Special Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Form
10-K including, without limitation, statements under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. When used in
this Form 10-K, words such as "anticipate," "believe," "estimate," "expect,"
"intend" and similar expressions, as they relate to us or the Company's
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of management, as well as assumptions made by, and
information currently available to, the Company's management. Actual results
could differ materially from those contemplated by the forward-looking
statements as a result of certain factors detailed in our filings with the
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
62 Overview
We are a blank check company formed under the laws of the
? may significantly reduce the equity interest of our stockholders; ? may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock; ? will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and ? may adversely affect prevailing market prices for our securities.
Similarly, if we issue debt securities, it could result in:
? default and foreclosure on our assets if our operating revenues after a Business Combination are insufficient to pay our debt obligations; ? acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant 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 additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding; ? our inability to pay dividends on our common stock; ? 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; ? 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, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
All activity through
We have neither engaged in any operations nor generated any revenues to date. We are incurring, and expect to continue to incur, significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
We are an emerging growth company as defined in the JOBS Act. As an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from
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For the period from
Liquidity and Capital Resources
As indicated in the accompanying financial statements, at
On
We intend to use substantially all of the funds held in the trust account,
including any amounts representing interest earned on the trust account (less
deferred underwriting commissions), to complete our Initial Business
Combination. We may withdraw interest to pay taxes. We estimate our annual
franchise tax obligations, based on the number of shares of our common stock
authorized and outstanding after the completion of our IPO, to be
We expect our primary liquidity requirements for operating our business prior to
our Initial Business Combination to include approximately
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a "no-shop" provision (a provision designed to keep target businesses from "shopping" around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed Initial Business Combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a "no-shop" provision would be determined based on the terms of the specific Business Combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
In order to fund working capital deficiencies or finance transaction costs in
connection with an intended Initial Business Combination, our Sponsor or an
affiliate of our Sponsor or certain of our officers and directors may, but are
not obligated to, loan us funds on a non-interest bearing basis as may be
required. If we complete our Initial Business Combination, we would repay such
loaned amounts. In the event that our Initial Business Combination does not
close, we may use a portion of the working capital held outside the trust
account to repay such loaned amounts but no proceeds from our trust account
would be used for such repayment. Up to
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Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon completion of our Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. In addition, we intend to target businesses larger than we could acquire with the net proceeds of the Initial Public Offering and the sale of the Placement Units, and may as a result be required to seek additional financing to complete such proposed Initial Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Initial Business Combination. If we are unable to complete our Initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our Initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Related Party Transactions
The Sponsor loaned the Company an aggregate of
On
On
The Sponsor has agreed, commencing from the date that the Company's securities
are first listed on NASDAQ through the earlier of the Company's consummation of
a Business Combination and its liquidation, to make available to the Company
certain general and administrative services, including office space, utilities
and administrative services, as the Company may require from time to time. The
Company has agreed to pay the Sponsor
In order to finance transaction costs in connection with a Business Combination,
the Sponsor or an affiliate of the Sponsor, or the Company's officers and
directors may, but are not obligated to, loan the Company funds as may be
required ("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, up to
Our Sponsor has agreed to purchase an aggregate of 377,331 Placement Units at a
price of
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Our initial stockholders have agreed to waive their redemption rights with respect to any Founder Shares or Placement Shares (i) in connection with the consummation of a Business Combination, (ii) in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection with our Initial Business Combination or certain amendments to our amended and restated certificate of incorporation prior thereto, to redeem 100% of our Public Shares if we do not complete our Initial Business Combination within 12 months from the completion of the Initial Public Offering (or up to 18 months from the closing of the Initial Public Offering) or with respect to any other provision relating to stockholders' rights or pre-Initial Business Combination activity and (iii) if we fail to consummate a Business Combination within 12 months from the completion of the Initial Public Offering (or up to 18 months from the closing of the Initial Public Offering) or if we liquidate prior to the expiration of the 12-month period (or up to 18 months from the closing of the IPO). However, our initial stockholders will be entitled to redemption rights with respect to any Public Shares held by them if we fail to consummate a Business Combination or liquidate within the 12-month period (or up to 18 months from the closing of the IPO).
Pursuant to a registration rights agreement we have entered into with our initial stockholders, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of units issued upon conversion of Working Capital Loans, if any, are entitled under the registration rights agreement to make up to three (3) demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. We will bear the costs and expenses of filing any such registration statements. See the section of this report entitled "Certain Relationships and Related Party Transactions."
Off-balance Sheet Financing Arrangements
We did not have any off-balance sheet arrangements as of
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Recent accounting standards
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.
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