References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to Ventoux CCM Acquisition Corp. References to our "management"
or our "management team" refer to our officers and directors, and references to
the "co-sponsors" refer to Ventoux Acquisition Holdings LLC ("Ventoux
Acquisition") and Chardan International Investments, LLC ("Chardan
Investments"). 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 and Section 21E of 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 completion of the Proposed Business Combination (as defined
below), 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, including that the
conditions of the Proposed Business Combination are not satisfied. 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 final prospectus for
its Initial Public Offering 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
July 10, 2019 for the purpose of entering into a merger, share exchange, asset
acquisition, stock purchase, recapitalization, reorganization or other similar
business transaction with one or more businesses or entities (a "Business
Combination". We intend to effectuate our Business Combination using cash from
the proceeds of the Initial Public Offering and the private placements of the
private warrants, our shares, rights, new debt, or a combination of these. 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.
Recent Developments
Proposed Business Combination
On November 10, 2021, the Company entered into the Merger Agreement. Pursuant to
the Merger Agreement, the Company will acquire all of the outstanding equity
interests of Presto, and stockholders of Presto will receive $800,000,000 in
aggregate consideration (the "Aggregate Base Consideration") in the form of
newly issued common stock in New Presto, calculated based on a price of $10.00
per share.
In addition to the Aggregate Base Consideration, Presto stockholders may be
entitled to receive 15,000,000 additional shares of common stock of New Presto
(the "Presto Earnout Shares"), to be issued as follows: (A) 7,500,000 Presto
Earnout Shares, if, during the period from and after the Closing until the third
anniversary of the Closing, the Volume Weighted Average Price ("VWAP" as defined
in the Merger Agreement) of New Presto common stock is greater than or equal to
$12.50 for any 20 trading days within a period of 30 consecutive trading days,
and (B) an additional 7,500,000 Presto Earnout Shares, if, during the period
from and after the Closing until the fifth anniversary of the Closing, the VWAP
of New Presto common stock is greater than or equal to $15.00 for any 20 trading
days within a period of 30 consecutive trading days.
The Company entered into Equity Subscription Agreements with certain accredited
investors, pursuant to which, among other things, the Company agreed to issue
and sell, in private placements to close immediately prior to or substantially
concurrently with the Closing, an aggregate of 1,500,000 shares of common stock
for $10.00 per share.
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The Company also entered into the Convertible Note Subscription Agreement with
an institutional accredited investor, pursuant to which, among other things, the
Company agreed to issue and sell, in a private placement to close immediately
prior to the Closing, an aggregate of $55,000,000 in aggregate principal amount
of convertible notes and an aggregate of 1,000,000 warrants.
For a detailed description of the proposed business combination, please see the
section of this Annual Report titled "Business-Proposed Business Combination."
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities through March 31, 2022 were organizational activities, those
necessary to prepare for the Initial Public Offering, identifying a target
company for a Business Combination and activities in connection with the
proposed acquisition of Presto. We do not expect to generate any operating
revenues until after the completion of our Business Combination. We generate
non-operating income in the form of interest income on marketable securities
held in the Trust Account. 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.
For the three months ended March 31, 2022, we had a net income of $955,240,
which consists of change in fair value of warrant liabilities of $1,668,750 and
interest earned on marketable securities held in our Trust Account of $18,319,
offset by general and administrative expenses of $731,829.
For the three months ended March 31, 2021, we had a net income of $3,461,107,
which consists of change in fair value of warrant liabilities of $3,818,250 and
interest earned on marketable securities held in our Trust Account of $26,175,
offset by general and administrative expenses of $216,976, loss on initial
issuance of private warrants of $162,000 and a provision for income taxes of
$4,342.
Liquidity and Capital Resources
On December 30, 2020, we completed the Initial Public Offering of 15,000,000
Units at $10.00 per Unit, generating gross proceeds of $150,000,000.
Simultaneously with the closing of the Initial Public Offering, we completed the
sale of 6,000,000 Private Warrants at a price of $1.00 per Private Warrant in a
private placement to the co-sponsors, generating gross proceeds of $6,000,000.
