References to the "Company," "us," "our" or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report
including, without limitation, statements under 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. When used in
this Report, 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
We are a blank check company incorporated as a
Proposed Business Combination
On
The Merger and Share Acquisition Agreement provides that, among other things and upon the terms and subject to the conditions thereof, the following transactions will occur (together with the other agreements and transactions contemplated by the Merger and Share Acquisition Agreement, the "Transactions"), following the Reorganization and the Subscription (each as defined below):
(a) at the closing of the transactions contemplated by the Merger and Share Acquisition Agreement (the "Closing"), Merger Sub will merge with and into the Company, the separate corporate existence of Merger Sub will cease and the Company will be the surviving corporation and a wholly-owned subsidiary of OMI (the "Merger"); and
(b) as a result of the Merger, among other things, all outstanding shares of common stock of the Company immediately prior to Closing (except with respect to certain specified shares) will be converted into and shall for all purposes represent only the right to subscribe for and purchase, pursuant to the Subscription Agreement (as defined herein) and a letter of transmittal and subscription confirmation, one validly issued, fully paid and non-assessable common share of OMI upon the exercise of such subscription right.
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Prior to the Closing, TRA will effect a reorganization of parts of its business (the "Reorganization") in accordance with the Merger and Share Acquisition Agreement. Pursuant to the Reorganization, among other matters, OMI will become a direct subsidiary of TRA, TRLEI will become a wholly-owned direct subsidiary of OMI, and intercompany receivables (other than ordinary course trade receivables) due from TRLEI to TRA and certain of its affiliates will be contributed to OMI.
Prior to Closing, but after the redemption of certain shares of the Company, the
Company will, as agent acting on behalf of its stockholders, subscribe for
common shares of OMI, at a price equal to their par value of
The Transactions are subject to the satisfaction or waiver of certain customary
closing conditions, including, among others, (a) the absence of any order by a
governmental authority of competent jurisdiction preventing the consummation of
the Transactions, (b) the approval of the Merger, the Subscription and related
matters by the stockholders of the Company, (c) the effectiveness of the
registration statement filed by OMI with the
The Merger and Share Acquisition Agreement may be terminated at any time prior
to the Closing (a) by mutual written consent of the parties, (b) by either the
Company or the UEC Parties in certain other circumstances set forth in the
Merger and Share Acquisition Agreement, including, a breach by the other party
or parties of their representations and warranties or covenants that would
prevent the satisfaction of certain closing conditions, and (c) by either the
Company or the UEC Parties (i) if any governmental authority shall have issued
an order preventing consummation of the Transactions, (ii) in the event the
Closing does not occur by
The Merger and Share Acquisition Agreement and other support agreements have
been filed as exhibits to and described in the Company's Current Report on Form
8-K filed with the
The issuance of additional shares in connection with the Merger by OMI to TRLEI or other investors:
? may significantly dilute the equity interest of existing investors, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock; ? may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock; ? could cause a change in control if a substantial number of shares of our common stock is 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 stock ownership or voting rights of a person seeking to obtain control of us; and ? may adversely affect prevailing market prices for our Class A common stock and/or warrants. 26
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders, it could result in:
? default and foreclosure on our assets if our operating revenues after an 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 security is payable on demand; ? our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; ? our inability to pay dividends on our 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, our ability to pay expenses, make capital expenditures and acquisitions, and fund 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; ? limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and ? other purposes and other disadvantages compared to our competitors who have less debt.
We expect to continue to incur significant costs in the pursuit of the Merger. We cannot assure you that our plans to raise capital or to complete the Merger will be successful.
Results of Operations
Our entire activity since inception up to
For the year ended
For the period from
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Liquidity and Going Concern Consideration
As of
Prior to the completion of the IPO, our liquidity needs had been satisfied
through a payment from the Sponsor of
In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor or an affiliate of the Sponsor or certain of our
officers and directors may, but are not obligated to, provide us Working Capital
Loans. On
We have until
Critical Accounting Policies and Estimates
The preparation of the financial statements in conformity with
Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
We have identified the following as our critical accounting policies:
Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible redemption
in accordance with the guidance in ASC Topic 480-10-S99 "Classification and
Measurement of Redeemable Securities." 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 are classified as
stockholders' equity. The Company's Class A common stock features certain
redemption rights that is considered to be outside of the Company's control and
subject to occurrence of uncertain future events. Accordingly, at
Under ASC 480-10-S99, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A common stock resulted in charges against additional paid-in capital and accumulated deficit.
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Net Income Per Share of Common Stock
The Company has two classes of stock, which are referred to as Class A common
stock and Class B common stock. Earnings and losses are shared pro rata between
the two classes of stock. The 21,250,000 potential common stock for outstanding
warrants to purchase the Company's stock were excluded from diluted earnings per
share for the year ended
Off-Balance Sheet Arrangements
As of
JOBS Act
On
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company", we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an "emerging growth company," whichever is earlier.
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