| DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Big Rock Partners Acquisition Corp. (the “Company”) is
a blank check company incorporated in Delaware on
September 18, 2017. The Company was formed for the purpose of
acquiring, through a merger, share exchange, asset acquisition,
stock purchase, reorganization, recapitalization, or other similar
business transaction, one or more operating businesses or entities
(a “Business Combination”). The Company is not limited
to a particular industry or geographic region for purposes of
consummating a Business Combination.
The Company has one subsidiary, Big Rock Merger Corp., a
wholly-owned subsidiary of the Company incorporated in Delaware on
January 22, 2019 (“Merger Sub”).
All activity through March 31, 2021 relates to the
Company’s formation, its initial public offering
(“Initial Public Offering”), which is described below,
identifying a target company for a Business Combination, and
activities in connection with the proposed acquisition of NeuroRx,
Inc., a Delaware corporation (“NeuroRx”) (see Note
8).
The registration statement for the Company’s Initial Public
Offering was declared effective on November 20, 2017. On
November 22, 2017, the Company consummated the Initial Public
Offering of 6,000,000 units (the “Units” and, with
respect to the common stock included in the Units being offered,
the “Public Shares”), generating gross proceeds of
$60,000,000, which is described in Note 3. Each Unit consists of
one share of common stock, one right (“Public Right”)
and one-half one-tenth
Simultaneously with the Initial Public Offering, the Company
consummated the sale of 250,000 units (the “Private Placement
Units”) at a price of $10.00 per Unit in a private placement
to Big Rock Partners Sponsor, LLC (the “Sponsor”),
generating gross proceeds of $2,500,000, which is described in Note
4.
Following the closing of the Initial Public Offering, $60,000,000
($10.00 per Unit) from the net proceeds of the sale of the Units in
the Initial Public Offering and the Private Placement Units was
placed in a trust account (the “Trust Account”) which
may be 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
On November 29, 2017, in connection with the
underwriters’ exercise of their over-allotment option in
full, the Company consummated the sale of an additional 900,000
Units, and the sale of an additional 22,500 Private Placement Units
at $10.00 per unit, generating total gross proceeds of $9,225,000.
A total of $9,000,000 of the net proceeds were deposited in the
Trust Account, bringing the aggregate proceeds held in the Trust
Account to $69,000,000.
At the closing of the Initial Public Offering, the Company issued
EarlyBirdCapital, Inc. (“EarlyBirdCapital”) and its
designees 120,000 shares of common stock (the “Representative
Shares”). On November 29, 2017, the Company issued an
additional 18,000 Representative Shares for no consideration (see
Note 9).
Transaction costs amounted to $2,172,419, consisting of $1,725,000
of underwriting fees and $447,419 of Initial Public Offering
costs.
The Company’s management has broad discretion with respect to
the specific application of the net proceeds of the Initial Public
Offering and Private Placement Units, although substantially all of
the net proceeds are intended to be applied generally toward
consummating a Business Combination. The Company’s initial
Business Combination must be with one or more target businesses
that together have a fair market value equal to at least 80% of the
balance in the Trust Account (excluding taxes payable on income
earned on the Trust Account) at the time of the signing an
agreement to enter into a Business Combination. The Company will
only complete a Business Combination if the post-Business
Combination 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.
There is no assurance that the Company will be able to successfully
effect a Business Combination.
The Company will provide its stockholders with the opportunity to
redeem all or a portion of their shares included in the Units sold
in the Initial Public Offering (the “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 stockholders will be
entitled to redeem their shares for a pro rata portion of the
amount then on deposit in the Trust Account ($10.00 per 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). 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 outstanding 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, conduct the redemptions pursuant to the tender offer
rules of the Securities and Exchange Commission (the
“SEC”), and file tender offer documents with the SEC
prior to completing a Business Combination. If, however, a
stockholder approval of the transaction is required by law, or the
Company decides to obtain stockholder approval for business or
other 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, officers and directors (the “Initial
Stockholders”) have agreed (a) to vote their
Founder’s Shares (as defined in Note 5), Placement Shares (as
defined in Note 4) and any Public Shares held by them in favor of
approving a Business Combination and (b) not to convert any
Founder’s Shares, Placement Shares and any Public Shares held
by them in connection with a stockholder vote to approve a Business
Combination or sell any such shares to the Company in a tender
offer in connection with 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.
