NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
NOTE
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
ChaSerg
Technology Acquisition Corp. (the “Company”) was incorporated in Delaware on May 21, 2018. The Company was formed
for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”).
Although
the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company
intends to focus its search on companies in the technology industry. The Company is an early stage and emerging growth company
and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As
of September 30, 2018, the Company had not commenced any operations. All activity for the period from May 21, 2018 (inception)
through September 30, 2018 relates to the Company’s formation and its Initial Public Offering, which is described below.
The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.
The Company will generate non-operating income in the form of interest income from the proceeds derived from the initial public
offering (“Initial Public Offering”).
The
registration statement for the Company’s Initial Public Offering was declared effective on October 4, 2018. On October 10,
2018, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the Class
A common stock included in the Units offered, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of
$200,000,000, which is described in Note 3.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 600,000 units (the “Placement Units”)
at a price of $10.00 per Placement Unit in a private placement to ChaSerg Technology Sponsor LLC, a Delaware limited liability
company (the “Sponsor”) and Cantor Fitzgerald & Co. (“Cantor”), generating gross proceeds of $6,000,000,
which is described in Note 4.
Following
the closing of the Initial Public Offering on October 10, 2018, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds
of the sale of the Units in the Initial Public Offering and the sale of the Placement Units was placed in a trust account (“Trust
Account”) which was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended
investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of
the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and
(ii) the distribution of the Trust Account, as described below. At October 10, 2018, the proceeds of the Initial Public Offering
were held in cash and subsequently invested in U.S. Treasury securities, as specified above.
On
October 25, 2018, in connection with the underwriters’ election to partially exercise their over-allotment option, the Company
sold an additional 2,000,000 Units at $10.00 per Unit and sold an additional 40,000 Placement Units at $10.00 per Placement Unit,
generating total gross proceeds of $20,400,000. Following such closing, an additional $20,000,000 of net proceeds ($10.00 per
Unit) was deposited in the Trust Account, resulting in $220,000,000 ($10.00 per Unit) held in the Trust Account.
Transaction costs amounted to $12,821,311,
consisting of $4,400,000 of underwriting fees, $7,700,000 of deferred underwriting fees and $721,311 of legal and other costs.
In addition, as of October 25, 2018, $1,354,817 of cash was held outside of the Trust Account and is available for working capital
purposes.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering and the sale of Placement Units, although substantially all of the net proceeds are intended to be applied generally
toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination
successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at
least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest
earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company
will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”).
CHASERG TECHNOLOGY ACQUISTION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
The
Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity
to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with
a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether
the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely
in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount
then in the Trust Account ($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and
not previously released to the Company to pay its franchise and income tax obligations). The per-share amount to be distributed
to public stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company
will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination
with respect to the Company’s warrants. The Company will proceed with a Business Combination if the Company has net tangible
assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval,
a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and
the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its
Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct
the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file
tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transactions
is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer
to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.
If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to
vote its Founder Shares (as defined in Note 5), Placement Shares (as defined in Note 4) and any Public Shares purchased during
or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect
to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
If
the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer
rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of
such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under
Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming
its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The
Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares, Placement Shares and Public Shares held
by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated
Certificate of Incorporation (i) that would affect the substance or timing of the Company’s obligation to redeem 100% of
its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating
to stockholders’ rights or pre-business combination activity, unless the Company provides the public stockholders with the
opportunity to redeem their Public Shares in conjunction with any such amendment.
The
Company has until April 9, 2020 to consummate a Business Combination (the “Combination Period”). If the Company is
unable to complete a Business Combination by the Combination Period, the Company will (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest
earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate,
subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements
of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants,
which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares and Placement Shares if the Company fails
to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the
Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company
fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to
their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business
Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the
Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible
that the per share value of the assets remaining available for distribution will be less than $10.00 per share.
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent
any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which
the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i)
$10.00 per share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the
Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets. This liability will not apply
with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to
any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public
Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will
not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility
that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service
providers (except for the Company’s independent registered public accounting firm), prospective target businesses or other
entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim
of any kind in or to monies held in the Trust Account.
CHASERG TECHNOLOGY ACQUISTION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions
to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for
interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation
of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed
financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation
of the financial position, operating results and cash flows for the periods presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its
Initial Public Offering as filed with the SEC on October 5, 2018, as well as the Company’s Current Reports on Form 8-K,
as filed with the SEC on October 16, 2018 and October 30, 2018. The interim results for the period from May 21, 2018 (inception)
through September 30, 2018 are not necessarily indicative of the results to be expected for the period from May 21, 2018 (inception)
through December 31, 2018 or for any future periods.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart
our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to,
not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of
the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval
of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and
it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the
new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered
in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could
differ significantly from the Company’s estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of September 30, 2018.
