Notes to
Condensed Financial Statements (unaudited)
NOTE 1 – DESCRIPTION OF ORGANIZATION AND
BUSINESS OPERATIONS
Organization and General:
Legacy Acquisition Corp. (the “Company”)
was incorporated in Delaware on March 15, 2016. 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”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act
of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS
Act”).
At June 30, 2019, the Company had not commenced
any operations. All activity for the period from March 15, 2016 (inception) through June 30, 2019 relates to the Company’s
formation and the initial public offering (“Public Offering”) described below, and subsequent to the Public Offering,
searching for a potential business combination. The Company will not generate any operating revenues until after completion of
the 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 Public Offering.
Sponsor and Financing:
The Company’s sponsor is Legacy Acquisition
Sponsor I LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s
Public Offering (as described in Note 3) was declared effective by the United States Securities and Exchange Commission (the “SEC”)
on November 16, 2017. The Company intends to finance a Business Combination with the net proceeds from a $300,000,000 public offering
(Note 3) and a $8,750,000 private placement (Note 4). Upon the closing of the Public Offering and the private placement, $300,000,000
is held in the Trust Account with Continental Stock Transfer and Trust Company (the “Trustee”) acting as the trustee
(the “Trust Account”) (as discussed below).
The Trust Account:
Funds from the Public Offering have been
placed in the Trust Account. The Trust Account will be invested only in U.S. government treasury bills with a maturity of one hundred
and eighty (180) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company
Act of 1940 which invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of
(i) the consummation of the Business Combination or (ii) the distribution of the Trust Account as described below. The remaining
proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective Business
Combinations and continuing general and administrative expenses.
The Company’s amended and restated
certificate of incorporation provides that, other than the withdrawal of interest to pay taxes and up to $750,000 per year for
working capital purposes, if any, none of the funds held in trust may be released until the earlier of: (i) the completion of the
initial Business Combination; or (ii) the redemption of any public shares properly tendered in connection with a stockholder vote
to amend the Company’s amended and restated certificate of incorporation to modify the substance and timing or the Company’s
obligation to redeem 100% of its public shares if the Company does not complete its initial business combination within 24 months
from the closing of the Public Offering or (iii) the redemption of 100% of the shares of Class A common stock included in the Units
sold in the Public Offering if the Company is unable to complete a Business Combination within 24 months from the closing of the
Public Offering (subject to the requirements of law).
Business Combination:
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the
net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition
of) a Target Business. As used herein, “Target Business” means one or more target businesses that together have a fair
market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable
on interest earned) at the time of the signing of a definitive agreement in connection with the Business Combination. Furthermore,
there is no assurance that the Company will be able to successfully effect a Business Combination within 24 months from the closing
of the Public Offering, if at all.
The Company, after signing a definitive
agreement for an initial Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting
called for such purpose in connection with which stockholders holding Class A common stock may seek to redeem their shares, regardless
of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then
on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including
interest but less taxes payable and up to $750,000 per year which may be, and has been, released for working capital purposes,
or (ii) provide stockholders holding Class A common stock with the opportunity to sell their shares to the Company by means of
a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate
amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest
but less taxes payable and up to $750,000 per year which may have been released for working capital. The decision as to whether
the Company will seek stockholder approval of the initial Business Combination or will allow stockholders to sell their shares
in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the
timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval
unless a vote is required by New York Stock Exchange (“NYSE”) rules. If the Company seeks stockholder approval, it
will complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of
the Business Combination. However, in no event will the Company redeem its public shares of Class A common stock in an amount that
would cause its net tangible assets to be less than $5,000,001 upon consummation of the Business Combination. In such case, the
Company would not proceed with the redemption of its public shares of Class A common stock and the related Business Combination,
and instead may search for an alternate Business Combination.
If the Company holds a stockholder vote
or there is a tender offer for shares in connection with a Business Combination, a public stockholder will have the right to redeem
its Class A common stock for an amount in cash equal to such stockholder’s pro rata share of the aggregate amount then on
deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest
but less taxes payable and up to $750,000 per year which may have been released to the Company to fund working capital requirements.
As a result, such shares of Class A common stock are recorded at redemption amount and classified as temporary equity in the accompanying
balance sheet, in accordance with FASB ASC 480, “Distinguishing Liabilities from Equity.”