The Company initially had until November 22, 2018 to complete
a Business Combination. However, if the Company anticipated that it
would not be able to consummate a Business Combination by
November 22, 2018, the Company could extend the period of time
to consummate a Business Combination up to two times, each by an
additional three months. Pursuant to the terms of the
Company’s Amended and Restated Certificate of Incorporation
and the trust agreement entered into between the Company and
Continental Stock Transfer & Trust Company on
November 20, 2017, in order to extend the time available for
the Company to consummate a Business Combination, the Sponsor or
its affiliates or designees must deposit into the Trust Account
$690,000 ($0.10 per share) for each three month extension, up to an
aggregate of $1,380,000, or $0.20 per share, if the Company extends
for the full six months, on or prior to the date of the applicable
deadline.
On November 20, 2018, the period of time for the Company to
consummate a Business Combination was extended for an additional
three-month period ending on February 22, 2019, and,
accordingly, $690,000 was deposited into the Trust Account. On
February 21, 2019, the Company further extended the time
required to consummate a Business Combination to May 22, 2019
and deposited an additional $690,000 into the Trust Account. The
deposits were funded by non-interest
On May 21, 2019, the Company’s stockholders approved an
amendment to its Amended and Restated Certificate of Incorporation
to extend the period of time for which the Company was required to
consummate a Business Combination to August 22, 2019. The
number of shares of common stock presented for redemption in
connection with the extension was 2,119,772. The Company paid cash
in the aggregate amount of $22,099,233, or approximately $10.43 per
share, to redeeming stockholders. The Company agreed to deposit, or
cause to be deposited on its behalf, into the Trust Account $0.02
for each public share outstanding for each 30-day
On August 21, 2019, the Company stockholders approved an
amendment to the Company’s Amended and Restated Certificate
of Incorporation to extend the period of time for which the Company
is required to consummate a Business Combination (the
“Extension”) from August 22, 2019 to
November 22, 2019. The number of shares of common stock
presented for redemption in connection with the Extension was
846,888. The Company paid cash in the aggregate amount of
$8,891,378, or approximately $10.50 per share, to redeeming
stockholders. The Company agreed to deposit, or cause to be
deposited on its behalf, into the Trust Account $0.02 for each
public share outstanding for each 30-day
On November 21, 2019, the Company’s stockholders
approved an amendment to the Company’s Amended and Restated
Certificate of Incorporation to extend the period of time for which
the Company is required to consummate a Business Combination (the
“Second Extension”) from November 22, 2019 to
March 23, 2020. The number of shares of common stock presented
for redemption in connection with the Second Extension was 919,091.
The Company paid cash in the aggregate amount of $9,736,077, or
approximately $10.59 per share, to redeeming stockholders. The
Company agreed to deposit, or cause to be deposited on its behalf,
into the Trust Account $0.02 for each public share outstanding for
each 30-day thirty-day
On March 23, 2020, the Company’s stockholders approved
an amendment to the Amended and Restated Certificate of
Incorporation to extend the period of time for which the Company is
required to consummate a Business Combination (the “Third
Extension”) from March 23, 2020 to July 23, 2020.
