All statements other than statements of historical fact included in this
Form 10-K including, without limitation, statements under "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.
When used in this Form 10-K, words such as "anticipate," "believe," "estimate,"
"expect," "intend" and similar expressions, as they relate to us or the
Company's management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of management, as well as assumptions made
by, and information currently available to, the Company's management. Actual
results could differ materially from those contemplated by the forward-looking
statements as a result of certain factors detailed in our filings with the
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on businesses in the financial services industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of
The registration statement for the Company's Initial Public Offering was
declared effective on
Each Unit consists of one common stock of the Company, par value
Simultaneously with the closing of the IPO, the Company consummated private
placements ( the "Private Placements") of i) 1,000,000
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Each Private Unit consists of one Common Stock and three-quarters of one
non-redeemable warrant ("Private Unit Warrant"). Each whole Private Unit Warrant
will entitle the holder to purchase one share of common stock at an exercise
price of
Each
Each
The Company Units are listed on NASDAQ. The Company's management has broad
discretion with respect to the specific application of the net proceeds of the
Following the closing of the IPO on
The Company will provide its shareholders with the opportunity to redeem all or
a portion of their Public Shares upon the completion of a Business Combination
either (i) in connection with a shareholder meeting called to approve the
Business Combination or (ii) by means of a tender offer. In connection with a
proposed Business Combination, the Company may seek shareholder approval of a
Business Combination at a meeting called for such purpose at which shareholders
may seek to redeem their shares, regardless of whether they vote for or against
the proposed Business Combination. The Company will proceed with a Business
Combination only if the Company has net tangible assets of at least
If the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company's amended and restated certificate of incorporation provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a "group" (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), will be restricted from seeking redemption rights with respect to 15% or more of the Public Shares without the Company's prior written consent.
The holders of Public Shares will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company's warrants.
If a shareholder vote is not required and the Company does not decide to hold a
shareholder vote for business or other legal reasons, the Company will, pursuant
to its amended and restated certificate of incorporation, offer such redemption
pursuant to the tender offer rules of the
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The Sponsor, officers, directors and advisors (the "Initial Shareholders") have
agreed (a) to vote their Founder Shares (as defined in Note 5) as well as any
common shares underlying the Private Units, and any Public Shares purchased
during or after the IPO in favor of a Business Combination, (b) not to propose
an amendment to the Company's amended and restated certificate of incorporation
with respect to the Company's pre-Business Combination activities prior to the
consummation of a Business Combination unless the Company provides dissenting
public shareholders with the opportunity to redeem their Public Shares in
conjunction with any such amendment; (c) not to redeem any shares (including the
Founder Shares as well as any common shares underlying the Private Units) into
the right to receive cash from the Trust Account in connection with a
shareholder vote to approve a Business Combination (or to sell any shares in a
tender offer in connection with a Business Combination if the Company does not
seek shareholder approval in connection therewith) or a vote to amend the
provisions of the amended and restated certificate of incorporation relating to
shareholders' rights of pre-Business Combination activity and (d) that the
Founder Shares, the Private Units and
The Company will have until 15 months (or 18 months if the time to complete a
business combination is extended as described herein) from the closing of the
IPO to consummate a Business Combination. In addition, if the Company
anticipates that it may not be able to consummate an initial business
combination within 15 months, the Company's insiders or their affiliates may,
but are not obligated to, extend the period of time to consummate a business
combination by an additional three months (for a total of 18 months to complete
a business combination) (the "Combination Period"). In order to extend the time
available for the Company to consummate a Business Combination, the Sponsor or
its affiliate or designees must deposit into the Trust Account
If the Company is unable to complete a Business Combination within the
Combination Period, the Company will (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but no more than
ten business days thereafter, redeem 100% of the outstanding Public Shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account, including interest earned (net of taxes payable and less
interest to pay dissolution expenses up to
The Sponsor has agreed that it will be liable to the Company, if and to the
extent any claims by a vendor for services rendered or products sold to the
Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amounts in the Trust Account
to below
Recent Developments
On
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The Merger Agreement provides that, among other things, at the closing (the "Closing") of the transactions contemplated by the Merger Agreement, Merger Sub will merge with and into iCoreConnect (the "Merger"), with iCoreConnect surviving as a wholly-owned subsidiary of FGMC. In connection with the Merger, FGMC will change its name to "iCoreConnect Inc." The Merger and the other transactions contemplated by the Merger Agreement are hereinafter referred to as the "Business Combination." The Business Combination is expected to close in the second quarter of 2023, subject to customary closing conditions, including the receipt of certain governmental approvals and the required approval by the stockholders of FGMC and iCoreConnect.
