Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 08, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Big Rock Partners Acquisition Corp. | |
Entity Central Index Key | 0001719406 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,915,728 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 1,394 | $ 11,079 |
Prepaid expenses and other current assets | 39,883 | 19,114 |
Total current assets | 41,277 | 30,193 |
Cash and marketable securities held in Trust Account | 50,061,450 | 70,765,966 |
Total assets | 50,102,727 | 70,796,159 |
Current Lliabilities | ||
Accounts payable and accrued expenses | 432,448 | 551,099 |
Income taxes payable | 88,703 | 16,311 |
Total current liabilities | 521,151 | 567,410 |
Promissory note - related party | 206,865 | 0 |
Promissory notes payable | 1,380,000 | 690,000 |
Total liabilities | 2,108,016 | 1,257,410 |
Commitments and contingencies (Note 5) | ||
Common stock subject to possible redemption, 4,114,378 and 6,310,461 shares at redemption value as of June 30, 2019 and December 31, 2018, respectively | 42,994,703 | 64,538,743 |
Stockholders' Equity | ||
Preferred stock, $0.001 par value; 1,000,000 authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 shares authorized; 2,801,350 and 2,725,039 shares issued and outstanding (excluding 4,114,378 and 6,310,461 shares subject to possible redemption) as of June 30, 2019 and December 31, 2018, respectively | 2,801 | 2,725 |
Additional paid-in capital | 4,672,153 | 5,036,213 |
Retained earnings/(accumulated deficit) | 325,054 | (38,932) |
Total stockholders' equity | 5,000,008 | 5,000,006 |
Total liabilities and stockholders' equity | $ 50,102,727 | $ 70,796,159 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock subject to possible redemption | 4,114,378 | 6,310,461 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 2,801,350 | 2,725,039 |
Common stock, outstanding | 2,801,350 | 2,725,039 |
Common stock, subject to possible redemption | 4,114,378 | 6,310,461 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Operating expenses | $ 175,742 | $ 271,810 | $ 338,923 | $ 464,184 |
Loss from operations | (175,742) | (271,810) | (338,923) | (464,184) |
Other Income: | ||||
Interest income | 392,439 | 272,482 | 775,301 | 486,051 |
Unrealized gain on marketable securities held in Trust Account | 0 | 1,674 | 0 | 75 |
Other income, net | 392,439 | 274,156 | 775,301 | 486,126 |
Income before provision for income taxes | 216,697 | 2,346 | 436,378 | 21,942 |
Provision for income taxes | (40,676) | (8,948) | (72,392) | (13,063) |
Net income (loss) | $ 176,021 | $ (6,602) | $ 363,986 | $ 8,879 |
Weighted average shares outstanding, basic and diluted | 2,794,297 | 2,605,782 | 2,759,859 | 2,598,424 |
Basic and diluted net loss per common share | $ (0.03) | $ (0.06) | $ (0.06) | $ (0.13) |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings/(Accumulated Deficit) | Total |
Beginning balance, shares at Dec. 31, 2017 | 2,590,985 | |||
Beginning balance, amount at Dec. 31, 2017 | $ 2,591 | $ 5,102,443 | $ (105,033) | $ 5,000,001 |
Change in value of common stock subject to possible redemption, shares | 14,797 | |||
Change in value of common stock subject to possible redemption, amount | $ 15 | (15,492) | (15,477) | |
Net income | 15,481 | 15,481 | ||
Ending balance, shares at Mar. 31, 2018 | 2,605,782 | |||
Ending balance, amount at Mar. 31, 2018 | $ 2,606 | 5,086,951 | (89,552) | 5,000,005 |
Beginning balance, shares at Dec. 31, 2017 | 2,590,985 | |||
Beginning balance, amount at Dec. 31, 2017 | $ 2,591 | 5,102,443 | (105,033) | 5,000,001 |
Change in value of common stock subject to possible redemption, amount | (8,871) | |||
Net income | 8,879 | |||
Ending balance, shares at Jun. 30, 2018 | 2,622,584 | |||
Ending balance, amount at Jun. 30, 2018 | $ 2,623 | 5,093,540 | (96,154) | 5,000,009 |
Beginning balance, shares at Mar. 31, 2018 | 2,605,782 | |||
Beginning balance, amount at Mar. 31, 2018 | $ 2,606 | 5,086,951 | (89,552) | 5,000,005 |
Change in value of common stock subject to possible redemption, shares | 16,802 | |||
Change in value of common stock subject to possible redemption, amount | $ 17 | 6,589 | 6,606 | |
Net income | (6,602) | (6,602) | ||
Ending balance, shares at Jun. 30, 2018 | 2,622,584 | |||