The number of shares of common stock presented for redemption in
connection with the Third Extension was 2,433,721. The Company paid
cash in the aggregate amount of $25,997,965, or approximately
$10.68 per share, to redeeming stockholders. The Company agreed to
deposit, or cause to be deposited on its behalf, into the Trust
Account $0.02 for each public share outstanding for each
30-day 10-day 10-day
On July 23, 2020, the Company’s stockholders approved an
amendment to the Amended and Restated Certificate of Incorporation
to extend the period of time for which the Company is required to
consummate a Business Combination (the “Fourth
Extension”) from July 23, 2020 to December 23,
2020. The number of shares of common stock presented for redemption
in connection with the Fourth Extension was 27,786. The Company
paid cash in amount of $299,253, or approximately $10.77 per share,
to redeeming stockholders. The Company agreed to deposit, or cause
to be deposited on its behalf, into the Trust Account $0.02 for
each public share outstanding for each 30-day 10-day 10-day
On December 18, 2020, the Company held a special meeting
pursuant to which the Company’s stockholders approved an
amendment to the Amended and Restated Certificate of Incorporation
to extend the period of time for which the Company is required to
consummate a Business Combination (the “Fifth
Extension”) from December 23, 2020 to April 23,
2021 (the “Extended Date”). In connection with this
extension, no stockholders elected to redeem their shares of common
stock.
On April 21, 2021, the Company held a special meeting pursuant
to which the Company’s stockholders approved an amendment to
the Amended and Restated Certificate of Incorporation to extend the
period of time for which the Company is required to consummate a
Business Combination (the “Sixth Extension”) from
April 23, 2021 to May 24, 2021 (the “Extended
Date”). The number of shares of common stock presented for
redemption in connection with the Fourth Extension was 330. The
Company paid cash in amount of $3,563, or approximately $10.80 per
share, to redeeming stockholders.
If the Company is unable to complete a Business Combination by the
Extended Date, the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as
reasonably possible but no more than ten business days thereafter,
redeem 100% of the outstanding 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 (net of taxes
payable), 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 liquidation distributions, if any), subject to
applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining
stockholders and the Company’s board of directors, proceed to
commence a voluntary liquidation and thereby a formal dissolution
of the Company, subject in each case to its obligations to provide
for claims of creditors and the requirements of applicable law. In
the event of such distribution, it is possible that the per share
value of the assets remaining available for distribution (including
Trust Account assets) will be less than the $10.00 per Unit in the
Initial Public Offering.
The Initial Stockholders have agreed to (i) waive their
redemption rights with respect to Founder Shares, Placement Shares
and any Public Shares they may acquire during or after the Initial
Public Offering in connection with the consummation of a Business
Combination, (ii) to waive their rights to liquidating
distributions from the Trust Account with respect to their
Founder’s Shares and Placement Shares if the Company fails to
consummate a Business Combination by the Extended Date and
(iii) not to propose an amendment to the Company’s
Amended and Restated Certificate of Incorporation 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, unless the Company provides the public
stockholders with the opportunity to redeem their Public Shares in
conjunction with any such amendment. However, the Initial
Stockholders will be entitled to liquidating distributions with
respect to any Public Shares acquired if the Company fails to
consummate a Business Combination or liquidates by Extended
Date.
In order to protect the amounts held in the Trust Account, A/Z
Property Partners, has agreed that it will be liable to ensure that
the proceeds in the Trust Account are not reduced below $10.00 per
share by the claims of target businesses or claims of vendors or
other entities that are owed money by the Company for services
rendered or contracted for or products sold to the Company.
Additionally, the agreement entered into by AZ Property Partners
specifically provides for two exceptions to the indemnity it has
given: it will have no liability (1) as to any claimed amounts
owed to a target business or vendor or other entity who has
executed an agreement with the Company waiving any right, title,
interest or claim of any kind they may have in or to any monies
held in the Trust Account, or (2) as to any claims for
indemnification by the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended
(the “Securities Act”). The Company will seek to reduce
the possibility that AZ Property Partners will have to indemnify
the Trust Account due to claims of creditors by endeavoring to have
all vendors, service providers, 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.
NASDAQ Notifications
On January 4, 2021, the Company received a notice from the
Staff stating that the Company’s failure to hold an annual
stockholder meeting for the fiscal year ended December 31,
2019 by December 31, 2020, as required by Nasdaq Listing Rule
5820, could serve as an additional basis for delisting the
Company’s securities from Nasdaq. The Company requested a
hearing before the Panel to appeal the Staff’s determination
with respect to both notices and the hearing was held on
January 14, 2021. The Panel’s decision is subject to
certain conditions, including that the Company will have completed
its proposed business combination (the “Business
Combination”) with NeuroRx on or before the Extended Date and
that the combined company will have demonstrated compliance with
all requirements for initial listing on Nasdaq. While the Company
expects to complete the Business Combination by the Extended Date,
the Company cannot assure you that it will be able to do so.