On January 5, 2021, in connection with the underwriters' exercise of their
over-allotment option in full, we completed the sale of an additional 2,250,000
Units, at $10.00 per Unit, generating gross proceeds of $22,500,000.
Simultaneously with the closing of the over-allotment option, we completed a
sale of an additional 675,000 Private Warrants, at $1.00 per Private Warrant,
generating total proceeds of $675,000.
Following the Initial Public Offering, the full exercise of the over-allotment
option, and the sale of the Private Units, a total of $174,225,000 was placed in
the Trust Account. We incurred $3,993,017 in Initial Public Offering related
costs, including $3,450,000 of underwriting fees and $543,017 of other costs.
The Company will have until June 30, 2022 to consummate a Business Combination
(the "Combination Period"). On March 29, 2022, the Company issued unsecured
promissory notes in the amount of $1,150,000 and $575,000, to Ventoux
Acquisition Holdings LLC and Chardan International Investments, LLC,
respectively. The proceeds of $1,725,000 ($0.10 per Public Share) from the
promissory notes were deposited into the Trust Account in order to extend the
period of time the Company has to complete its Business Combination from
March 30, 2022 to June 30, 2022.
For the three months ended March 31, 2022, cash used in operating activities was
$253,301. Net income of $955,240 was affected by interest earned on marketable
securities held in the Trust Account of $18,319 and change in fair value of
warrant liabilities of $1,668,750. Changes in operating assets and liabilities
used $478,528 of cash for operating activities.
For the three months ended March 31, 2021, cash used in operating activities was
$344,507. Net income of $3,461,107 was affected by the change in fair value of
warrants of $3,818,250, loss on initial issuance of private warrants of $162,000
and interest earned on marketable securities held in Trust Account of $26,175.
Changes in operating assets and liabilities used $24,638 of cash for operating
activities.
As of March 31, 2022, we had cash and marketable securities held in the Trust
Account of $176,009,525 (including approximately $60,000 of interest income)
invested in a money market account that invests in US Treasury Bills. Interest
income on the balance in the Trust Account may be used by us to pay taxes.
Through March 31, 2022, we have not withdrawn any interest earned from the Trust
Account.
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 Business Combination. To the extent that
our capital stock or debt is used, in whole or in part, as consideration to
complete our 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 March 31, 2022, we had cash of $259,857. 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 a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, our initial stockholders, officers and
directors or their affiliates may, but are not obligated to, loan us funds as
may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination is not consummated, 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 $500,000 of such loans may be convertible into warrants at
a price of $1.00 per unit, at the option of the lender. The units would be
identical to the private warrants. Loans made by Chardan Capital Markets, LLC or
any of its related persons will not be convertible into private warrants, and
Chardan Capital Markets, LLC and its related persons will have no recourse with
respect to their ability to convert their loans into Private Warrants.
On March 29, 2022, the Company issued unsecured promissory notes of up to
$375,000 with $250,000 to Ventoux Acquisition Holdings LLC and $125,000 to
Chardan International Investments, LLC, respectively, in connection with
providing the Company with additional working capital. The promissory notes are
not convertible and bear no interest and are due and payable upon the date on
which the Company consummates its initial Business Combination. As of March 31,
2022, the Company had borrowed a total of $133,333 and $66,667 from Ventoux
Acquisition Holdings LLC and Chardan International Investments, LLC,
respectively.
On March 29, 2022, the Company issued unsecured promissory notes in the amount
of $1,150,000 and $575,000 to Ventoux Acquisition Holdings LLC and Chardan
International Investments, LLC, respectively. The proceeds from the promissory
notes were deposited into the Trust Account in order to extend the period of
time the Company has to complete its Business Combination from March 30, 2022 to
June 30, 2022. The promissory note bears no interest and is due and payable upon
the date on which the Company consummates its initial Business Combination.
If we are unable to raise additional capital, we may be required to take
additional measures to conserve liquidity, which could include, but not
necessarily be limited to, suspending the pursuit of a Business Combination. We
cannot provide any assurance that new financing will be available to it on
commercially acceptable terms, if at all.