Pre-Closing FGMC Conversion
Prior to the Closing, each share of FGMC common stock, par value
· The holders of Preferred Stock shall not be entitled to vote on any matters
submitted to the stockholders of FGMC. From and after the date of the issuance of any shares of FGMC Preferred Stock, dividends shall accrue at the rate per annum of 12% of the original issue price
· for each share of FGMC Preferred Stock, prior and in preference to any
declaration or payment of any other dividend (subject to appropriate adjustments). Dividends shall accrue from day to day and shall be cumulative and shall be
· payable within fifteen (15) business days after the anniversary of the date of
the original issuance of the FGMC Preferred Stock to each holder of FGMC Preferred Stock as of such date. From the closing of the Business Combination until the second anniversary of the date of the original issuance of the FGMC Preferred Stock, FGMC may, at its
· option, pay all or part of the accruing dividends on the FGMC Preferred Stock
by issuing and delivering additional shares of FGMC Preferred Stock to the holders thereof. FGMC shall not declare, pay or set aside any dividends on shares of any other
· class or series of capital stock of FGMC the holders of the FGMC Preferred
Stock then outstanding shall first receive dividends due and owing on each outstanding share of FGMC Preferred Stock. In the event of any liquidation, dissolution or winding up of FGMC, the holders of shares of FGMC Preferred Stock then outstanding shall be entitled to be paid out of the assets of FGMC available for distribution to its stockholders an amount per share equal to the greater of (i) one times the applicable original
· issue price, plus any accrued and unpaid dividends, and (ii) such amount as
would have been payable had all shares of FGMC Preferred Stock been converted into FGMC Common Stock pursuant to the following paragraph immediately prior to such liquidation, dissolution or winding up, before any payment shall be made to the holders of FGMC Common Stock. After 24 months from the closing of the Business Combination, in the event the closing share price of the FGMC Common Stock shall exceed 140% of the Conversion Price (as defined below) then in effect, then (i) each outstanding share of FGMC Preferred Stock shall automatically be converted into such number
· of shares of FGMC Common Stock as is determined by dividing the original issue
price by the Conversion Price in effect at the time of conversion and (ii) such shares may not be reissued by FGMC, subject to adjustment. At the time of such conversion, FGMC shall declare and pay all of the dividends that are accrued and unpaid as of the time of the conversion by either, at the option of FGMC, (i) issuing additional FGMC Preferred Stock or (ii) paying cash. The "Conversion Price" shall initially mean, as to the Preferred Stock,$10 per share; provided that the Conversion Price shall be reset to the lesser of$10 or 20% above the simple average of the volume weighted average price on the 20 trading days following 12 months after the later of (x) the date hereof or (y)
· the registration of the Common Stock underlying the Preferred Stock; provided
further that such Conversion Price shall be no greater than$10 and no less than$2 and subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the applicable Preferred Stock. Each share of FGMC Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid
· and non-assessable shares of FGMC Common Stock as is determined by dividing the
original issue price by the Conversion Price in effect at the time of conversion, subject to adjustment for stock splits, dividends, reorganization, recapitalization etc. Immediately prior to any such optional conversion FGMC shall pay all dividends
· on the FGMC Preferred Stock being converted that are accrued and unpaid as of
such time by, either, at the option of FGMC: (i) issuing additional FGMC
Preferred Stock or (ii) paying cash.