On January 15, 2021, the Company received notice from the
Nasdaq that a Nasdaq Hearings Panel (“Panel”) had
granted the Company’s request to continue its listing on
Nasdaq through May 24, 2021 (“Extended Date”).
Liquidity
As of March 31, 2021, the Company had $232 in its operating
bank account, $5,968,035 in cash and marketable securities held in
the Trust Account to be used for a Business Combination or to
repurchase or convert stock in connection therewith and an adjusted
working capital deficit of $643,461, which excludes prepaid income
taxes of $59,492, which have been paid from amounts in the Trust
Account. As of March 31, 2021, approximately $120,000 of the
amount on deposit in the Trust Account represented interest income,
which is available to pay the Company’s tax obligations. To
date, the Company has withdrawn $716,788 of interest from the Trust
Account in order to pay the Company’s franchise and income
taxes, of which no amounts were withdrawn during the three months
ended March 31, 2021.
On November 17, 2018, the Company entered into an agreement
(the “Agreement”) with the Sponsor and BRAC, pursuant
to which the Sponsor agreed to be responsible for all liabilities
of the Company as of November 17, 2018 and to loan the Company
the funds necessary to pay the expenses of the Company other than
Business Combination expenses through the closing of a Business
Combination when and as needed. If a Business Combination is not
consummated, all outstanding loans made by the Sponsor will be
forgiven (see Note 6). In addition, BRAC agreed to loan the
Company all funds necessary to pay expenses incurred in connection
with and in order to consummate a business combination (the
“Business Combination Expenses”) and such loans will be
added to the Initial Notes (as defined in Note 6). If the Company
does not consummate a Business Combination, all outstanding loans
under the Notes will be forgiven, except to the extent of any funds
held outside of the Trust Account after paying all other fees and
expenses of the Company incurred prior to the date of such failure
to consummate a Business Combination (see Note 6).
The Company may raise additional capital through loans or
additional investments from the Sponsor or its stockholders,
officers, directors, or third parties. Other than as described
above, the Company’s officers and directors and the Sponsor
may, but are not obligated to, loan the Company funds, from time to
time, in whatever amount they deem reasonable in their sole
discretion, to meet the Company’s working capital needs.
The Company does not believe it will need to raise additional funds
in order to meet expenditures required for operating its business.
Neither the Sponsor, nor any of the stockholders, officers or
directors, or third parties are under any obligation to advance
funds to, or invest in, the Company, except as discussed above.
Accordingly, the Company may not be able to obtain additional
financing. If the Company is unable to raise additional capital, it
may be required to take additional measures to conserve liquidity,
which could include, but not necessarily be limited to suspending
the pursuit of a potential transaction. The Company cannot provide
any assurance that new financing will be available to it on
commercially acceptable terms, if at all. Even if the Company can
obtain sufficient financing or raise additional capital, it only
has until May 24, 2021 (or as may be extended) to consummate a
Business Combination. There is no assurance that the Company will
be able to do so prior to May 24, 2021, or as may be extended
by shareholder vote.
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 | 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Big Rock Partners Acquisition Corp. (the “Company”) is
a blank check company incorporated in Delaware on
September 18, 2017. The Company was formed for the purpose of
acquiring, through a merger, share exchange, asset acquisition,
stock purchase, reorganization, recapitalization, or other similar
business transaction, one or more operating businesses or entities
(a “Business Combination”). The Company is not limited
to a particular industry or geographic region for purposes of
consummating a Business Combination.
The Company has one subsidiary, Big Rock Merger Corp., a
wholly-owned subsidiary of the Company incorporated in Delaware on
January 22, 2019 (“Merger Sub”).