The Company will only have 24 months from
the closing date of the Public Offering to complete its initial Business Combination. If the Company does not complete a Business
Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly
as reasonably possible, but not more than ten business days thereafter, redeem the public shares of Class A common stock for a
per share pro rata portion of the Trust Account, including interest, but less taxes payable and up to $750,000 per year which may
be, and has been, released for working capital (less up to $50,000 of such net interest to pay dissolution expenses) and (iii)
as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its
remaining stockholders, as part of its plan of dissolution and liquidation. The initial stockholder has entered into a letter agreement
with the Company, pursuant to which it has waived its right to participate in any redemption with respect to its initial shares;
however, if the initial stockholder or any of the Company’s officers, directors or affiliates acquire shares of Class A common
stock after the Public Offering, they will be entitled to a pro rata share of the Trust Account, with respect to such public shares,
upon the Company’s redemption or liquidation in the event the Company does not complete a Business Combination within the
required time period.
In the event of such distribution, it is
possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets)
will be less than the initial public offering price per Unit in the Public Offering.
Going Concern
In connection with the Company’s 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”, management
has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability
to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company
be required to liquidate after November 21, 2019.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation:
The accompanying unaudited condensed interim
financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in
the United States of America (“GAAP”) pursuant to the rules and regulations of the SEC and reflect all adjustments,
consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of
the financial position as of June 30, 2019, and the results of operations and cash flows for the periods presented. Certain information
and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules
and regulations. Interim results are not necessarily indicative of results for a full year. All dollar amounts are rounded to the
nearest thousand dollars.
The accompanying unaudited condensed interim
financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
Emerging Growth Company
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 an 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.
Net Income (Loss) per Common Share
Net income (loss) per common share is computed
by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding for
the period. The Company has not considered the effect of the warrants sold in the initial public offering and Private Placement
to purchase an aggregate of 23,750,000 Class A ordinary shares in the calculation of diluted income (loss) per share, since their
inclusion would be anti-dilutive under the treasury stock method. As a result, diluted income (loss) per common share is the same
as basic loss per common share for the period.
The Company’s condensed statements
of operations include a presentation of income (loss) per share for common stock subject to redemption in a manner similar to the
two-class method of income (loss) per share. Net income (loss) per common share, basic and diluted for Class A common stock is
calculated by dividing the interest income earned on the Trust Account, net of income tax expense, franchise tax expense and funds
available to be withdrawn from Trust for working capital purposes (up to a maximum of $750,000 annually), by the weighted average
number of Class A common stock outstanding for the period. Net income (loss) per common share, basic and diluted, for Class F common
stock is calculated by dividing the net income (loss), less income attributable to Class A Common Stock, by the weighted average
number of Class F common stock outstanding for the period. Net income (loss) available to each class of common stockholders is
as follows at June 30, 2019:
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|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to Class A common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
1,805,000
|
|
|
|
1,279,000
|
|
|
$
|
3,566,000
|
|
|
$
|
2,355,000
|
|
Less: Income and franchise taxes
|
|
|
(420,000
|
)
|
|
|
(269,000
|
)
|
|
|
(830,000
|
)
|
|
|
(535,000
|
)
|
Expenses available to be paid with interest income from Trust (up to
a maximum of $750,000 per year)
|
|
|
-
|
|
|
|
(221,000
|
)
|
|
|
-
|
|
|
|
(458,000
|
)
|
Net income available to Class A common stockholders
|
|
$
|
1,385,000
|
|
|
$
|
789,000
|
|
|
$
|
2,736,000
|
|
|
$
|
1,362,000
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to Class F common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
341,000
|
|
|
$
|
789,000
|
|
|
$
|
1,480,000
|
|
|
$
|
1,362,000
|
|
Less: amount attributable to Class A common stockholders
|
|
|
(1,385,000
|
)
|
|
|
(789,000
|
)
|
|
|
(2,736,000
|
)
|
|
|
(1,362,000
|
)
|
Net income (loss) available to class F common
stockholders
|
|
$
|
(1,044,000
|
)
|
|
$
|
-
|
|
|
$
|
(1,256,000
|
)
|
|
$
|
-
|
|
Concentration of Credit Risk:
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the
Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes
the Company is not exposed to significant risks on such accounts.
Financial Instruments:
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the financial statements.
