Overview
We are a blank check company incorporated on
The issuance of additional shares in connection with a Business Combination to the owners of the target or other investors:
• may significantly dilute the equity interest of our stockholders, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock; • may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock; • could cause a change of control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; • may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and • may adversely affect prevailing market prices for our Class A common stock and/or warrants.
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
• default and foreclosure on our assets if our operating revenues after a Business Combination are insufficient to repay our debt obligations; • acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; • our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; • our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; • our inability to pay dividends on our common stock; 3
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• using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; • limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; • a possible decrease in prevailing market prices for our Class A common stock and/or warrants; • increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and • limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying unaudited condensed financial statements, as of
Results of Operations
Since the Public Offering, our activities have consisted of efforts directed towards locating a suitable target and completing a suitable Business Combination. Our operating costs for those periods include our search for a Business Combination and are largely associated with expenses related to being a public company (for legal, IR, accounting, auditing compliance and other purposes) as well as expenses as we conduct due diligence on prospective Business Combination candidates.
Liquidity and Capital Resources
In order to finance transaction costs in connection with an intended Business
Combination, our sponsor has committed
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On
The net proceeds from the Public Offering and Private Placement was
approximately
Until the consummation of the Public Offering, the Company's only sources of
liquidity were a capital contribution from our sponsor of
The Company believes that it has sufficient working capital as of
Off-balance sheet financing arrangements
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 agreements for non-financial assets.
Contractual obligations
As of
Critical Accounting Policies
Use of Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
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Emerging Growth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net income (loss)
applicable to common stockholders by the weighted average number of common
shares outstanding during the period (after deducting shares that are subject to
forfeiture in connection with the Public Offering), plus to the extent dilutive
the incremental number of shares of common stock to settle warrants, as
calculated using the treasury stock method. Shares of common stock subject to
possible redemption as of
Financial Instruments
The fair value of the Company's assets and liabilities, which qualify as financial instruments under FASB ASC 820, "Fair Value Measurements and Disclosures," approximates the carrying amounts represented in the accompanying balance sheet.
Offering Costs
The Company complies with the requirements of the FASB ASC 340-10-S99-1 and
Income Taxes
The Company follows the asset and liability method of accounting for income
taxes under FASB ASC, 740, "Income Taxes." Deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to
differences between the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that included the
enactment date. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized. As of
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Redeemable common stock
All of the approximately 28,260,000 shares of common stock sold as part of the
Units in the Public Offering contain a redemption feature which allows for the
redemption of such common stock under the Company's liquidation or tender
offer/stockholder approval provisions. In accordance with ASC 480, redemption
provisions not solely within the control of the Company require the security to
be classified outside of permanent equity. Ordinary liquidation events, which
involve the redemption and liquidation of all of the entity's equity
instruments, are excluded from the provisions of ASC 480. Although the Company
does not specify a maximum redemption threshold, its amended and restated
certificate of incorporation provides that in no event will the Company redeem
its Public Shares in an amount that would cause its net tangible assets
(stockholders' equity) to be less than
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the security to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital.
As of
Recent Accounting Pronouncements
Management does not believe that there are any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's unaudited condensed financial statements.
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