All activity through December 31, 2020 relates to the
Company’s formation, its initial public offering
(“Initial Public Offering”), which is described
below, identifying a target company for a Business Combination, and
activities in connection with the proposed acquisition of NeuroRx,
Inc., a Delaware corporation (“ NeuroRx
The registration statement for the Company’s Initial Public
Offering was declared effective on November 20, 2017. On
November 22, 2017, the Company consummated the Initial Public
Offering of 6,000,000 units (the “Units” and, with
respect to the common stock included in the Units being offered,
the “Public Shares”), generating gross proceeds of
$60,000,000, which is described in Note 4. Each Unit consists of
one share of common stock, one right (“Public Right”)
and one-half one-tenth
Simultaneously with the Initial Public Offering, the Company
consummated the sale of 250,000 units (the “Private Placement
Units”) at a price of $10.00 per Unit in a private placement
to Big Rock Partners Sponsor, LLC (the “Sponsor”),
generating gross proceeds of $2,500,000, which is described in Note
5.
Following the closing of the Initial Public Offering, $60,000,000
($10.00 per Unit) from the net proceeds of the sale of the Units in
the Initial Public Offering and the Private Placement Units was
placed in a trust account (the “Trust Account”) which
may be 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
On November 29, 2017, in connection with the
underwriters’ exercise of their over-allotment option in
full, the Company consummated the sale of an additional 900,000
Units, and the sale of an additional 22,500 Private Placement Units
at $10.00 per unit, generating total gross proceeds of $9,225,000.
A total of $9,000,000 of the net proceeds were deposited in the
Trust Account, bringing the aggregate proceeds held in the Trust
Account to $69,000,000.
At the closing of the Initial Public Offering, the Company issued
EarlyBirdCapital, Inc. (“EarlyBirdCapital”) and its
designees 120,000 shares of common stock (the “Representative
Shares”). On November 29, 2017, the Company issued an
additional 18,000 Representative Shares for no consideration (see
Note 9).
Transaction costs amounted to $2,172,419, consisting of $1,725,000
of underwriting fees and $447,419 of Initial Public Offering
costs.
The Company’s management has broad discretion with respect to
the specific application of the net proceeds of the Initial Public
Offering and Private Placement Units, although substantially all of
the net proceeds are intended to be applied generally toward
consummating a Business Combination. The Company’s initial
Business Combination must be with one or more target businesses
that together have a fair market value equal to at least 80% of the
balance in the Trust Account (excluding taxes payable on income
earned on the Trust Account) at the time of the signing an
agreement to enter into a Business Combination. The Company will
only complete a Business Combination if the post-Business
Combination 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.
There is no assurance that the Company will be able to successfully
effect a Business Combination.
The Company will provide its stockholders with the opportunity to
redeem all or a portion of their shares included in the Units sold
in the Initial Public Offering (the “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 stockholders will be
entitled to redeem their shares for a pro rata portion of the
amount then on deposit in the Trust Account ($10.00 per 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). 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 outstanding 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, conduct the redemptions pursuant to the tender offer
rules of the Securities and Exchange Commission (the
“SEC”), and file tender offer documents with the SEC
prior to completing a Business Combination. If, however, a
stockholder approval of the transaction is required by law, or the
Company decides to obtain stockholder approval for business or
other 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, officers and directors (the “Initial
Stockholders”) have agreed (a) to vote their
Founder’s Shares (as defined in Note 6), Placement Shares (as
defined in Note 5) and any Public Shares held by them in favor of
approving a Business Combination and (b) not to convert any
Founder’s Shares, Placement Shares and any Public Shares held
by them in connection with a stockholder vote to approve a Business
Combination or sell any such shares to the Company in a tender
offer in connection with 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.
The Company initially had until November 22, 2018 to complete
a Business Combination. However, if the Company anticipated that it
would not be able to consummate a Business Combination by
November 22, 2018, the Company could extend the period of time
to consummate a Business Combination up to two times, each by an
additional three months. Pursuant to the terms of the
Company’s Amended and Restated Certificate of Incorporation
and the trust agreement entered into between the Company and
Continental Stock Transfer & Trust Company on
November 20, 2017, in order to extend the time available for
the Company to consummate a Business Combination, the Sponsor or
its affiliates or designees must deposit into the Trust Account
$690,000 ($0.10 per share) for each three month extension, up to an
aggregate of $1,380,000, or $0.20 per share, if the Company extends
for the full six months, on or prior to the date of the applicable
deadline.