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Pre-Closing iCoreConnect Conversion
Prior to the Closing, (i) each vested, issued and outstanding option to purchase
iCoreConnect common stock par value
Business Combination Consideration
The aggregate consideration to be received by the iCoreConnect stockholders is
based on a pre-transaction equity value of
Governance
The parties have agreed that effective immediately after the Closing of the Business Combination, the FGMC Board will be comprised of the directors designated by iCoreConnect by written notice to FGMC and reasonably acceptable to FGMC.
Representations and Warranties; Covenants
The Merger Agreement contains representations, warranties and covenants of each
of the parties thereto that are customary for transactions of this type,
including, among others, covenants providing for (i) certain limitations on the
operation of the parties' respective businesses prior to consummation of the
Business Combination, (ii) the parties' efforts to satisfy conditions to
consummation of the Business Combination, including by obtaining necessary
approvals from governmental agencies (including
In addition, FGMC has agreed to adopt an equity incentive plan, as described in the Merger Agreement.
Conditions to
The obligations of FGMC and iCoreConnect to consummate the Business Combination
are subject to certain closing conditions, including, but not limited to, (i)
the approval of FGMC's stockholders, (ii) the approval of iCoreConnect's
stockholders, (iii) the expiration or termination of the applicable waiting
period under the HSR Act, (iv) FGMC's Form S-4 registration statement becoming
effective and (v) FGMC having at least
In addition, the obligations of FGMC and Merger Sub to consummate the Business
Combination are also subject to the fulfillment (or waiver) of other closing
conditions, including, but not limited to, (i) the representations and
warranties of iCoreConnect being true and correct to the standards applicable to
such representations and warranties and each of the covenants of iCoreConnect
having been performed or complied with in all material respects, (ii) delivery
of certain ancillary agreements required to be executed and delivered in
connection with the Business Combination; (iii) no Company Material Adverse
Effect (as defined in the Merger Agreement) having occurred, (iv) iCoreConnect
having effected the conversions of outstanding iCoreConnect option, warrants and
convertible promissory notes described above and (v) the
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The obligation of iCoreConnect to consummate the Business Combination is also
subject to the fulfillment (or waiver) of other closing conditions, including,
but not limited to, (i) the representations and warranties of FGMC and Merger
Sub being true and correct to the standards applicable to such representations
and warranties and each of the covenants of FGMC and Merger Sub having been
performed or complied with in all material respects and (ii) the shares of FGMC
Common Stock issuable in connection with the Business Combination being listed
on the
Termination
The Merger Agreement may be terminated under certain customary and limited
circumstances prior to the Closing, including, but not limited to, (i) by mutual
written consent of FGMC and iCoreConnect, (ii) by FGMC, on the one hand, or
iCoreConnect, on the other hand, if there is any breach of the representations,
warranties, covenant or agreement of the other party as set forth in the Merger
Agreement, in each case, such that certain conditions to closing cannot be
satisfied and the breach or breaches of such representations or warranties or
the failure to perform such covenant or agreement, as applicable, are not cured
or cannot be cured within certain specified time periods, (iii) by either FGMC
or iCoreConnect if the Business Combination is not consummated prior to the
later of (A)
A copy of the Merger Agreement is filed with the Current Report on Form 8-K,
filed
Certain Related Agreements
The Business Combination Agreement contemplates the execution of various additional agreements and instruments, on or before the Closing, including, among others, the following:
iCoreConnect Support Agreement
In connection with the execution of the Merger Agreement, certain stockholders of iCoreConnect have entered into a support agreement (the "iCoreConnect Support Agreement") pursuant to which the stockholders of iCoreConnect that are parties to the iCoreConnect Support Agreement have agreed to vote all shares of common stock of iCoreConnect beneficially owned by them in favor of the Merger Agreement and related transactions (as more fully described in the iCoreConnect Support Agreement).
