,738 shares of Legacy Enovix common stock outstanding immediately prior to the closing of the Business Combination converted at the exchange ratio of approximately 0.1846. All fractional shares were rounded.

In connection with the Business Combination in July 2021, the Company assumed $73.4 million of net liabilities from RSVAC. The following table shows the net cash proceeds from the Business Combination (in thousands).


	Recapitalization
Cash - RSVAC Trust and cash, net of redemptions	$	230,155
Cash - PIPE Financing	175,000
Less: transaction costs and PIPE financing fees	(31,410)
Net cash contributions from Business Combination	$	373,745

Routejade Acquisition

On September 18, 2023, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Rene Limited, a corporation incorporated under the laws of the Republic of Korea (the “Seller”). On October 31, 2023, the Company closed the transaction contemplated by the Stock Purchase Agreement (the “Closing”) to purchase Routejade, Inc. (“Routejade”), a battery manufacturer incorporated under the laws of Republic of Korea. This acquisition has allowed the Company to vertically integrate electrode coating and battery pack manufacturing.

The total purchase consideration of such transaction consists of cash consideration in the amount of approximately $15.4 million and 5,923,521 shares of common stock of the Company, par value $0.0001, for the purchase of approximately 95.8% of the outstanding shares of Routejade (the “Routejade Acquisition”). The closing price of the

Company’s common stock on October 31, 2023 was $8.91. Total following table summarized the considerations for the acquisition.


Cash paid, net of acquisition-related seller expense		$	15,448
Issuance of Enovix common stock (5,923,521 shares)		52,779
Total purchase consideration		68,227
Less: net assets acquired
Net assets acquired, excluding liability assumed for acquisition-related seller expense	56,486
Liability assumed for acquisition-related seller expense	(357)
Net assets acquired		56,129
Goodwill		$	12,098

This acquisition constitutes a business acquisition in accordance with FASB Accounting Standards Codification (“ASC”) (Topic 805), Business Combinations (“ASC 805”) for business combinations and, therefore, will be accounted for as a business combination using the acquisition method of accounting. The tangible and intangible assets acquired and liabilities assumed were recorded based on their estimated fair values at the acquisition date.

The following table summarizes the preliminary purchase price allocation based on the fair values of the assets acquired and liabilities assumed as of the acquisition date, which are subject to change within the measurement period as the fair value assessments are finalized (in thousands).


Cash, cash equivalents and restricted cash acquired	$	5,481
Accounts and notes receivable, net (1)	1,796
Inventory	12,613
Prepaid expenses and other current assets	1,715
Property and equipment, net	26,987
Intangible assets	42,981
Goodwill	12,098



Other non-current assets	365
Debt assumed	(7,426)
Deferred revenue	(10,568)
Liabilities assumed	(3,182)
Deferred income tax liabilities	(11,616)
Fair value of net assets acquired	71,244
Less: non-controlling interest (2)	(3,017)
Total purchase consideration	68,227
Less: Cash, cash equivalents, restricted cash acquired	(5,481)
Total purchase price, net of cash acquired	$	62,746


(1)			The gross amount of the acquired accounts and notes receivable was $1.9 million, of which an immaterial amount is expected to be uncollectible.
(2)			The fair value of non-controlling interest is measured based on the fair values of net assets acquired at the acquisition date and the price for the equity shares and the portion of ownership not held by the acquirer.

Goodwill

The excess of the purchase price over the fair value of net assets acquired was recorded to goodwill. Goodwill is primarily attributable to the expected synergies from future expected economic benefits, including integrating electrode coating and battery pack manufacturing. Goodwill from this acquisition is not expected to be deductible for tax purposes.

The following table summarizes the change in goodwill (in thousands).


	Goodwill
Balance as of January 1, 2023	$	—
Routejade Acquisition	12,098

Balances as of December 31, 2023	$	12,098

Intangible Assets

Intangible assets consist of customer relationships, developed technology and trade names and trademarks. Customer relationships relates to Routejade’s existing customer relationships to earn current and future business. Developed technology relates to its technology for manufacturing standard lithium-ion batteries with varying chemistries, enabling design flexibility and producing customized battery cells.

The following table summarizes the intangible assets subject to amortization, net (in thousands).


	Gross		Accumulated amortization		Net Carrying Amount		Weighted-average Useful Lives
Customer relationships	$	30,966	$	(517)	$	30,449	10 years
Developed technology	11,680		(277)		11,403		7 years
Trade Names and Trademarks	335		(19)		316		3 years
Total intangible assets	$	42,981	$	(813)	$	42,168

The Company acquired these intangible assets through the Routejade Acquisition in October 2023. For the fiscal year 2023, amortization of the intangible assets was $0.8 million. As of December 31, 2023, the weighted average remaining useful lives for intangible assets was approximately 9 years.

The following is a schedule of expected amortization for the intangible assets as of December 31, 2023 (in thousands).


	As of December 31, 2023
2024	$	4,860
2025	4,860
2026	4,933
2027	4,748
2028	4,748
Thereafter	18,019
Total estimated amortization expense	$	42,168

Revenue and net loss from operations

For the fiscal year 2023, the Company’s result of operations included approximately $7 million of Routejade’s revenue and an immaterial amount of Routejade’s net loss from operations since the acquisition date.

Acquisition Costs

For the fiscal year 2023, the Company recorded approximately $1.3 million of acquisition costs, which were included in Selling, general and administrative of the Consolidated Statements of Operations.

Proforma information

The consolidated unaudited proforma revenue for fiscal years 2023 and 2022, which included Routejade assuming the acquisition occurred on January 3, 2022, were approximately $21.1 million and $16.4 million, respectively. The consolidated unaudited proforma net income related to this acquisition was not included because the impact on the Company's consolidated results of operations was not material.