Written by wordpress627 on July 24, 2018

Either – we excel working with both.

Last week, we were pleased to offer our congratulations to yet another one of our SPAC client’s success – as they filed and set their terms for $150M on the NYSE. They began their journey as a confidential filer.

Working with Special Purpose Acquisition Companies has become a specialty of Edgar Agents. Certainly, 2017 and 2018 (so far!) have been strong for SPACs and straight-forward Rule 419 Blank Check Companies.

Guiding — and executing their registrations — for SPAC or a Blank Check Company is all about understanding the nuances.

SPAC Blank Check Company
Escrow of offering proceeds Nasdaq rules dictate at least 90% of proceeds from the offering and private placement are deposited in a trust account. The gross proceeds less allowable underwriting commissions, expenses and company deductions under Rule 419, are deposited into an escrow account.
Investment of net proceeds Net offering proceeds are invested only in securities that are direct obligations of or obligations guaranteed by the United States, with a maturity of 180 days or less or in money market funds meeting conditions under Rule 2a-7 of the Investment Company Act. Proceeds can only be invested in specified securities, such as a money market fund or in securities that are direct obligations of or obligations guaranteed by the United States.
Receipt of interest on escrowed funds Interest on proceeds from the trust account is paid to investors. Interest on funds in escrow is held for the sole benefit of investors.
Limitation on fair value or net assets of business Nasdaq rules dictate the initial business combination must be with one or more target business that together have a fair market value equal to 80% of the balance in the trust account. The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
Trading of securities issued The units may trade before the initial business combination so long as the SPAC files a Form8-K including updated financial information. No trading of the units or the underlying ordinary shares and warrants is permitted until the completion of a business combination.
Exercise of the warrants Warrants cannot be exercised until the later of 30 days after the completion of the initial business combination or 12 months from the closing of this offering. Warrants could be exercised prior to the completion of a business combination but securities received and cash paid would be deposited into the escrow account.
Election to remain an investor A shareholder vote may not be required. If there is a shareholder vote, a SPAC may offer to redeem shares. A prospectus regarding the business combination would go to each investor, who would have the opportunity to decide if he or she elects to remain a shareholder or require the return of his or her investment.
Business combination deadline An acquisition must be completed within 24 months. An acquisition must be completed within 18 months.
Release of funds The proceeds will not be released until the earliest of the completion of the initial business combination, the redemption of any shares in connection with a shareholder vote, the redemption of shares if unable to complete a business combination within 24 months. The proceeds held in escrow are not released until the earlier of the completion of a business combination or the failure to affect a business combination within the allotted time.

Additionally, SPACs and Blank Check Companies are eligible for our Success Locked-Fee and Abort & Delay Deferment program. Reduced risk from marketing timing or other possible registration interruptions. CLICK HERE

Call us to discuss how we will help you.