Sponsor Support Agreement
In connection with the execution of the Merger Agreement, FGMC, iCoreConnect,
18 Table of Contents Lock-Up Agreement
In connection with the Closing, the Sponsor and certain existing stockholders of FGMC and certain existing equityholders of iCoreConnect (each, a "Lock-up Holder") will enter into an agreement (the "Lock-Up Agreement"), pursuant to which and subject to certain customary exceptions, during the period commencing on the date of the Closing and ending on the date that is one hundred eighty (180) days after the consummation of the Business Combination such Lock-up Holder will agree not to (i) offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the Lock-up Shares (as defined in the Lock-Up Agreement, which shall include certain securities held by the Lock-Up Holders), (ii) enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such Lock-up Shares, whether any of these transactions are to be settled by delivery of any such Lock-up Shares, in cash or otherwise, (iii) publicly disclose the intention to make any offer, sale, pledge or disposition, or (iv) enter into any transaction, swap, hedge or other arrangement, or engage in any short sales with respect to any security of FGMC (as more fully described in the Lock-Up Agreement).
Amended and Restated Registration Rights Agreement
In connection with the Closing, FGMC will enter into an amended and restated
registration rights agreement (the "Amended and Restated Registration Rights
Agreement"), pursuant to which, the Registration Rights Agreement, dated as of
Sponsor Forfeiture Agreement
In connection with the execution of the Merger Agreement,
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities through
For the year ended
Liquidity and Capital Resources
On
19 Table of Contents
Simultaneously with the closing of the IPO, we completed the private sale of i)
1,000,000
For the year ended
In order to finance transaction costs in connection with a Business Combination,
the Sponsor or an affiliate of the Sponsor, or certain of our officers and
directors may, but are not obligated to, loan us funds as may be required
("Working Capital Loans"). As of
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a 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.
Off-Balance Sheet Arrangement
We have no obligations, assets, or liabilities, which would be considered
off-balance sheet arrangements as of
Contractual Obligations
Registration Rights
Pursuant to a registration rights agreement entered into on
Underwriting Agreement
The Company granted the underwriters a 45-day option to purchase up to 1,050,000
additional Units to cover over-allotments at the Initial Public Offering price.
On
Related Party Transactions Founder Shares
On
The Initial Shareholders have agreed not to transfer, assign or sell any of the
Founder Shares (except to certain permitted transferees) until, with respect to
50% of the Founder Shares, the earlier of (i) twelve months after the date of
the consummation of a Business Combination, or (ii) the date on which the
closing price of the Company's common stock equals or exceeds
20 Table of Contents
Administrative Services Agreement
We entered into an administrative services agreement (the "Administrative
Services Agreement") with the Sponsor on
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Basis of presentation
The accompanying financial statements are presented in
Common stock subject to possible redemption
The Company accounts for its common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Common stock subject to mandatory
redemption is classified as a liability instrument and is measured at fair
value. Conditionally redeemable common stock (including common stock that
features redemption rights that is 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. At all other times,
common stock is classified as stockholders' equity. The Company's common stock
features certain redemption rights that are considered to be outside of the
Company's control and subject to occurrence of uncertain future events.
Accordingly, at
The Company recognizes changes in redemption value using the "at redemption
value" method and accordingly recognizes changes in redemption value immediately
as they occur and adjusts the carrying value of redeemable shares to equal the
redemption value at the end of each reporting period. Such changes are reflected
in additional paid-in-capital. During the year ended
Warrants
The Company accounts for the 6,037,500 Public Warrants, 41,250 Private Unit
Warrants, 3,950,000
Deferred offering costs
Deferred offering costs consist of underwriting, legal, accounting and other
expenses incurred through the balance sheet date that are directly related to
the IPO and that are charged to shareholders equity upon the completion of the
IPO. Offering costs amounting to
21 Table of Contents Net income (loss) per share
The Company complies with accounting and disclosure requirements of ASC 260,
Earnings Per Share. The Company has redeemable and nonredeemable shares of
common stock. Income and losses are shared pro rata between the redeemable and
nonredeemable shares of common stock. Net income (loss) per share of common
stock is calculated by dividing the net income (loss) by the weighted average
shares of common stock outstanding for the respective period. Net loss for the
period from
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