Written by edgaragentsdb on July 24, 2018
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
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