PROFICIENT ALPHA ACQUISITION CORP. References to the "Company," "our," "us" or "we" refer to
Overview
We are a blank check company incorporated on
The issuance of additional shares of Common Stock or preferred stock:
? may significantly reduce the equity interest of our stockholders;
? may subordinate the rights of holders of shares of Common Stock if we issue
shares of preferred stock with rights senior to those afforded to our shares
of Common Stock;
? will likely cause a change in control if a substantial number of our 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 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.
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.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from inception through
(9) Table of Contents Operating Expenses
We had operating expenses of
We will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a Business Combination. However, our operating expenses are difficult to predict due to the uncertainty of the Business Combination, and it may be necessary to continuously raise additional capital to sustain operations.
For the three months ended
Liquidity and Capital Resources
For the three months ended
For the three months ended
There was no cash flow from financing activities during the three months ended
As of
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our initial Business Combination. We may withdraw interest from the Trust Account to pay income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of
In order to finance transaction costs in connection with an intended initial
Business Combination, our Sponsor, initial stockholders, officers, directors or
their affiliates may, but are not obligated to, loan us funds as may be
required. If we consummate an initial Business Combination, we would repay such
loaned amounts. In the event that the 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 do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.
However, if the actual costs to identify a target business, undertake in-depth due diligence and negotiate a Business Combination exceed our estimated amount, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing by issuance of additional securities or incurrence of debt to consummate our initial Business Combination or to fulfill our obligations to redeem a significant number of our public shares upon closing of our initial Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the closing of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such initial Business Combination. We cannot provide any assurance that financing will be available to us on commercially acceptable terms, if at all. If we are unable to complete our initial Business Combination due to insufficient funds, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
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Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities which would be considered
off-balance sheet arrangements as of
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than agreements to pay our directors
and officers a monthly fee of total
We pay
After our initial business combination, members of our management team who
remain with us may be paid consulting, management or other fees from the
combined company with any and all amounts being fully disclosed to stockholders,
to the extent then known, in the proxy solicitation materials furnished to our
stockholders. It is unlikely the amount of such compensation will be known at
the time of a stockholder meeting held to consider an initial business
combination, as it will be up to the directors of the post-combination business
to determine executive and director compensation. In this event, such
compensation will be publicly disclosed at the time of its determination in a
Current Report on Form 8-K, as required by the
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. The Company has identified the following critical accounting policy:
Common Stock subject to possible redemption
We account for our Common Stock subject to possible conversion in accordance
with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity."
Common Stock subject to mandatory redemption are classified as a liability
instrument and are measured at fair value. Conditionally redeemable Common Stock
(including shares of Common Stock that feature 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) are classified as temporary
equity. At all other times, shares of Common Stock are classified as
stockholders' equity. Our 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
Recent Accounting Pronouncements
Management does 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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