This Report includes "forward-looking statements" that are not historical facts
and involve risks and uncertainties that could cause actual results to differ
materially from those expected and projected. All statements, other than
statements of historical fact included in this Report including, without
limitation, statements in this "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. Words such as "expect,"
"believe," "anticipate," "intend," "estimate," "seek" and variations and similar
words and expressions are intended to identify such forward-looking statements.
Such forward-looking statements relate to future events or future performance,
but reflect management's current beliefs, based on information currently
available. A number of factors could cause actual events, performance or results
to differ materially from the events, performance and results discussed in the
forward-looking statements. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the
forward-looking statements, please refer to "Cautionary Note Regarding
Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and
elsewhere in this Report. The Company's securities filings can be accessed on
the EDGAR section of the
Overview
We are a blank check company incorporated on
The issuance of additional shares of Class A common stock, Opco Units (and corresponding shares of our Class V common stock) or shares of preferred stock:
• may significantly dilute the equity interest of investors in our Public Offering, which dilution would increase if the anti-dilution provisions in the founder shares resulted in an increase in the number of Class A Units of Opco into which the ClassB Units of Opco will convert; • 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 in control if a substantial number of shares of our common stock are 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 an initial 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; 63
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• 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 Class A 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, our ability to pay expenses, make capital expenditures and acquisitions and fund 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; • 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.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities for the period from
For the period from
Liquidity and Capital Resources
On
For the period from
For the period from
For the period from
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proceeds from an advance from an affiliate of our sponsor, and
As of
In order to fund working capital deficiencies or finance transaction costs in
connection with an intended initial business combination or to finance possible
costs in connection with the contribution of an addition amount to be held in
the trust account if we extend our time to complete an 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 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
We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. We may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing to complete our business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we do not 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.
Related Party Transactions
Administrative Support Agreement
We have entered into an Administrative Support Agreement pursuant to which we
will reimburse our sponsor or an affiliate thereof in an amount equal to
Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
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Related Party Loans
On
In addition, in order to finance transaction costs in connection with an
intended initial business combination or possible costs in connection with the
contribution of an additional amount to be held in the Trust Account if we
extend our time to complete an 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 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
Private Placement Warrants
Our sponsor has purchased an aggregate of 12,225,000 private placement warrants
at a price of
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of
Contractual Obligations
Registration Rights Agreement
The holders of the founder shares, sponsor shares, private placement warrants
and warrants that may be issued upon conversion of working capital loans (and
any shares of our Class A common stock issuable upon the exercise of the private
placement warrants or exchange of the founder shares issued upon exercise of the
private placement warrants and warrants that may be issued upon conversion of
working capital loans and upon exchange of the founder shares) are entitled to
registration rights pursuant to a registration rights agreement signed on the
effective date of our Public Offering, requiring us to register such securities
for resale (in the case of the founder shares, only after the founder shares
become exchangeable for the shares of Class A common stock). The holders of
these securities, having at least
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rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter purchased 3,000,000 units to cover over-allotments at the Public Offering price, less the underwriting commissions.
The underwriter was paid a cash underwriting discount of two percent (2%) of the
gross proceeds of the Public Offering, or
Critical Accounting Policies
The preparation of consolidated financial statements and related disclosures in
conformity with accounting principles generally accepted in
Warrants
We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Accounting Standards Codification ("ASC") Topic 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The public warrants and private placement warrants are equity classified.
Class A common stock subject to redemption
All of the 23,000,000 shares of Class A common stock sold as part of the units
in our Public Offering and the 1,250 shares of Class A common stock purchased by
an affiliate of our sponsor on
We recognize 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. Such changes are reflected in retained earnings, or in the absence of retained earnings, in additional paid-in capital.
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Net Income (Loss) Per Share of Common Stock
Net income (loss) per common share is computed by dividing net income (loss) by
the weighted-average number of shares of common stock outstanding during the
period. We have not considered the effect of the warrants sold in the Public
Offering and private placement to purchase an aggregate of 23,725,000 shares in
the calculation of diluted income (loss) per share, since the exercise of the
warrants is contingent upon the occurrence of future events. In order to
determine the net income (loss) attributable to both the Class A common stock
and Class V common stock, we first considered the total income (loss) allocable
to both sets of shares. This is calculated using the total net income (loss)
less any dividends paid. For purposes of calculating net income (loss) per
share, any remeasurement of the accretion to redemption value of the Class A
common stock subject to possible redemption was considered to be dividends paid
to the holders of the Class A common stock. Subsequent to calculating the total
income (loss) allocable to both sets of shares, the Company split the amount to
be allocated pro rata between Class A and Class V common stock for the period
from
Recent Accounting Standards
In
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our consolidated financial statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item. Item 8. Financial Statements and Supplementary Data.
Reference is made to Pages F-1 through F-20 comprising a portion of this Report.
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