References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to Roth CH Acquisition V Co. References to our "management" or
our "management team" refer to our officers and directors. The following
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Quarterly Report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are not historical facts and involve risks and
uncertainties that could cause actual results to differ materially from those
expected and projected. All statements, other than statements of historical fact
included in this Quarterly Report including, without limitation, statements in
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the search for an initial business combination, the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission (the "SEC"). The Company's securities filings
can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except
as expressly required by applicable securities law, the Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
Overview
We are a blank check company formed under the laws of the State of Delaware on
November 5, 2020, for the purpose of effecting a merger, share exchange, asset
acquisition, stock purchase, recapitalization, reorganization or other similar
business combination with one or more businesses or entities. We intend to
effectuate our initial business combination using cash from the proceeds of the
Initial Public Offering (as defined below) and the sale of the Private Units (as
defined below), our capital stock, debt or a combination of cash, stock and
debt.
The issuance of additional shares of our stock in an initial business
combination:
? may significantly reduce the equity interest of our stockholders;
? may subordinate the rights of holders of common stock if we issue preferred
shares with rights senior to those afforded to our shares of common stock;
will likely cause a change in control if a substantial number of our shares of
? common stock are issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and most likely will also
result in the resignation or removal of our present officers and directors; and
? may adversely affect prevailing market prices for our securities.
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 a
business combination are insufficient to pay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we have made
all principal and interest payments when due if the debt security contains
? covenants that required the maintenance of certain financial ratios or reserves
and we breach any such covenant 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; and
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our inability to obtain additional financing, if necessary, if the debt
? security contains covenants restricting our ability to obtain additional
financing while such security is outstanding.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete an initial
business combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities through September 30, 2022 were organizational activities,
those necessary to prepare for the Initial Public Offering, and, subsequent to
the Initial Public Offering, identifying a target company for an initial
business combination. We do not expect to generate any operating revenues until
after the completion of our initial business combination, at the earliest. We
generate non-operating income in the form of interest income on marketable
securities held in the Trust Account (as defined below). We incur expenses as a
result of being a public company (for legal, financial reporting, accounting and
auditing compliance), as well as for due diligence expenses in connection with
searching for, and completing, an initial business combination.
For the three months ended September 30, 2022, we had a net income of $304,331,
which consisted of interest earned on marketable securities held in Trust
Account of $526,853, offset by of operating costs of $122,934 and provision for
income taxes of $99,588.
For the nine months ended September 30, 2022, we had a net income of $163,259,
which consisted of interest earned on marketable securities held in Trust
Account of $697,289, offset by of operating costs of $416,559 and provision for
income taxes of $117,471.
For the three and nine months ended September 30, 2021, we had a net loss of
$105 and $195, respectively, which consisted of operating costs.
Liquidity and Capital Resources
On December 3, 2021, we consummated our initial public offering (the "Initial
Public Offering") of 11,500,000 units (the "Units" and, with respect to the
shares of common stock included in the Units sold, the "Public Shares"), which
included the full exercise by the underwriters of their over-allotment option in
the amount of 1,500,000 Units, at a price of $10.00 per Unit, generating gross
proceeds of $115,000,000. Simultaneously with the closing of the Initial Public
Offering, we consummated the sale of 461,500 units (the "Private Units"), at a
price of $10.00 per Private Unit, in a private placement to certain of the
holders of ours shares prior to the Initial Public Offering (the "Initial
Stockholders"), generating gross proceeds of $4,615,000.
Following the Initial Public Offering, including the full exercise of the
over-allotment option by the underwriters, and the sale of the Private Units, a
total of $116,725,000 was placed in a trust account located in the United States
(the "Trust Account"). We incurred $1,625,220 in transaction costs, consisting
of $1,150,000 of underwriting fees and $475,220 of other offering costs.
For the nine months ended September 30, 2022, cash used in operating activities
was $214,324. Net income of $163,259 was affected by interest earned on
marketable securities held in the Trust Account of $697,289 and changes in
operating assets and liabilities, which provided $319,706.
For the nine months ended September 30, 2021, cash used in operating activities
was $648. Net loss of $195 was affected by changes in operating assets and
liabilities, which used $453.
As of September 30, 2022, we had cash and marketable securities held in the
Trust Account of $117,422,289. 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 income taxes payable), to complete our initial business
combination. We may withdraw interest to pay taxes. During the period ended
September 30, 2022, we did not withdraw any interest income from the Trust
Account. 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.
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As of September 30, 2022, we had $684,571 of cash held outside of the Trust
Account. 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, and structure, negotiate and complete an initial business
combination.
In order to finance transaction costs in connection with an initial business
combination, the Initial Stockholders, or certain of our officers and directors
or their affiliates may, but are not obligated to, loan us funds as may be
required ("Working Capital Loans"). If we complete an initial business
combination, we would repay the Working Capital Loans out of the proceeds of the
Trust Account released to us. Otherwise, the Working Capital Loans would be
repaid only out of funds held outside the Trust Account. In the event that an
initial business combination does not close, we may use a portion of proceeds
held outside the Trust Account to repay the Working Capital Loans, but no
proceeds held in the Trust Account would be used to repay the Working Capital
Loans. Except for the foregoing, the terms of such Working Capital Loans, if
any, have not been determined and no written agreements exist with respect to
such loans. The Working Capital Loans would be repaid upon consummation of an
initial business combination, without interest. As of September 30, 2022, there
are no Working Capital Loans outstanding.
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.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of September 30, 2022. We do not participate
in transactions that create relationships with unconsolidated entities or
financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet
arrangements. We have not entered into any off-balance sheet financing
arrangements, established any special purpose entities, guaranteed any debt or
commitments of other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than as described below.
Pursuant to a business combination marketing agreement entered into on November
30, 2021, we have engaged Roth Capital Partners, LLC ("Roth") and Craig-Hallum
Capital Group LLC ("Craig-Hallum"), the underwriters in the Initial Public
Offering, as advisors in connection with our initial business combination to
assist in the transaction structuring and negotiation of a definitive purchase
agreement with respect to the initial business combination, hold meetings with
the stockholders to discuss the initial business combination and the target's
attributes, introduce us to potential investors to purchase our securities in
connection with the initial business combination, and assist with financial
analysis, presentations, press releases and filings related to the initial
business combination. We will pay Roth and Craig-Hallum a fee for such services
upon the consummation of an initial business combination in an amount equal to,
in the aggregate, 4.5% of the gross proceeds of the Initial Public Offering (or
$5,175,000 in the aggregate). As a result, Roth and Craig-Hallum will not be
entitled to such fee unless we consummate an initial business combination.
Critical Accounting Policies
There have been no material changes in the critical accounting estimates
disclosed under Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations - Critical Accounting Estimates
contained in the Annual Report on Form 10-K for the year ended December 31,
2021.
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