CHASERG TECHNOLOGY ACQUISTION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
Deferred
Offering Costs
Offering
costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly
related to the Initial Public Offering. Offering costs amounting to $12,821,311 were charged to stockholders’ equity upon
the completion of the Initial Public Offering.
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized.
ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of
tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more
likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for
interest and penalties as of September 30, 2018. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by
major taxing authorities since inception.
The
provision for income taxes was deemed to be immaterial for the period from May 21, 2018 (inception) to September 30, 2018.
Net
Loss Per Common Share
Net loss per common share is computed
by dividing net loss by the weighted average number of common shares outstanding during the period, excluding shares of common
stock subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 250,000 shares of common stock
that were subject to forfeiture if the over-allotment option was not exercised by the underwriters (see Note 7). At September
30, 2018, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted
into common stock and then share in the losses of the Company. As a result, diluted loss per share is the same as basic loss per
share for the period presented.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal Depository Insurance Coverage of $250,000. At September 30, 2018, the Company has not experienced
losses on this account and management believes the Company is not exposed to significant risks on such account.
Financial
Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily
due to their short-term nature.
Recent
Accounting Pronouncements
In
August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,”
amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the
amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements.
Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must
be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending
balance of each period for which a statement of income is required to be filed. This final rule is effective on November 5, 2018.
The Company anticipates its first presentation of changes in stockholders’ equity
will be included in its Form 10-Q for the quarter ended March 31, 2019.
Management
does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would
have a material effect on the Company’s financial statements.
CHASERG TECHNOLOGY ACQUISTION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
NOTE
3. PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 22,000,000 Units at a price of $10.00 per Unit, inclusive of 2,000,000
Units sold to the underwriters on October 25, 2018 upon the underwriters’ election to partially exercise their over-allotment
option. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”).
Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share,
subject to adjustment (see Note 7).
NOTE
4. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor and Cantor purchased an aggregate of 600,000 Placement Units at a
price of $10.00 per Placement Unit, for an aggregate purchase price of $6,000,000, of which the Sponsor purchased 500,000
Placement Units and the underwriters purchased 100,000 Placement Units. On October 25, 2018, in connection with the underwriters’
election to partially exercise their over-allotment option, the Company sold an additional 30,000 Placement Units to the Sponsor
and 10,000 Placement Units to the underwriters, at a price of $10.00 per Placement Unit, generating gross proceeds of $400,000.
Each Placement Unit consists of one share of Class A common stock (“Placement Share”) and one-half of one redeemable
warrant (each, a “Placement Warrant”). Each whole Placement Warrant is exercisable to purchase one share of Class
A common stock at a price of $11.50 per share. The proceeds from the Placement Units were added to the proceeds from the
Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination
Period, the proceeds from the sale of the Placement Units will be used to fund the redemption of the Public Shares (subject to
the requirements of applicable law), and the Placement Units and all underlying securities will expire worthless.
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
On
May 30, 2018, the Sponsor purchased 5,750,000 shares (the “Founder Shares”) of the Company’s Class B common
stock for an aggregate price of $25,000. The Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture
to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Sponsor would
own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming
the Sponsor did not purchase any Public Shares in the Initial Public Offering and excluding the Placement Units). As a result
of the underwriters’ election to partially exercise their over-allotment option, 250,000 Founder Shares were forfeited and
500,000 Founder Shares are no longer subject to forfeiture.
The
Founder Shares will automatically convert into Class A common stock upon consummation of a Business Combination on a one-for-one
basis, subject to certain adjustments, as described in Note 7.
The
Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier
to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the
last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least
150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange
or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares
of common stock for cash, securities or other property.
Related
Party Loans
On
May 23, 2018, the Company issued a promissory note to the Sponsor, pursuant to which the Company borrowed an aggregate of
$300,000 to cover expenses related to the Initial Public Offering (the “Promissory Note”). The Promissory Note was
non-interest bearing and payable on the earlier of March 31, 2019 or the completion of the Initial Public Offering. The Promissory
Note was repaid upon the consummation of the Initial Public Offering on October 10, 2018.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the
Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may
be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the
Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would
be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company
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 either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000
of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit.
The units would be identical to the Placement Units.
CHASERG TECHNOLOGY ACQUISTION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
Administrative
Support Agreement
The
Company entered into an agreement whereby, commencing on October 10, 2018 through the earlier of the Company’s consummation
of a Business Combination and its liquidation, to pay an affiliate of the Sponsor a total of $15,000 per month for office
space, utilities and secretarial and administrative support.