As a result of the above, in connection with our assessment of going concern
considerations in accordance with Financial Accounting Standard Board's
Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about
an Entity's Ability to Continue as a Going Concern," we have determined that the
liquidity condition and date for mandatory liquidation and dissolution raise
substantial doubt about our ability to continue as a going concern through
June 30, 2022, the scheduled liquidation date of the Company if it does not
complete a Business Combination prior to such date. These 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.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of March 31, 2022 and December 31, 2021. 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 an agreement to pay Chardan
Capital Markets, LLC a total of $10,000 per month for office space, utilities
and secretarial support. We began incurring these fees on December 23, 2020 and
will continue to incur these fees monthly until the earlier of the completion of
the Business Combination and our liquidation.
We have engaged Chardan Capital Markets, LLC as an advisor in connection with a
Business Combination to assist us in holding meetings with stockholders to
discuss the potential Business Combination and the target business's attributes,
introduce us to potential investors that are interested in purchasing our
securities in connection with the potential Business Combination, assist us in
obtaining stockholder approval for the Business Combination and assist us with
press releases and public filings in connection with the Business Combination.
We will pay Chardan Capital Markets, LLC a marketing fee for such services upon
the completion of a Business Combination in an amount equal to, in the
aggregate, 3.5% of the gross proceeds of the Initial Public Offering, including
proceeds from the exercise of the underwriters' over-allotment option. As a
result, Chardan Capital Markets, LLC will not be entitled to such fee unless the
Business Combination is consummated.
In addition to Chardan Capital Markets, LLC, we have engaged certain advisors to
assist in capital raising efforts in connection with the proposed Business
Combination. The fee arrangement with the advisors, including William Blair &
Company LLC, Truist Securities Inc. and others are only payable upon the
consummation of the Business Combination.
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Critical Accounting Policies
The preparation of unaudited condensed consolidated financial statements and
related disclosures in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and income and expenses during the periods reported. Actual results
could materially differ from those estimates. We have identified the following
critical accounting policies:
Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of our financial instruments, including
issued warrants to purchase shares of common stock, to determine if such
instruments are derivatives or contain features that qualify as embedded
derivatives, pursuant to ASC 480 and ASC 815. We account for the Private
Warrants in accordance with the guidance contained in ASC 815-40 under which the
Private Warrants do not meet the criteria for equity treatment and must be
recorded as liabilities. Accordingly, we classify the Private Warrants as
liabilities at their fair value and adjust the Private Warrants to fair value at
each reporting period. This liability is subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized
in our statements of operations. The Private Warrants are valued using a
Modified Black Scholes model.
Common Stock Subject to Possible Redemption
The Company accounts for its common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Shares of common stock subject to
mandatory redemption are classified as a liability instrument and are measured
at fair value. 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 is classified as stockholders' equity. Certain of the
Company's common stock features certain redemption rights that are considered to
be outside of the Company's control and subject to occurrence of uncertain
future events. Accordingly, at March 31, 2022 and December 31, 2021, common
stock subject to possible redemption is presented as temporary equity, outside
of the stockholders' deficit section of the Company's condensed consolidated
balance sheets.
Net Income Per Share of Common Stock
Net income per common stock is computed by dividing net income by the weighted
average number of shares of common stock outstanding for the period. Accretion
associated with the redeemable shares of common stock is excluded from earnings
per share as the redemption value approximates fair value.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU
2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and
Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)
("ASU 2020-06") to simplify accounting for certain financial instruments. ASU
2020-06 eliminates the current models that require separation of beneficial
conversion and cash conversion features from convertible instruments and
simplifies the derivative scope exception guidance pertaining to equity
classification of contracts in an entity's own equity. The new standard also
introduces additional disclosures for convertible debt and freestanding
instruments that are indexed to and settled in an entity's own equity. ASU
2020-06 amends the diluted earnings per share guidance, including the
requirement to use the if-converted method for all convertible instruments. ASU
2020-06 is effective January 1, 2022 and should be applied on a full or modified
retrospective basis, with early adoption permitted beginning on January 1, 2021.
We are currently assessing the impact, if any, that ASU 2020-06 would have on
its financial position, results of operations or cash flows.
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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