On November 20, 2018, the period of time for the Company to
consummate a Business Combination was extended for an additional
three-month period ending on February 22, 2019, and,
accordingly, $690,000 was deposited into the Trust Account. On
February 21, 2019, the Company further extended the time
required to consummate a Business Combination to May 22, 2019
and deposited an additional $690,000 into the Trust Account. The
deposits were funded by non-interest
On May 21, 2019, the Company’s stockholders approved an
amendment to its Amended and Restated Certificate of Incorporation
to extend the period of time for which the Company was required to
consummate a Business Combination to August 22, 2019. The
number of shares of common stock presented for redemption in
connection with the extension was 2,119,772. The Company paid cash
in the aggregate amount of $22,099,233, or approximately $10.43 per
share, to redeeming stockholders. The Company agreed to deposit, or
cause to be deposited on its behalf, into the Trust Account $0.02
for each public share outstanding for each 30-day
On August 21, 2019, the Company stockholders approved an
amendment to the Company’s Amended and Restated Certificate
of Incorporation to extend the period of time for which the Company
is required to consummate a Business Combination (the
“Extension”) from August 22, 2019 to
November 22, 2019. The number of shares of common stock
presented for redemption in connection with the Extension was
846,888. The Company paid cash in the aggregate amount of
$8,891,378, or approximately $10.50 per share, to redeeming
stockholders. The Company agreed to deposit, or cause to be
deposited on its behalf, into the Trust Account $0.02 for each
public share outstanding for each 30-day
On November 21, 2019, the Company’s stockholders
approved an amendment to the Company’s Amended and Restated
Certificate of Incorporation to extend the period of time for which
the Company is required to consummate a Business Combination (the
“Second Extension”) from November 22, 2019 to
March 23, 2020. The number of shares of common stock presented
for redemption in connection with the Second Extension was 919,091.
The Company paid cash in the aggregate amount of $9,736,077, or
approximately $10.59 per share, to redeeming stockholders. The
Company agreed to deposit, or cause to be deposited on its behalf,
into the Trust Account $0.02 for each public share outstanding for
each 30-day first thirty-day
On March 23, 2020, the Company’s stockholders approved
an amendment to the Amended and Restated Certificate of
Incorporation to extend the period of time for which the Company is
required to consummate a Business Combination (the “Third
Extension”) from March 23, 2020 to July 23, 2020.
The number of shares of common stock presented for redemption in
connection with the Third Extension was 2,433,721. The Company paid
cash in the aggregate amount of $25,997,965, or approximately
$10.68 per share, to redeeming stockholders. The Company agreed to
deposit, or cause to be deposited on its behalf, into the Trust
Account $0.02 for each public share outstanding for each
30-day 10-day 10-day
On July 23, 2020, the Company’s stockholders approved an
amendment to the Amended and Restated Certificate of Incorporation
to extend the period of time for which the Company is required to
consummate a Business Combination (the “Fourth
Extension”) from July 23, 2020 to December 23,
2020. The number of shares of common stock presented for redemption
in connection with the Fourth Extension was 27,786. The Company
paid cash in amount of $299,253, or approximately $10.77 per share,
to redeeming stockholders. The Company agreed to deposit, or cause
to be deposited on its behalf, into the Trust Account $0.02 for
each public share outstanding for each 30-day 10-day 10-day
On December 18, 2020, the Company held a special meeting
pursuant to which the Company’s stockholders approved an
amendment to the Amended and Restated Certificate of Incorporation
to extend the period of time for which the Company is required to
consummate a Business Combination (the “Fifth
Extension”) from December 23, 2020 to April 23,
2021 (the “Extended Date”). In connection with this
extension, no stockholders elected to redeem their shares of common
stock.
