We are a newly incorporated blank check company incorporated as a Delaware
corporation and formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses. We have not identified any business
combination target and we have not, nor has anyone on our behalf, initiated any
substantive discussions, directly or indirectly, with any business combination
target. We intend to effectuate our initial business combination using cash from
the proceeds of the IPO and the Private Placements, our capital stock, debt or a
combination of cash, stock and debt.
On January 22, 2021, we completed our IPO of 20,000,000 Units and the Private
Placement of an aggregate of 5,950,000 private placement warrants. On January
25, 2021, the Underwriters exercised in full the option granted to them by the
Company to purchase up to 3,000,000 additional Units to cover over-allotments,
and we issued an additional 600,000 private placement warrants in the Additional
Private Placement. An aggregate of $230,000,000 in proceeds from the IPO and the
Private Placements has been placed in the Trust Account.
As of March 26, we had cash of approximately $695,201 and working capital of
approximately $628,416. We expect to continue to incur significant costs in the
pursuit of our acquisition plans. We cannot assure you that our plans to raise
capital or to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We did not commence operations until after the closing of our IPO in January
2021, and we have not engaged in any significant operations nor generated any
operating revenues to date. We will not 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. There has been no significant change in our financial or trading
position and no material adverse change has occurred since the date of our
audited financial statements. We have incurred and expect to continue to incur
increased expenses as a result of being a public company (for legal, financial
reporting, accounting and auditing compliance), as well as for due diligence
expenses.
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Liquidity and Capital Resources
The funds in the Trust Account have been or will be invested only in U.S.
government treasury bills with a maturity of 185 days or less or in money market
funds that meet certain conditions under Rule 2a-7 under the Investment Company
Act and that invest only in direct U.S. government obligations. We intend to use
substantially all of the funds held in the Trust Account, including any amounts
representing interest earned on the Trust Account (less taxes payable and
deferred underwriting commissions) to complete our initial business combination.
Delaware franchise tax is based on our authorized shares or on our assumed par
and non-par capital, whichever yields a lower result. Under the authorized
shares method, each share is taxed at a graduated rate based on the number of
authorized shares with a maximum aggregate tax of $200,000 per year. Under the
assumed par value capital method, Delaware taxes each $1,000,000 of assumed par
value capital at the rate of $400; where assumed par value would be (1) our
total gross assets, divided by (2) our total issued shares of common stock,
multiplied by (3) the number of our authorized shares. Our annual franchise tax
obligation is expected to be capped at the maximum amount of annual franchise
taxes payable by us as a Delaware corporation of $200,000. 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 only taxes payable by us out of
the funds in the Trust Account will be income and franchise taxes. We expect the
interest earned on the amount in the Trust Account will be sufficient to pay our
taxes. To the extent that our capital 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.
As of March 26, 2021, we held $695,201 outside the Trust Account. We expect to
use these funds primarily to identify and evaluate target businesses, perform
business due diligence on prospective target businesses, travel to and from the
offices 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 a business
combination, and to pay taxes to the extent the interest earned on the Trust
Account is not sufficient to pay our taxes.
As of March 26, 2021, we had working capital of approximately $628,416. In order
to fund working capital deficiencies or finance transaction costs in connection
with an intended initial business combination, our sponsor, Alden Global, any
other affiliate of our sponsor, or our officers or directors may, but none of
them is obligated to, loan us funds as may be required. If we complete our
initial business combination, we would 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 $1,500,000 of such
loans may be convertible into warrants at a price of $1.00 per warrant at the
option of the lender. These warrants would be identical to the private placement
warrants. The terms of such loans, if any, have not been determined and no
written agreements exist with respect to such loans. We do not expect to seek
loans from parties other than our sponsor, Alden Global or another affiliate of
our sponsor, or our officers and directors, if any, as we do not believe third
parties will be willing to loan such funds and provide a waiver against any and
all rights to seek access to funds in our Trust Account.
We expect our primary liquidity requirements will include approximately $350,000
for legal, accounting, due diligence, travel and other expenses in connection
with any business combinations; $150,000 for legal and accounting fees related
to regulatory reporting requirements; $75,000 for Nasdaq continued listing fees;
and approximately $175,000 for working capital to cover miscellaneous expenses
(including franchise taxes net of anticipated interest income).
These amounts are estimates and may differ materially from our actual expenses.
In addition, we could use a portion of the funds held outside the Trust Account
to pay commitment fees for financing, fees to consultants to assist us with our
search for a target business or as a down payment or to fund a "no-shop"
provision (a provision designed to keep target businesses from "shopping" around
for transactions with other companies or investors on terms more favorable to
such target businesses) with respect to a particular proposed business
combination, although we do not have any current intention to do so. If we
entered into an agreement where we paid for the right to receive exclusivity
from a target business, the amount that would be used as a down payment or to
fund a "no-shop" provision would be determined based on the terms of the
specific business combination and the amount of our available funds at the time.
Our forfeiture of such funds (whether as a result of our breach or otherwise)
could result in our not having sufficient funds to continue searching for, or
conducting due diligence with respect to, prospective target businesses.
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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 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. In addition, we may target businesses with enterprise values that
are greater than we could acquire with the net proceeds of our IPO and the
Private Placements, and, as a result, if the cash portion of the purchase price
exceeds the amount available from the Trust Account, net of amounts needed to
satisfy redemptions by public stockholders, we may be required to seek
additional financing to complete such proposed initial business combination. We
may also obtain financing prior to the closing of our initial business
combination to fund our working capital needs and transaction costs in
connection with our search for and completion of our initial business
combination. There is no limitation on our ability to raise funds through the
issuance of equity or equity-linked securities or through loans, advances or
other indebtedness in connection with our initial business combination,
including pursuant to forward purchase agreements or backstop arrangements we
may enter into. Subject to compliance with applicable securities laws, we would
only complete such financing simultaneously with the completion of our business
combination. If we are unable to complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to
cease operations and liquidate the Trust Account. In addition, following our
initial business combination, if cash on hand is insufficient, we may need to
obtain additional financing in order to meet our obligations.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations
As of March 23, 2021, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments
or contractual obligations.
Critical Accounting Policies and Estimates
Please refer to the information in Note 2 - Summary of Significant Accounting
Policies of our financial statements for a description of our critical
accounting policies and estimates.
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