Use of Estimates:
The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires the Company’s 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 amount of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Deferred Offering Costs:
The Company complies with the requirements
of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A – “Expenses of Offering.”
Offering costs of approximately $17,379,000 consisted principally of underwriter discounts of $16,500,000 (including $10,500,000
of which payment is deferred) and approximately $887,000 of professional, printing, filing, regulatory and other costs, have been
charged to additional paid-in-capital upon completion of the Public Offering.
Income Taxes:
The Company follows the asset and liability
method of accounting for income taxes under FASB 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.
The Company’s currently taxable income
consists of interest income on the Trust Account net of franchise taxes. The Company’s general and administrative costs are
generally considered start-up costs and are not currently deductible. The Company recorded income tax expense of approximately
$370,000 and $730,000, respectively, in the three and six months ended June 30, 2019 and $220,000 and $435,000, respectively, in
the three and six months ended June 30, 2018, primarily related to interest income earned on the Trust Account net of franchise
taxes. The Company’s effective tax rate was approximately 52% and 33%, respectively, for the three and six months ended June
30, 2019 and approximately 21% and 24%, respectively, for the three and six months ended June 30, 2018. The Company’s effective
tax rate differs from the expected income tax rate due to the start-up costs (discussed above) which are not currently deductible.
At June 30, 2019 and December 31, 2018, the Company has a deferred tax asset of approximately $620,000 and $355,000, respectively,
primarily related to start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is appropriate
at this time.
FASB 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. There were no unrecognized tax benefits as of June 30, 2019 and December 31, 2018. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment
of interest and penalties at June 30, 2019 and December 31, 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.
Redeemable Common Stock:
As discussed in Note 3, all of the 30,000,000
common shares sold as part of a Unit in the Public Offering contain a redemption feature which allows for the redemption of common
shares under the Company’s Liquidation or Tender Offer/Stockholder Approval provisions. In accordance with FASB 480, redemption
provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary
liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded
from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides
that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity)
to be less than $5,000,001.
The Company recognizes changes immediately
as they occur and adjusts the carrying value of the securities at the end of each reporting period. Increases or decreases in the
carrying amount of redeemable common stock are affected by adjustments to additional paid-in capital. Accordingly, at June 30,
2019 and December 31, 2018, 29,064,144 and 28,916,141, respectively, of the 30,000,000 Public Shares were classified outside of
permanent equity.
Recent Accounting Pronouncements:
Management does not believe that any recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s
financial statements.
NOTE 3 – PUBLIC OFFERING
On November 21, 2017, the Company closed
on the Public Offering and sale of 30,000,000 units at a price of $10.00 per unit (the “Units”). Each Unit consists
of one share of the Company’s Class A common stock, $0.0001 par value and one redeemable common stock purchase warrant (the
“Warrants”). Under the terms of a warrant agreement, the Company has agreed to use its best efforts to file a new registration
statement under the Securities Act, following the completion of the initial Business Combination. Each Warrant entitles the holder
to purchase one half of one share of Class A common stock at a price of $5.75 (11.50 per whole share). No fractional shares will
be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional
interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of Class A common
stock to be issued to the warrant holder. Each Warrant will become exercisable on the later of 30 days after the completion of
the Company’s initial Business Combination or 12 months from the closing of the Public Offering and will expire five years
after the completion of the Company’s initial Business Combination or earlier upon redemption or liquidation. However, if
the Company does not complete its initial Business Combination on or prior to the 24-month period allotted to complete the Business
Combination, the Warrants will expire at the end of such period. If the Company is unable to deliver registered shares of Class
A common stock to the holder upon exercise of Warrants issued in connection with the 30,000,000 public units during the exercise
period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they may be exercised
on a cashless basis in the circumstances described in the warrant agreement. Once the warrants become exercisable, the Company
may redeem the outstanding warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior
written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or
exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company
sends the notice of redemption to the warrant holders.
The Company granted the underwriters in
the Public Offering a 45-day option to purchase up to 4,500,000 additional Units to cover any over-allotment, at the initial public
offering price less the underwriting discounts and commissions. On November 27, 2017, the Company was advised by the underwriters’
that the overallotment option would not be exercised. As such, the 1,125,000 shares subject to forfeiture which are described in
Note 4 were forfeited.
