OCA ACQUISITION CORP. References to the "Company," "our," "us" or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report 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. Such statements include, but are not limited to, possible business
combinations and the financing thereof, and related matters, as well as all
other statements other than statements of historical fact
included in this Quarterly Report. 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
We 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.
The registration statement for our initial public offering was declared
effective on
Simultaneously with the closing of the initial public offering, we consummated
the private placement of 7,057,000 warrants at a price of
Upon the closing of the initial public offering and sale of the private
placement warrants on
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If we have not completed an initial business combination within 24 months from
the closing of the initial public offering, 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 the 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 to pay its taxes (less up to
Results of Operations
For the three months ended
For the three months ended
Our business activities from inception to
Liquidity and Going Concern
As of
The Company's liquidity needs up to our Initial Public Offering had been
satisfied through a capital contribution from the sponsor of
On
Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of an initial business combination or one year from this filing. Over this time period, we will be using these funds held outside of the trust account for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the initial business combination.
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In connection with the Company's assessment of going concern considerations in
accordance with FASB's Accounting Standards Update ("ASU") Topic 2014-15,
"Disclosures of Uncertainties about an Entity's Ability to Continue as a Going
Concern," the Company has until
Contractual Obligations
We did not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities,
other than deferred underwriting fees of
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with US GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Except as set forth below, there have been no significant changes in our
critical accounting policies as discussed in our Annual Report Form 10-K files
with the
Warrants Liability
We evaluated the warrants in accordance with Financial Accounting Standard
Board's ("FASB") Accounting Standards Codification ("ASC") Topic 815-40,
"Derivatives and Hedging - Contracts in Entity's Own Equity" ("ASC 815-40") and
concluded that a provision in the Warrant Agreement, dated
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Class A Common Stock Subject to Possible Redemption
All of the 14,950,000 shares of Class A commons stock sold as part of the units
in the initial public offering contain a redemption feature which allows for the
redemption of such public shares in connection with the Company's liquidation,
if there is a stockholder vote or tender offer in connection with the initial
business combination and in connection with certain amendments to the Company's
amended and restated certificate of incorporation. In accordance with
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.
Net Income Per Common Share
The Company complies with accounting and disclosure requirements of ASC Topic 260, "Earnings Per Share". Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company has two classes of shares, Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of shares. The Company has not considered the effect of the warrants sold in the initial public offering and the sale of the private placement warrants to purchase an aggregate of 14,532,500 of the Company's Class A common stock in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net income (loss) per common share for the period. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
Fair Value of Financial Instruments
The Company follows the guidance in ASC Topic 820, "Fair Value Measurement," for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company's financial assets and liabilities reflects management's estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1 - Valuations based on unadjusted quoted prices in active markets for
identical assets or liabilities that the Company has the ability to
access. Valuation adjustments and block discounts are not being
applied. Since valuations are based on quoted prices that are readily
and regularly available in an active market, valuation of these
securities does not entail a significant degree of judgment.
Level 2 - Valuations based on (i) quoted prices in active markets for similar
assets and liabilities, (ii) quoted prices in markets that are not
active for identical or similar assets, (iii) inputs other than quoted
prices for the assets or liabilities, or (iv) inputs that are derived
principally from or corroborated by market through correlation or other
means.
Level 3 - Valuations based on inputs that are unobservable and significant to the
overall fair value measurement.
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Recent Accounting Pronouncements
The FASB issued final guidance that amends ASC 815 and other topics to expand
and clarify the use of what is now called the portfolio layer method for fair
value hedges of interest rate risk. The amendments address stakeholder concerns
about the application of this method, which was called the last-of-layer method
when it was introduced in ASU 2017-12. This method was intended to reduce
complexity when applying fair value hedge accounting to portfolios of prepayable
financial assets or one or more beneficial interests secured by a portfolio of
prepayable financial instruments; but stakeholders noted that limiting hedge
accounting to a single layer of a closed portfolio was inconsistent with
entities' risk management objectives and decreased the model's usefulness.
Stakeholders also said that nonprepayable financial assets should be eligible to
be included in the closed portfolio being hedged and that more guidance on how
to account for the fair value hedge basis adjustment associated with existing
last-of-layer hedges was needed. Stakeholders also said that nonprepayable
financial assets should be eligible to be included in the closed portfolio being
hedged and that more guidance on how to account for the fair value hedge basis
adjustment associated with existing last-of-layer hedges was needed. This
guidance is effective for fiscal years beginning after
The FASB issued final guidance1 amending ASC 310 to eliminate the recognition
and measurement guidance for a troubled debt restructuring (TDR) for creditors
that have adopted the new credit losses guidance in ASC 326. The guidance also
requires public business entities to present gross write-offs by year of
origination in their vintage disclosures. The FASB issued the guidance in
response to stakeholder feedback as part of the postimplementation review of its
new credit losses standard. Stakeholders said the TDR accounting guidance was no
longer relevant because under ASC 326 entities account for full lifetime
expected credit losses. They also raised questions about whether entities need
to present gross write-offs and gross recoveries in vintage disclosures, since
the guidance doesn't specifically address this point, but the disclosures are
included in an example. Financial statement users told the FASB that information
about gross write-offs is valuable. For entities that have adopted the guidance
in ASC 326, the amendments are effective for fiscal years beginning after
In
The Company's management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.
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Off-Balance Sheet Arrangements
As of
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