References in this report (the "Quarterly Report") to "we," "us," "our" or the
"Company" refer to
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
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 Quarterly
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,"
"may," "might," "plan," "possible," "potential," "should, "would" 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 the Risk Factors section of the
Company's final prospectus for our initial public offering filed with the
Overview
We are a newly formed blank check company, incorporated in the
The issuance of additional shares of any class of common stock or the creation of one or more classes of preferred stock during our initial Business Combination:
? may significantly dilute the equity interest of investors in the Offering who
would not have pre-emption rights in respect of any such issue;
may subordinate the rights of holders of any class of common stock if the
? rights, preferences, designations and limitations attaching to the preferred
shares are senior to those afforded our shares of Class A common stock;
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could cause a change in control if a substantial number of 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 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 share ownership or voting rights of a person seeking to obtain
control of us; and
? may adversely affect prevailing market prices for our shares of Class A common
stock.
Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:
? default and foreclosure on our assets if our operating revenues after our
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 is payable on demand;
our inability to obtain necessary additional financing if any document
? governing such debt contains covenants restricting our ability to obtain such
financing while the debt security is outstanding;
? our inability to pay dividends on our shares of 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.
We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial Business Combination will be successful.
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Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date.
For the period from
For the three months ended
For the period from
Liquidity and Capital Resources
During the period from
The Founder agreed to forfeit up to 468,750 Founder Shares to the extent that
the over-allotment option is not exercised in full by the Underwriters. The
forfeiture would be adjusted to the extent that the over-allotment option was
not exercised in full by the Underwriters so that the Founder and the Insiders
collectively will own approximately 20% of the Company's issued and outstanding
shares after the Offering. On
On
As of
For the period from
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We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (which
interest shall be net of taxes payable by us), to acquire a target business or
businesses to complete our initial Business Combination and to pay our expenses
relating thereto. We may withdraw interest to pay taxes. We estimate our annual
franchise tax obligations to be approximately
As of
If our estimates of the costs of undertaking in-depth due diligence and
negotiating our initial Business Combination are less than the actual amount
necessary to do so, we may have insufficient funds available to operate our
business prior to our initial Business Combination. Moreover, we may need to
obtain additional financing either to consummate our initial Business
Combination or because we become obligated to redeem a significant number of our
public shares upon consummation of our initial Business Combination, in which
case we may issue additional securities or incur debt in connection with such
Business Combination. In order to finance operating and/or transaction costs in
connection with a Business Combination, our Founder, executive officers,
directors, or their affiliates may, but are not obligated to, loan us funds. 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
Following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Off-Balance Sheet Arrangements
As of
Contractual Obligations
As of
23 Table of Contents Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Emerging Growth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, will adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.
Net Loss Per Share of Common Stock
Net loss per share of common stock is computed by dividing net loss by the
weighted-average number of shares of common stock outstanding for the period.
The Company applies the two-class method in calculating the net loss per common
share. Weighted average shares for the three-months ended
Class A Common Stock subject to possible redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Class A common stock subject to
mandatory redemption (if any) is classified as a liability instrument and is
measured at fair value. Conditionally redeemable Class A common stock (including
Class A common stock that features redemption rights that are either within the
control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within our control) is classified as temporary equity. At all
other times, Class A common stock is classified as stockholders' equity. Our
Class A common stock features certain redemption rights that are considered to
be outside of our control and subject to occurrence of uncertain future events.
Accordingly, as of
Warrant Liability
The Company accounts for warrants for shares of the Company's Class A common stock that are not indexed to its own stock as liabilities at fair value on the condensed balance sheet. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other expense on the condensed statement of operations and comprehensive loss. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the Class A common stock warrants. At that time, the portion of the warrant liability related to the Class A common stock warrants will be reclassified to additional paid-in capital.
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Recent Accounting Pronouncements
We do not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our condensed financial statements.
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