The Company paid an underwriting discount
of 2% of the per Unit offering price to the underwriters at the closing of the Public Offering ($6,000,000), with an additional
fee (the “Deferred Discount”) of 3.5% of the gross offering proceeds ($10,500,000) payable upon the Company’s
completion of a Business Combination. The Deferred Discount will become payable to the underwriters from the amounts held in the
Trust Account solely in the event the Company completes its initial Business Combination.
NOTE 4 – RELATED PARTY TRANSACTIONS
Founder Shares
In October 2016, the Sponsor purchased 8,625,000
shares of Class F common stock (the “Founder Shares”) for $25,000, or approximately $0.001 per share (see Note 6).
The Founder Shares are identical to the Class A common stock included in the Units being sold in the Public Offering except that
the Founder Shares are convertible under the circumstances described below and subject to certain transfer restrictions, as described
in more detail below. The Sponsor agreed to forfeit up to 1,125,000 Founder Shares to the extent that the over-allotment option
was not exercised in full by the underwriters (see Notes 3 and 5) so that the initial stockholder would own 20.0% of the Company’s
issued and outstanding shares after the Public Offering. As discussed further in Notes 3 and 5, on November 27, 2017, the underwriters’
notified the Company that they would not exercise the overallotment option and, as such, the 1,125,000 shares that were subject
to forfeiture were forfeited as of the closing of the Public Offering on November 21, 2017. The Founder Shares will automatically
convert into shares of Class A common stock at the time of the Business Combination on a one-for-one basis, subject to adjustment
as described in the Company’s amended and restated certificate of incorporation.
The Company’s initial stockholder
has agreed not to transfer, assign or sell any of its Founder Shares until the earlier of (A) one year after the completion of
the Company’s initial Business Combination, or earlier if, subsequent to the Company’s initial Business Combination,
the last sale price of the Company’s 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 the Company’s initial Business Combination or (B) the date on which the Company completes a liquidation,
merger, stock exchange or other similar transaction after the initial Business Combination 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 (the “Lock
Up Period”).
Private Placement Warrants
Upon the closing of the Public Offering
on November 21, 2017, the Sponsor paid the Company $8,750,000 for the private placement purchase from the Company of 17,500,000
warrants at $0.50 per warrant (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder
to purchase one-half of one share of Class A common stock at $5.75 ($11.50 per whole share). A portion of the purchase price of
the Private Placement Warrants has been added to the proceeds from the Public Offering held in the Trust Account pending completion
of the Company’s initial Business Combination. The Private Placement Warrants (including the common stock issuable upon exercise
of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the initial
Business Combination and are non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private
Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will
be redeemable by the Company and exercisable by such holders on the same basis as the warrants included in the Units being sold
in the Public Offering. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the
Warrants sold as part of the Units in the Public Offering and have no net cash settlement provisions.
If the Company does not complete a Business
Combination within the required time period, then the proceeds will be part of the liquidating distribution to the public stockholders
and the Warrants issued to the Sponsor will expire worthless.
Registration Rights
The Company’s initial stockholder
and holders of the Private Placement Warrants are entitled to registration rights (in the case of the Founder Shares, only after
conversion to shares of Class A common stock) pursuant to a registration rights agreement dated November 16, 2017. The Company’s
initial stockholder and holders of the Private Placement Warrants are entitled to make up to three demands, excluding short form
registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders have
“piggy-back” registration rights to include their securities in other registration statements filed by the Company.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Administrative Service Agreement and Services Agreement
The Company pays $10,000 a month ($30,000
for the three months, and $60,000 for the six months, ended June 30, 2019 and 2018) for office space, accounting services, utilities
and secretarial support provided by the Sponsor subsequent to the date the Company’s securities were first listed on the
NYSE. Such monthly fee will terminate upon the earlier of the consummation by the Company of an initial Business Combination or
the liquidation of the Company.
NOTE 5 – TRUST ACCOUNT AND FAIR VALUE MEASUREMENT
The Company complies with FASB ASC 820,
Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting
period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
Upon the closing of the Public Offering
and the private placement, a total of $300,000,000 was deposited into the Trust Account. All proceeds in the Trust Account may
be invested in either U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain
conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, and that invest solely in U.S. government treasury
obligations.
