The statements in the discussion and analysis regarding industry outlook, our
expectations regarding the performance of our business and the forward-looking
statements are subject to numerous risks and uncertainties, including, but not
limited to, the risks and uncertainties described in "Risk Factors" and
"Cautionary Note Regarding Forward-Looking Statements." Our actual results may
differ materially from those contained in or implied by any forward-looking
statements. You should read the following discussion together with the sections
entitled "Risk Factors"," "Business" and the audited consolidated financial
statements, including the related notes, appearing elsewhere in this Form 10-
Overview
We are a blank check company incorporated on
The issuance of additional shares of our stock in a business combination:
may significantly dilute the equity interest of investors in our securities,
· 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 common stock if preferred stock is
issued with rights senior to those afforded our common stock;
could cause a change of 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;
· may adversely affect prevailing market prices for our units, Class A common
stock and/or warrants; and
· may not result in adjustment to the exercise price of our warrants.
54 Table of Contents
· Similarly, if we issue debt securities or otherwise incur significant
indebtedness, 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 is payable on demand;
our inability to obtain necessary additional financing if the debt contains
· covenants restricting our ability to obtain such financing while the debt 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, expenses, capital expenditures, acquisitions and 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; and
limitations on our ability to borrow additional amounts for expenses, capital
· expenditures, acquisitions, debt service requirements, execution of our
strategy and other purposes and other disadvantages compared to our competitors
who have less debt.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date.
Our only activities since inception have been organizational activities and
those necessary to prepare for the IPO. Following the IPO, we do not expect to
generate any operating revenues until after completion of our initial business
combination. We will generate non-operating income in the form of interest
income on cash and cash equivalents in the form of specified
For the period from
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of our initial
public offering through receipt of a
We intend to use substantially all of the funds held in our Trust Account,
including any amounts representing interest earned on the Trust Account (which
interest shall be net of taxes payable) to complete our initial business
combination. We may withdraw interest to pay our taxes.
55 Table of Contents
estimated total gross proceeds after the completion of the IPO, our annual
franchise tax obligation is expected to be capped at the maximum amount of
annual franchise taxes payable by us as a
As of
In order to fund working capital deficiencies or finance transaction costs in
connection with an intended initial business combination, our sponsors, an
affiliate of our sponsors or our officers and directors may, but are not
obligated to, loan us funds as may be required. If we complete our initial
business combination, we may repay such loaned amounts out of the proceeds of
the Trust Account released to us. In the event that our 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 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.
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: (1) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) 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; (3) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (4) 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 the IPO or until we are no longer an "emerging growth company," whichever is earlier.
56
Table of Contents
© Edgar Online, source