PROGRESS ACQUISITION CORP. References in this quarterly report on Form 10-Q (the "Quarterly Report") to the
"Company," "
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. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described in our other
Overview
We were formed on
? may significantly reduce the equity interest of our stockholders, which
dilution would increase if the anti-dilution provisions in our Class B common
stock resulted in the issuance of our Class A common stock on a greater than
one-to-one basis upon conversion of our Class B common stock;
? may subordinate the rights of holders of shares of Class A common stock if we
issue shares of preferred stock with rights senior to those afforded to our
shares of Class A common stock;
? will likely cause a change in control if a substantial number of our shares of
Class A 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; and
? 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.
18
On
On
On
Following the closing of our initial public offering on
If we are unable to complete our initial business combination by
Our amended and restated certificate of incorporation provides that we will have
only until
Results of Operations
As of
19
For the three months ended
For the three months ended
Going Concern and Liquidity
As of
Prior to the completion of the Initial Public Offering, our liquidity needs had
been satisfied through a payment from the Sponsor of
In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor, officers, directors and their affiliates may, but are not obligated to, provide us Working Capital Loans, as defined below. To date, there were no amounts outstanding under any Working Capital Loans.
We anticipate that the
We believe we will need to raise additional funds in order to meet the expenditures required for operating our business. We will need to raise additional capital through loans from our Sponsor, officers, directors, or third parties. None of the Sponsor, officers or directors are under any obligation to advance funds to, or to invest in, us. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.
In connection with our assessment of going concern considerations in accordance
with FASB's Accounting Standards Update ("ASU") 2014-15, "Disclosures of
Uncertainties about an Entity's Ability to Continue as a Going Concern,"
management also determined that the liquidity condition and date for mandatory
liquidation and dissolution raise substantial doubt about our ability to
continue as a going concern through
These conditions raise substantial doubt about our ability to continue as a
going concern one year from the issuance date of the financial statements.
Management plans to address this uncertainty through loans from our Sponsor,
officers, directors, or third parties, and the consummation of a Business
Combination before
20
Critical Accounting Policies and Estimates
The preparation of the 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:
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and Hedging". Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the private placement warrants are a derivative liability.
Common Stock Subject to Possible Redemption
All of the 17,250,000 Class A 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 stockholder
vote or tender offer in connection with the 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. 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 Stock
Earnings and losses are shared pro rata between the redeemable shares and
non-redeemable shares. The 13,275,000 potential common stock for outstanding
warrants to purchase the Company's shares were excluded from diluted earnings
per share for the three months ended
Off-Balance Sheet Arrangements
As of
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
21
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of the independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an "emerging growth company," whichever is earlier.
© Edgar Online, source
