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 Quarterly Report on Form10-Q 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
On
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
On
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Business Combination Agreement
On
Pursuant to the terms of the Business Combination Agreement, we, Cayman NewCo, Rezolve and Rezolve Merger Sub will effect a series of transactions including, among other things:
• a company reorganization pursuant to which Cayman NewCo will enter into a
transfer and exchange agreement (the "Transfer and Exchange Agreement"),
pursuant to which, each Key Company Shareholder (as defined in the
Business Combination Agreement) will transfer to Cayman NewCo his, her or
its respective shares of Rezolve in exchange for ordinary shares in
Cayman NewCo, such that following the effectiveness of such transfers,
the Key Company Shareholders will own the same proportionate equity
interests of Cayman NewCo that such Key Company Shareholders owned
immediately before such transfers (with the balance of the other shares
of Rezolve to be transferred to Cayman NewCo in exchange for an
equivalent number and class of shares in Cayman NewCo) and, immediately
thereafter, each Key Company Shareholder will transfer to Cayman NewCo
all of his, her or its respective shares of Cayman NewCo so received in
exchange for his, her or its applicable pro rata portion of the aggregate
stock consideration in accordance with the terms and conditions set forth
in the Business Combination Agreement and in such Transfer and Exchange
Agreement (with all other shareholders of Rezolve to transfer to Cayman
NewCo all of his, her or its respective shares of Cayman NewCo received
in exchange for his, her or its applicable pro rata portion of the
aggregate stock consideration); and
• following the Company Reorganization, but in no event earlier than ten
(10) days following the effectiveness of each of the transactions
contemplated by the Company Reorganization: (a) Rezolve Merger Sub shall
be merged with and into Armada whereupon Rezolve Merger Sub will cease to
exist and with Armada surviving the Merger as a subsidiary of Cayman
NewCo; and (b) Armada shall loan all of its remaining cash in the Trust
Account to Cayman NewCo in exchange for a promissory note, to enable
Cayman NewCo to fund working capital and transaction expenses. Pursuant
to the Merger, all of the outstanding securities of Armada will be
converted into the right to receive an equivalent number of securities of
Cayman NewCo of the same type and with the same terms.
As a result of the Business Combination (i) the shareholders of Rezolve will
receive a number of Cayman NewCo ordinary shares equal to (A) the quotient
obtained by dividing (x)
The consummation of the Business Combination is subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including the completion of the Company Reorganization, the requisite approvals of our stockholders and Rezolve's shareholders and regulatory approvals.
In connection with the execution of the Business Combination Agreement, we and
Cayman NewCo entered into certain subscription agreements, each dated
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On
Structure of the Business Combination
The Amendment amends the Business Combination Agreement so that Rezolve is substituted for Cayman Newco as applicable. As a result of this amendment, Cayman Newco is no longer a party to the Business Combination Agreement or the Business Combination, and Rezolve will be the listed entity upon the closing. As necessary, Armada and Rezolve have agreed to make any amendments to the Ancillary Documents as are necessary or appropriate to effect the substitution of Rezolve for Cayman Newco in the Business Combination.
Termination
The original Business Combination Agreement allowed the parties to terminate
such agreement if certain conditions described therein are satisfied. One such
condition allowed either Armada or Rezolve to terminate the Business Combination
Agreement if the Business Combination is not consummated by
The original Business Combination Agreement allowed either Armada or Rezolve to
terminate the Business Combination Agreement in the event the aggregate
transaction proceeds provided or committed to be provided are not more than
Incentive Plan
Under the Amendment, Armada and Rezolve agreed and acknowledged that following
Articles of Association
Pursuant to the Amendment, Armada and Rezolve agreed upon the form of the articles of association of Rezolve to be adopted and become effective upon closing of the Business Combination.
We cannot assure you that our plans to complete our initial business combination will be successful.
Results of Operations
For the three months ended
For the three months ended
Following the exercise of the automatic extension of the deadline for us to
complete an initial business combination under our second amended and restated
certificate of incorporation ("Charter"), we had until
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combination) (the "Combination Period"). At our Annual Meeting held on
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 Going Concern
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
On
As of
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As of
For the three months 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. If we complete a
business combination, we would repay the 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 loans, but no proceeds held in the Trust Account
would be used to repay the loans. Such loans would be evidenced by promissory
notes and would be repaid upon consummation of a business combination, without
interest. As of
On
In connection with our assessment of going concern considerations in accordance
with FASB Accounting Standards Update ("ASU") 2014-15, "Disclosures of
Uncertainties about an Entity's Ability to Continue as a Going Concern," our
management has determined that we have and will continue to incur significant
costs in pursuit of acquisition plans which, in addition to possibility that we
might not be able to a close business combination and be forced to liquidate
after
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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:
Common Stock Subject to Possible Redemption
The Company accounts for its 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. The Company's 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 condensed balance sheets.
The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the IPO, the Company recognized the remeasurement adjustment from initial carrying amount to redemption book value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital.
Net Income (Loss) Per Common Stock
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share". Net income (loss) per common stock is computed by dividing net 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 (loss) per common stock because the redemption value approximates fair value.
Recent Accounting Standards
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company's 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.
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.
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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
This right of first refusal extends from the date of the IPO until the earlier of the consummation of an initial Business Combination or the liquidation of the Trust Account if the Company fails to consummate a Business Combination during the required time period.
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
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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
The underwriters were paid a cash underwriting discount of 1.0% of the gross
proceeds of the IPO, or
Business Combination Agreement
We are party to the Business Combination Agreement with Rezolve, Cayman NewCo
and Rezolve Merger Sub, dated
In connection with the execution of the Business Combination Agreement, certain
investors have agreed to purchase an aggregate of 2,050,000 ordinary shares of
Cayman NewCo for the purchase price of
On
Concurrently with the execution and delivery of the Business Combination Agreement, the Company and the Key Company Shareholders (as defined in the Business Combination Agreement) have entered into the Transaction Support Agreement (the "Transaction Support Agreement"), pursuant to which, among other things, the Key Company Shareholders have agreed to (a) vote in favor of the Company Reorganization (b) vote in favor of the Business Combination Agreement and the agreements contemplated thereby and the transactions contemplated thereby, (c) enter into the Investor Rights Agreement (as described below) at Closing and (d) the termination of certain agreements effective as of Closing.
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