On April 7, 2019, we entered into a Business Combination Agreement (the
Transaction Agreement), by and among Queso Holdings Inc., a Delaware corporation (Queso), AP VIII CEC Holdings, L.P., a Delaware limited partnership (the Seller), pursuant to which we will acquire Queso. On
July 29, 2019, the parties jointly determined to terminate the Transaction Agreement.
Results of Operations
All activity from inception through September 30, 2019 was in preparation for our Initial Public Offering, and since the closing of the
offering, our activity has been limited to the search for a prospective initial business combination, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We have incurred
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.
For the three months ended September 30, 2019, we had net income of approximately $545,000 which consisted of approximately
$1.0 million in interest income, offset by approximately $469,000 in general and administrative costs (of which approximately $50,000 was for merger expenses),
For the three months ended September 30, 2018, we had net income of approximately $810,000, which consisted of approximately $913,000 in
interest income, offset by approximately $103,000 in general and administrative costs.
For the nine months ended September 30, 2019,
we had net loss of approximately $1.3 million, which consisted of approximately $3.3 million in interest income, offset by approximately $4.5 million in general and administrative costs (of which approximately $755,000 was for merger
expenses),
For the nine months ended September 30, 2018, we had net income of approximately $1.7 million, which consisted of
approximately $2.0 million in interest income, offset by approximately $370,000 in general and administrative costs.
Going Concern Consideration
The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which
contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2019, we had approximately $338 in our operating bank account, approximately
$6.4 million of interest income available in the Trust Account to pay for taxes, and a working capital deficit of approximately $4.0 million. Further, we have incurred and expect to continue to incur significant costs in pursuit of our
acquisition plans.
Through September 30, 2019, our liquidity needs have been satisfied through receipt of a $25,000 capital
contribution from the sponsor in exchange for the issuance of the founder shares to the sponsor, $325,000 in loans from the sponsor, and the net proceeds from the consummation of the private placement not held in the Trust Account.
In order to finance transaction costs in connection with a Business Combination, the sponsor or an affiliate of the sponsor, or certain of the
companys officers and directors may, but are not obligated to, loan the company funds as may be required (the Working Capital Loans).
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. We may withdraw interest income (if any) to pay our income taxes, if any. 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 interest income earned on the amount in the Trust Account (if any) will be sufficient to pay our income taxes. To the extent that our equity 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.
Based on the foregoing, we will have insufficient funds available to operate its business
through the earlier of consummation of a Business Combination or February 15, 2020. Following the initial Business Combination, if cash on hand is insufficient, we will need to obtain additional financing in order to meet its obligations. We
cannot be certain that additional funding will be available on acceptable terms, or at all. Our plans to raise capital or to consummate the initial Business Combination may not be successful. These matters, among others, raise substantial doubt
about our ability to continue as a going concern.
Critical Accounting Policies and Estimates
This managements discussion and analysis of our financial condition and results of operations is based on our financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of
contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instrument and accrued expenses. We base our estimates on historical
experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no significant changes in our critical accounting policies as discussed in our 2018 Form 10-K filed with the SEC on March 29, 2019.
15