NOTE
6. COMMITMENTS
Registration
Rights
Pursuant
to a registration rights agreement entered into on October 4, 2018, the holders of the Founder Shares, Placement Units (including
securities contained therein) and securities that may be issued upon conversion of Working Capital Loans (and any shares of Class
A common stock issuable upon the exercise of the Placement Warrants and warrants that may be issued upon conversion of working
capital loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring the Company to register
such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of
the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register
such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale
such securities pursuant to Rule 415 under the Securities Act. Notwithstanding the foregoing, the underwriters may not exercise
their demand and “piggyback” registration rights after five (5) and seven (7) years after the effective date of the
registration statement and may not exercise their demand rights on more than one occasion. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriters a 45-day option to purchase up to 3,000,000 additional Units to cover over-allotments at the
Initial Public Offering price less the underwriting discounts and commissions. On October 25, 2018, the underwriters elected to
partially exercise their over-allotment option to purchase 2,000,000 Units at a purchase price of $10.00 per Unit.
In
connection with the closing of the Initial Public Offering and the over-allotment option, the underwriters were paid a cash underwriting
discount $4,400,000. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $7,700,000 in the aggregate.
The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the
Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE
7. SHAREHOLDERS’ EQUITY
Preferred
Stock
— The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001
per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s
board of directors. At September 30, 2018, there were no shares of preferred stock issued or outstanding.
Common
Stock
Class
A Common Stock
— The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value
of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At September 30, 2018, there were
no shares of Class A common stock issued or outstanding.
Class
B Common Stock
— The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001
per share. Holders of Class B common stock are entitled to one vote for each share. At September 30, 2018, there were 5,750,000
shares of Class B common stock issued and outstanding, of which an aggregate of up to 750,000 shares were subject to forfeiture
to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Sponsor would
collectively own 20% of the Company’s issued and outstanding common stock after the Initial Public Offering (assuming the
Sponsor did not purchase any Public Shares in the Initial Public Offering and excluding the Placement Units). As a result of the
underwriters’ election to partially exercise their over-allotment option on October 25, 2018, 250,000 Founder Shares were
forfeited, resulting in 5,500,000 shares of Class B common stock issued and outstanding.
CHASERG TECHNOLOGY ACQUISTION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
Holders
of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote
of stockholders except as required by law.
The
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination
on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities,
are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business
Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted
(unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect
to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all
shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all
shares of common stock outstanding upon the completion of the Initial Public Offering (not including the shares of Class A common
stock underlying the Placement Units) plus all shares of Class A common stock and equity-linked securities issued or deemed issued
in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller
in a Business Combination, any private placement-equivalent warrants issued, or to be issued, to any seller in a Business Combination,
any private placement equivalent securities issued to the Sponsor or its affiliates upon conversion of loans made to the Company).
Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class
A common stock, subject to adjustment as provided above, at any time.
Warrants
— Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon
separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30
days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided
in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock
issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that
as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will
use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares
of Class A common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same
to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the Public Warrants
expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common
stock issuable upon exercise of the Public Warrants is not effective by the 60
th
business day after the closing of
a Business Combination, warrantholders may, until such time as there is an effective registration statement and during any period
when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance
with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock is at
the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a
“covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders
of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of
the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration
statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available. If that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the
completion of a Business Combination or earlier upon redemption or liquidation.
Once
the warrants become exercisable, the Company may redeem the Public Warrants:
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in
whole and not in part;
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at
a price of $0.01 per warrant;
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upon
not less than 30 days’ prior written notice of redemption; and
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if,
and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for
any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption
to the warrantholders.
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If,
and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying
such warrants.
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The
Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that
the Placement Warrants and the Class A common stock issuable upon the exercise of the Placement Warrants will not be transferable,
assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally,
the Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers
or their permitted transferees. If the Placement Warrants are held by someone other than the initial purchasers or their permitted
transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the
Public Warrants.
CHASERG TECHNOLOGY ACQUISTION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2018
(Unaudited)
If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise
the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and
number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including
in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not
be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company
be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination
Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds
with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust
Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
NOTE
8. SUBSEQUENT EVENTS
In
October 2018, the Sponsor advanced the Company an aggregate of $23,100 to cover expenses related to the Initial Public Offering.
The advances were non-interest bearing and due on demand. The advances were repaid upon the consummation of the Initial Public
Offering on October 10, 2018.
The Company evaluated subsequent events
and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Other than
as described in these financial statements in relation to the Company’s Initial Public Offering and related transactions,
the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.