Ending balance, amount at Jun. 30, 2018 | $ 2,623 | 5,093,540 | (96,154) | 5,000,009 |
Beginning balance, shares at Dec. 31, 2018 | 2,725,039 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 2,725 | 5,036,213 | (38,932) | 5,000,006 |
Change in value of common stock subject to possible redemption, shares | 69,258 | |||
Change in value of common stock subject to possible redemption, amount | $ 69 | (188,035) | (187,966) | |
Net income | 187,965 | 187,965 | ||
Ending balance, shares at Mar. 31, 2019 | 2,794,297 | |||
Ending balance, amount at Mar. 31, 2019 | $ 2,794 | 4,848,178 | 149,033 | 5,000,005 |
Beginning balance, shares at Dec. 31, 2018 | 2,725,039 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 2,725 | 5,036,213 | (38,932) | 5,000,006 |
Change in value of common stock subject to possible redemption, amount | (555,193) | |||
Net income | 363,986 | |||
Ending balance, shares at Jun. 30, 2019 | 2,801,350 | |||
Ending balance, amount at Jun. 30, 2019 | $ 2,801 | 4,672,153 | 325,054 | 5,000,008 |
Beginning balance, shares at Mar. 31, 2019 | 2,794,297 | |||
Beginning balance, amount at Mar. 31, 2019 | $ 2,794 | 4,848,178 | 149,033 | 5,000,005 |
Change in value of common stock subject to possible redemption, shares | 7,053 | |||
Change in value of common stock subject to possible redemption, amount | $ 7 | (367,234) | (367,227) | |
Capital contribution to Trust Account to extend the date by which the Company is required to consummate a Business Combination | 191,209 | 191,209 | ||
Net income | 176,021 | 176,021 | ||
Ending balance, shares at Jun. 30, 2019 | 2,801,350 | |||
Ending balance, amount at Jun. 30, 2019 | $ 2,801 | $ 4,672,153 | $ 325,054 | $ 5,000,008 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities: | ||
Net income | $ 363,986 | $ 8,879 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Interest earned on cash and marketable securities held in Trust Account | (775,301) | (486,051) |
Unrealized loss on marketable securities held in Trust Account | 0 | (75) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (20,769) | 10,569 |
Accounts payable and accrued expenses | (118,651) | 118,715 |
Income taxes payable | 72,392 | 13,063 |
Net cash used in operating activities | (478,343) | (334,900) |
Cash Flows from Investing Activities: | ||
Cash withdrawn from Trust Account | 22,099,233 | 0 |
Investment of cash in Trust Account | (690,000) | 0 |
Cash withdrawn from Trust Account to pay franchise taxes | 261,793 | 32,639 |
Net cash provided by investing activities | 21,671,026 | 32,639 |
Cash Flows from Financing Activities: | ||
Proceeds from promissory notes | 690,000 | 0 |
Proceeds from promissory note - related party | 271,865 | 0 |
Repayment of promissory note - related party | (65,000) | 0 |
Redemption of common stock | (22,099,233) | 0 |
Payment of offering costs | 0 | (7,500) |
Net cash used in financing activities | (21,202,368) | (7,500) |
Net change in cash | (9,685) | (309,761) |
Cash - beginning | 11,079 | 449,374 |
Cash - ending | 1,394 | 139,613 |
Non-cash investing and financing activities: | ||
Change in value of common stock subject to possible redemption | 555,193 | 8,871 |
Capital contribution to Trust Account | $ 191,209 | $ 0 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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”). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company is focusing on businesses in the senior housing and care industry in the United States. All activity through June 30, 2019 relates to the Company’s formation, the initial public offering (the “Initial Public Offering”) of 6,900,000 units (the “Units”) that occurred on November 22, 2017, the simultaneous sale of 272,500 units (the “Private Placement Units”) in a private placement to Big Rock Partners Sponsor, LLC (the “Sponsor”), and the Company’s search for a target business with which to complete a Business Combination. The Company initially had until November 22, 2018 to complete a Business Combination. However, if the Company anticipated that it could not 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 (for a total of up to 18 months to complete a Business Combination) (the “Combination Period”). 