If the Company is unable to complete a Business Combination by the
Extended Date, the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as
reasonably possible but no more than ten business days thereafter,
redeem 100% of the outstanding 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 (net of taxes
payable), 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 liquidation distributions, if any), subject to
applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining
stockholders and the Company’s board of directors, proceed to
commence a voluntary liquidation and thereby a formal dissolution
of the Company, subject in each case to its obligations to provide
for claims of creditors and the requirements of applicable law. In
the event of such distribution, it is possible that the per share
value of the assets remaining available for distribution (including
Trust Account assets) will be less than the $10.00 per Unit in the
Initial Public Offering.
The Initial Stockholders have agreed to (i) waive their
redemption rights with respect to Founder Shares, Placement Shares
and any Public Shares they may acquire during or after the Initial
Public Offering in connection with the consummation of a Business
Combination, (ii) to waive their rights to liquidating
distributions from the Trust Account with respect to their
Founder’s Shares and Placement Shares if the Company fails to
consummate a Business Combination by the Extended Date and
(iii) not to propose an amendment to the Company’s
Amended and Restated Certificate of Incorporation 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, unless the Company provides the public
stockholders with the opportunity to redeem their Public Shares in
conjunction with any such amendment. However, the Initial
Stockholders will be entitled to liquidating distributions with
respect to any Public Shares acquired if the Company fails to
consummate a Business Combination or liquidates by Extended
Date.
In order to protect the amounts held in the Trust Account, A/Z
Property Partners, has agreed that it will be liable to ensure that
the proceeds in the Trust Account are not reduced below $10.00 per
share by the claims of target businesses or claims of vendors or
other entities that are owed money by the Company for services
rendered or contracted for or products sold to the Company.
Additionally, the agreement entered into by AZ Property Partners
specifically provides for two exceptions to the indemnity it has
given: it will have no liability (1) as to any claimed amounts
owed to a target business or vendor or other entity who has
executed an agreement with the Company waiving any right, title,
interest or claim of any kind they may have in or to any monies
held in the Trust Account, or (2) as to any claims for
indemnification by the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended
(the “Securities Act”). The Company will seek to reduce
the possibility that AZ Property Partners will have to indemnify
the Trust Account due to claims of creditors by endeavoring to have
all vendors, service providers, 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.
NASDAQ Notifications
On January 7, 2019, the Company received a notice from the
staff of the Listing Qualifications Department of Nasdaq (the
“Staff”) stating that the Company was no longer in
compliance with Nasdaq Listing Rule 5620(a) for continued listing
due to its failure to hold an annual meeting of stockholders within
twelve months of the end of the Company’s fiscal year ended
December 31, 2017. The Company submitted a plan of compliance
with Nasdaq and Nasdaq granted the Company an extension until
May 22, 2019 to regain compliance with the rule by holding an
annual meeting of stockholders. The Company held its annual meeting
of stockholders on May 21, 2019 and, accordingly, the Staff
determined that the Company was in compliance with Nasdaq Listing
Rule 5620(a) for continued listing and the matter was closed.
On August 9, 2019, the Company received a notice from the
Staff stating that the Company was no longer in compliance with
Nasdaq Listing Rule 5550(a)(3) for continued listing due to its
failure to maintain a minimum of 300 public holders (the
“Rule”). The Company had until September 23, 2019
to provide Nasdaq with a specific plan to achieve and sustain
compliance with the listing requirement. The notice is a
notification of deficiency, not of imminent delisting, and had no
current effect on the listing or trading of the Company’s
securities on Nasdaq.
On September 23, 2019 and October 28, 2019, the Company
submitted a plan to regain compliance with Nasdaq and requested an
extension through February 5, 2020. On October 28, 2019,
Nasdaq requested additional information regarding the
Company’s compliance plan, to which the Company responded on
November 8, 2019. On February 11, 2020, the Company
received a notice from the Staff stating that, based upon the
Company’s non-compliance
On March 25, 2020, the Company received formal notice from
Nasdaq indicating that the Staff had granted the Company’s
request for continued listing on Nasdaq. The decision followed the
Company’s hearing before the Panel, which took place on
March 19, 2020. The Company’s continued listing is
subject to the Company’s satisfaction of a number of
conditions, including, ultimately, completion of a Business
Combination with an operating company by no later than
August 10, 2020, and the combined entity’s compliance
with all applicable criteria for initial listing on Nasdaq at the
time of the merger. The Company failed to meet certain of the
conditions contained in the extension grant and has submitted a
modified extension request to the Staff.