At June 30, 2019 and December 31, 2018,
the proceeds of the Trust Account were invested in U.S. government treasury bills. U.S. government treasury bills held at June
30, 2019 mature in July 2019 and yield interest of approximately 2.4%. The Company classifies its U.S. government treasury bills
and equivalent securities as held-to-maturity in accordance with FASB ASC 320, “Investments – Debt and Equity Securities.”
Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity
U.S. government treasury bills are recorded at amortized cost on the accompanying June 30, 2019 and December 31, 2018 condensed
balance sheets and adjusted for the amortization of discounts.
The following table presents information
about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018
and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. Since all
of the Company’s permitted investments at June 30, 2019 and December 31, 2018 consist of U.S. government treasury bills or
money market funds holding U.S. government treasury bills, fair values of its investments are determined by Level 1 inputs utilizing
quoted prices (unadjusted) in active markets for identical assets or liabilities as follows:
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Quoted Price
|
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|
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Carrying value at
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Gross Unrealized
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|
Prices in
Active
|
|
|
|
June 30,
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Holding
|
|
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Markets
|
|
Description
|
|
2019
|
|
|
Gain
|
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|
(Level
1)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Cash and money market
|
|
$
|
1,000
|
|
|
$
|
-
|
|
|
$
|
1,000
|
|
U.S. government treasury bills
|
|
|
305,689,000
|
|
|
|
42,000
|
|
|
|
305,731,000
|
|
Total
|
|
$
|
305,690,000
|
|
|
$
|
42,000
|
|
|
$
|
305,732,000
|
|
|
|
Carrying value at
|
|
|
Gross
Unrealized
|
|
|
Quoted
Price
Prices in
Active
|
|
|
|
December 31,
|
|
|
Holding
|
|
|
Markets
|
|
Description
|
|
2018
|
|
|
Loss
|
|
|
(Level
1)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Cash
and money market
|
|
$
|
1,000
|
|
|
$
|
-
|
|
|
$
|
1,000
|
|
U.S. government
treasury bills
|
|
|
304,034,000
|
|
|
|
(7,000
|
)
|
|
|
304,027,000
|
|
Total
|
|
$
|
304,035,000
|
|
|
$
|
(7,000
|
)
|
|
$
|
304,028,000
|
|
The U.S. government treasury bills that
matured in July 2019 were reinvested in U.S. government treasury bills maturing in August 2019. During the six months ended June
30, 2019, the Company withdrew approximately $1,910,000 from the Trust Account in order to pay 2018 actual and 2019 estimated income
taxes (approximately $812,000) and franchise taxes (approximately $348,000) paid in installments in January 2019, April 2019 and
May 2019) and to release the 2019 $750,000 allowed for working capital.
NOTE 6 – STOCKHOLDERS’ EQUITY
Common Stock
The authorized common stock of the Company
is 110,000,000 shares, including 100,000,000 shares of Class A common stock, par value $0.0001, and 10,000,000 shares of Class
F common stock, par value $0.00001. Upon completion of the Public Offering, the Company will likely (depending on the terms of
the initial Business Combination) be required to increase the number of shares of common stock which it is authorized to issue
at the same time as its stockholders vote on the Business Combination to the extent the Company seeks stockholder approval in connection
with its initial Business Combination. Holders of the Company’s common stock vote together as a single class and are entitled
to one vote for each share of common stock.
In October 2016, the Sponsor purchased 8,625,000
shares of Class F common stock (the “Founder Shares”) for $25,000, or approximately $0.004 per share. The Sponsor had
agreed to forfeit up to 1,125,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters.
The forfeiture would be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that
the initial stockholder will own 20% of the Company’s issued and outstanding shares after the Public Offering. On November
27, 2017, the Company was advised by the underwriters’ that the overallotment option would not be exercised. As such, the
1,125,000 shares subject to forfeiture were forfeited. As such at June 30, 2019 and December 31, 2018 there were 7,500,000 shares
of Class F common stock issued and outstanding and 30,000,000 shares of Class A common stock outstanding (29,064,144 and 28,916,141,
respectively, of which are classified outside of equity as redeemable common stock).
Preferred Stock
The Company is authorized to issue 1,000,000
shares of preferred stock, par value $0.0001, with such designations, voting and other rights and preferences as may be determined
from time to time by the Board of Directors. At June 30, 2019 and December 31, 2018, the rights and preferences have not been determined
and there were no shares of preferred stock issued and outstanding.