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 (the "Securities Act"),
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 on
The issuance of additional shares of Class A common stock, Class A Units and
Class
• may significantly dilute the equity interest of investors in our Public Offering, which dilution would increase if the anti-dilution provisions in the ClassB Units of Opco initially acquired by our sponsor prior to our Public Offering (or the Class A Units of Opco into which such ClassB Units will convert) and a corresponding number of shares of our Class V common stock ("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 Class A common stock and Class V common stock ("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 21
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• 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; • 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 nine months ended
For the three months ended
For the three months ended
For the nine months ended
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For the period from
Liquidity and Capital Resources
On
For the nine months ended
For the period from
For the nine months ended
For the period from
There were no cash flows from investing activities for the nine months ended
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 ("Working Capital Loans"). 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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funding loans may be convertible into warrants of the post business combination
entity at a price of
We have incurred and expect to continue to incur significant costs in pursuit of
our acquisition plans. We anticipate that the cash held outside of the trust
account as of
We plan to address this uncertainty through our initial business combination.
There is no assurance that our plans to consummate our initial business
combination will be successful or successful by
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 up 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.
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
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identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
Private Placement Warrants
Our sponsor 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
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 Estimates
The preparation of consolidated financial statements and related disclosures in
conformity with accounting principles generally accepted in
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the date of the consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting estimates:
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 warrants sold as part of the units in our Public Offering ("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.
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 three and
nine months ended
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our consolidated financial statements.
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JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are 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 consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
As an "emerging growth company," we are not required to, among other things, (i) provide an independent registered public accounting firm's attestation report on our 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 independent registered public accounting firm's report providing additional information about the audit and the consolidated 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 Chief Executive Officer'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. Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item. Item 4. Controls and Procedures
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief
Executive Officer and Chief Financial Officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of
Internal Control over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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