On August 10, 2020, the Company submitted a letter to Nasdaq
indicating that it was in compliance with the Rule as of
July 31, 2020 and, as a result, satisfies the minimum 300
public holder requirement and all other applicable criteria for
continued listing on Nasdaq. Accordingly, the Company requested
that the Staff render a formal determination to continue the
listing of the Company’s securities. On August 11, 2020,
the Company received a formal notice from Nasdaq notifying the
Company that it regained compliance with the minimum 300 public
holder requirements under Nasdaq rules and that the Panel had
determined to continue the listing of the Company’s
securities on Nasdaq and close the matter.
On November 23, 2020, the Company received a notice from
Nasdaq stating that, as of November 20, 2020, the Company was
not in compliance with Listing Rule IM-5101-2
Liquidity
As of December 31, 2020, the Company had $466 in its operating
bank account, $5,967,947 in cash and marketable securities held in
the Trust Account to be used for a Business Combination or to
repurchase or convert stock in connection therewith and an adjusted
working capital deficit of $609,509, which excludes prepaid income
taxes of $51,642 and prepaid franchise taxes of $30,350, which have
been paid from amounts in the Trust Account. As of
December 31, 2020, approximately $138,764 of the amount on
deposit in the Trust Account represented interest income, which is
available to pay the Company’s tax obligations. To date, the
Company has withdrawn $716,788 of interest from the Trust Account
in order to pay the Company’s franchise and income taxes, of
which $161,430 was withdrawn during the year ended
December 31, 2020.
On November 17, 2018, the Company entered into an agreement
(the “Agreement”) with the Sponsor and BRAC, pursuant
to which the Sponsor agreed to be responsible for all liabilities
of the Company as of November 17, 2018 and to loan the Company
the funds necessary to pay the expenses of the Company other than
Business Combination expenses through the closing of a Business
Combination when and as needed. If a Business Combination is not
consummated, all outstanding loans made by the Sponsor will be
forgiven (see Note 7). In addition, BRAC agreed to loan the
Company all funds necessary to pay expenses incurred in connection
with and in order to consummate a business combination (the
“Business Combination Expenses”) and such loans will be
added to the Initial Notes (as defined in Note 7). If the Company
does not consummate a Business Combination, all outstanding loans
under the Notes will be forgiven, except to the extent of any funds
held outside of the Trust Account after paying all other fees and
expenses of the Company incurred prior to the date of such failure
to consummate a Business Combination (see Note 7).
The Company may raise additional capital through loans or
additional investments from the Sponsor or its stockholders,
officers, directors, or third parties. Other than as described
above, the Company’s officers and directors and the Sponsor
may, but are not obligated to, loan the Company funds, from time to
time, in whatever amount they deem reasonable in their sole
discretion, to meet the Company’s working capital needs.
The Company does not believe it will need to raise additional funds
in order to meet expenditures required for operating its business.
Neither the Sponsor, nor any of the stockholders, officers or
directors, or third parties are under any obligation to advance
funds to, or invest in, the Company, except as discussed above.
Accordingly, the Company may not be able to obtain additional
financing. If the Company is unable to raise additional capital, it
may be required to take additional measures to conserve liquidity,
which could include, but not necessarily be limited to suspending
the pursuit of a potential transaction. The Company cannot provide
any assurance that new financing will be available to it on
commercially acceptable terms, if at all. Even if the Company can
obtain sufficient financing or raise additional capital, it only
has until April 23, 2021 (or as may be extended) to consummate
a Business Combination. There is no assurance that the Company will
be able to do so prior to April 23, 2021, or as may be
extended by shareholder vote.
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 |
