ARMADA ACQUISITION CORP. I The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this report. References
to the "Company," "us" or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We
have based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements are subject to
known and unknown risks, uncertainties and assumptions about us that may cause
our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described in our other
Overview
We are a blank check company incorporated in
On
Simultaneously with the closing of the IPO, we consummated the private placement
of 459,500 Private Shares for an aggregate purchase price of
Upon the closing of the IPO on
If we are unable to complete the initial Business Combination within the
Combination Period, we 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 outstanding 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 on the funds held in the Trust
Account and not previously released to us but net of taxes payable (and less up
to
We cannot assure you that our plans to complete our initial business combination will be successful.
47 Table of Contents Results of Operations
For the period from
We will have 15 months (or 18 months if extended) from the closing of the IPO to
complete the initial Business Combination (the "Combination Period"). However,
if we are unable to complete the initial Business Combination within the
Combination Period, we 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 outstanding 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 on the funds held in the Trust
Account and not previously released to the Company but net of taxes payable (and
less up to
We have also agreed to reimburse the Sponsor for office space, secretarial and
administrative services provided to members of our management team, in an amount
not to exceed
Liquidity and Capital Resources
As of
On
Simultaneously with the consummation of the IPO, the Company consummated the
private placement of 459,500 shares of common stock ("Private Shares"), at a
price of
In connection with the IPO, the underwriters were granted a 45-day option from
the date of the prospectus for the IPO to purchase up to 2,250,000 additional
units to cover over-allotments, if any. On
Following our IPO and the sale of the Private Shares, a total of
As of
48 Table of Contents
For the year ended
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account to
complete our initial business combination. We may withdraw interest to pay our
taxes and liquidation expenses if we are unsuccessful in completing a business
combination. We estimate our annual franchise tax obligations to be
Further, our sponsor, officers and directors or their respective affiliates may,
but are not obligated to, loan us funds as may be required (the "Working Capital
Loans"). If we complete a business combination, we would repay the Working
Capital Loans. In the event that a business combination does not close, we 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. Such Working Capital Loans would be evidenced by
promissory notes. The notes would either be repaid upon consummation of a
business combination, without interest, or, at the lender's discretion, or
converted upon consummation of a business combination into additional Private
Shares at a price of
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business for the 15 month period from
the closing of our initial public offering (or 18 months from such date if we
extend the period of time to consummate a business combination). However, if our
estimate of the costs of identifying a target business, undertaking in-depth due
diligence and negotiating a business combination are less than the actual amount
necessary to do so, we may have insufficient funds available to operate our
business prior to our business combination. In connection with the execution of
the Business Combination Agreement, we and Cayman NewCo entered into certain
subscription agreements, each dated
Critical Accounting Policies
The preparation of these unaudited condensed financial statements in conformity with US GAAP requires 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 unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We have identified the following as our critical accounting policies:
Offering Costs
We comply with the requirements of ASC 340-10-S99-1 and
49 Table of Contents
Redeemable Shares of Common Stock
We account for our common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity." Common stock subject to mandatory redemption (if any) are classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock 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, common stock are classified as stockholders' equity. Our shares of common stock feature certain redemption rights that are considered to be outside of the Company's control and subject to the occurrence of uncertain future events. Accordingly, 15,000,000 shares of common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders' equity section of the Company's balance sheet.
All of the common stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company's liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company's certificate of incorporation. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity.
Net Loss per Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share". Net income (loss) per common stock is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the period. Remeasurement adjustments associated with the redeemable shares of common stock is excluded from earnings per share as the redemption value approximates fair value.
The calculation of diluted income (loss) per share does not consider the effect
of the warrants issued in connection with the IPO because the warrants are
contingently exercisable, and the contingencies have not yet been met. The
warrants are exercisable to purchase 7,500,000 shares of common stock in the
aggregate. As of
Accretion of the carrying value of common stock subject to redemption value is excluded from net income per common stock because the redemption value approximates fair value.
Recent Accounting Pronouncements
In
Management does not believe that any recently issued, but not effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.
50 Table of Contents
We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than an administrative agreement to
reimburse our sponsor for office space, secretarial and administrative services
not to exceed
Financial Advisory Fee
We engaged
Business Combination Marketing Agreement
We engaged the representative of the underwriter as an advisor in connection
with Business Combination to assist in holding meetings with our stockholders to
discuss the potential Business Combination and the target business' attributes,
introduce us to potential investors that are interested in purchasing our
securities in connection with the initial Business Combination and assist us
with press releases and public filings in connection with the Business
Combination. We will pay the representative a cash fee for such services upon
the consummation of the initial Business Combination in an amount equal to 2.25%
of the gross proceeds of the IPO, or
Right of First Refusal
If we determine to pursue any equity, equity-linked, debt or mezzanine financing
relating to or in connection with an initial Business Combination, then
51 Table of Contents Registration Rights
The holders of the Founder Shares issued and outstanding on the date of the IPO, as well as the holders of the representative shares, Private Shares and any shares the sponsor, officers, directors or their affiliates may issue in payment of Working Capital Loans made to us, will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the IPO. The holders of a majority of these securities (other than the holders of the representative shares) are entitled to make up to two demands that we register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Shares and shares issued to the Sponsor, officers, directors or their affiliates in payment of Working Capital Loans made to us can elect to exercise these registration rights at any time after we consummate a business combination. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the consummation of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of the IPO to purchase
up to an additional 2,250,000 units to cover over-allotments, if any. On
The underwriters were paid a cash underwriting discount of 1.0% of the gross
proceeds of the IPO, or
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