The following discussion and analysis of the company's financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this Report.
Overview
We are a blank check company incorporated in
We have until
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.
68 Table of Contents Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities for the year ended
For the year ended
Liquidity, Capital Resources and Going Concern Consideration
On
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 and excluding deferred underwriting
commissions, to complete our initial business combination. We may withdraw
interest from the trust account to pay taxes, if any. To the extent that our
share capital or debt is used, in whole or in part, as consideration to complete
an 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. As of
In connection with our assessment of going concern considerations in accordance with FASB's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern", management has determined the liquidity condition and its inability to satisfy its obligations in the event of liquidation raises substantial doubt about our ability to continue as a going concern, if it does not complete a business combination prior to the end of the business combination period. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern. We intend to complete a business combination within the combination period.
We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete an initial business combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with 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 an initial business
combination, we may repay such loaned amounts out of the proceeds of the trust
account released to us. In the event that an 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. Upon completion of a business combination, up
to
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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 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 initial business combination.
If mandatory liquidation occurs, we may not have sufficient resources to pay our creditors based on our working capital deficit. If the Sponsor elects to exercise the extension option and deposits additional amounts to the Trust Account, those proceeds will not be available for use in operations, but rather fund the incremental redemption price. Interest earned on the Trust Account is not available for use in operations.
Off-Balance Sheet Financing 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 an agreement to pay KRP and
certain of its subsidiaries a total of
The underwriter is entitled to a deferred fee of
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Cash
Cash and cash equivalents include cash on hand and on deposit at banking
institutions as well as all highly liquid short-term investments with original
maturities of 90 days or less. The Company did not have any cash equivalents as
of
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage.
Redeemable Common Stock
All of the 23,000,000 Class A common stock as part of the Initial Public
Offering contain a redemption feature which allows for the redemption of such
public shares in connection with our liquidation if there is a shareholder vote
or tender offer in connection with the initial business combination and in
accordance with our amended and restated certificate of incorporation. In
accordance with
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480-10-S99, redemption provisions not solely within our control require common stock subject to redemption to be classified outside of permanent 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.
Offering Costs
The Company complies with the requirements of the ASC 340-10-S99-1 and
Stock Compensation Expense
The Company accounts for stock-based compensation expense in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using a market approach. Forfeitures are recognized as incurred.
The Class B common stock and the Class B units of Opco were granted subject to a
performance condition, namely the occurrence of a Business Combination. This
market condition is considered in determining the grant date fair value of these
instruments using a closed form barrier option model. Compensation expense
related to the Class B common stock and Class B units of Opco is recognized only
when the performance condition is probable of occurrence, or more specifically
when a Business Combination is consummated. Therefore, no stock-based
compensation expense has been recognized during the year ended
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
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