References in this report (the "Annual Report") to "we," "us" or the "Company"
refer to
Overview
We are a blank check company incorporated in
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
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Liquidity and Capital Resources
For the period from
For the period from
For the period from
The registration statement for the Company's Initial Public Offering was
declared effective on
Simultaneously with the closing of the Initial Public Offering, the Company
consummated the sale of 634,375 units (the "Placement Units") at a price of
Following the closing of the Initial Public Offering on
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the funds held in the trust account and not previously released to us to pay our taxes (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay our taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. We expect the only taxes payable by us out of the funds in the trust account will be income and franchise taxes, if any. To the extent that our common stock or debt is used, in whole or in part, as consideration to complete our initial 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.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an 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 complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
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The accompanying financial statements have been prepared in conformity with
GAAP, which contemplates continuation of the Company as a going concern and the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has incurred and expects to continue to incur
significant costs in pursuit of the Company's financing and acquisition plans.
Management plans to address this uncertainty with the successful closing of the
business combination. The Company will have until
Off-Balance Sheet Arrangements
As of
Contractual Obligations
Registration and Stockholder Rights Agreement
The holders of the Founder Shares and Placement Units (including securities contained therein) and Units (including securities contained therein) that may be issued upon conversion of working capital loans and extension loans, and any shares of Class A common stock issuable upon the exercise of the Placement Warrants and any shares of Class A common stock and warrants (and underlying Class A common stock) that may be issued upon conversion of the Units issued as part of the working capital loans and extension loans and Class A common stock issuable upon conversion of the Founder Shares, will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Proposed Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A common stock). The holders of these securities are entitled to make up to two demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.
Administrative Support Agreement
The Company's Sponsor has agreed, commencing from the date of the Initial Public
Offering through the earlier of the Company's consummation of a business
combination and its liquidation, to make available to the Company certain
general and administrative services, including office space, utilities and
administrative services, as the Company may require from time to time. The
Company has agreed to pay to
10 Underwriters Agreement
Simultaneously with the Initial Public Offering, the underwriters fully
exercised the over-allotment option to purchase an additional 1,500,000 Units at
an offering price of
The underwriters were paid a cash underwriting discount of
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
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 ("ASC 815"). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For derivative instruments that are classified as equity, the derivative instruments are initially measured at fair value (or allocated value), and subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity.
Warrants
The Company accounts 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 ASC 480 and 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 as liabilities 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 are not precluded from equity classification, and are accounted for as such on the date of issuance, and each balance sheet date thereafter.
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Common Stock Subject to Possible Redemption
All of the Class A common stock sold as part of the Units in the Initial Public
Offering 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 ASC 480, conditionally
redeemable Class A common stock (including shares of Class A 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
the Company's control) is classified as temporary equity. Ordinary liquidation
events, which involve the redemption and liquidation of all of the entity's
equity instruments, are excluded from the provisions of ASC 480. Although the
Company did not specify a maximum redemption threshold, its charter provides
that currently, the Company will not redeem its Public Shares in an amount that
would cause its net tangible assets (stockholders' equity) to be less than
Net Income Per Share
Net income per share is computed by dividing net income by the weighted-average number of shares outstanding during the period. Therefore, the income per share calculation allocates income shared pro rata between Class A and Class B common stock. As a result, the calculated net income per share is the same for Class A and Class B common stock. The Company has not considered the effect of the Public Warrants and Placement Warrants, to purchase an aggregate of 12,134,375 shares in the calculation of income per share, since the exercise of the warrants is contingent upon the occurrence of future events.
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 the Company's financial statements.
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