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 were required to 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 extended 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. The deposit was funded by a non-interest bearing unsecured promissory note from BRAC Lending Group LLC, an affiliate of the underwriter (the “Investor”)(see Note 4). The note is repayable upon the consummation of a Business Combination (see Note 4). 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. 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 is required to consummate a Business Combination to August 22, 2019 (the “Extended Date”). 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 extension period utilized through the Extended Date. Through June 30, 2019, the Company deposited an aggregate of $191,209 into the Trust Account, which was contributed to the Trust Account by a third party and is not required to be repaid by the Company. Accordingly, the Company has recorded this amount as a credit to additional paid in capital in the accompanying condensed statements of stockholders’ equity. In July 2019, the Company deposited an additional $95,605 into the Trust Account for the third, and final, 30-day extension period. The Company now has until August 22, 2019 to consummate a Business Combination (see Note 7). In order to pay for part of the third extension payment, the Company issued an unsecured promissory note (the “Note”) in favor of the Investor, in the original principal amount of $6,814. The Note does not bear interest and matures upon closing of a Business Combination by the Company. If the Company fails to consummate a Business Combination, the outstanding debt under the Note will be forgiven, except to the extent of any funds held outside of the Company's Trust Account after paying all other fees and expenses of the Company. The Company has scheduled a special meeting of stockholders for August 21, 2019, pursuant to which it will seek stockholder approval to, among other matters, amend 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 from August 22, 2019 to November 22, 2019. There is no assurance that the Company’s stockholders will vote to approve the extension of time with which the Company has to complete a Business Combination. If the Company does not obtain stockholder approval, the Company would wind up its affairs and liquidate (see Note 7). NASDAQ Notification 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 is currently 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 Company has 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 has no current effect on the listing or trading of the Company's securities on Nasdaq. The Company intends to submit a plan to regain compliance within the required timeframe. If Nasdaq accepts the Company's plan, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the notice to evidence compliance with the Rule. If Nasdaq does not accept the Company's plan, the Company will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel. |
LIQUIDITY
LIQUIDITY | 6 Months Ended |
Jun. 30, 2019 | |
Liquidity | |
LIQUIDITY | As of June 30, 2019, the Company had $1,394 in its operating bank account, $50,061,450 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 a working capital deficit of $371,171, which excludes franchise and income taxes payable of $108,703, of which such amounts will be paid from interest earned on the Trust Account. As of June 30, 2019, approximately $1,112,000 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 approximately $304,000 of interest from the Trust Account in order to pay the Company’s taxes, of which approximately $262,000 was withdrawn during the six months ended June 30, 2019. On November 17, 2018, the Company entered into an agreement (the “Agreement”) with the Sponsor and the Investor, 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 4). In addition, the Investor 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 Notes (as defined in Note 4). 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 4). 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 August 22, 2019 (or November 22, 2019, if the extension amendment is approved) to consummate a Business Combination. There is no assurance that the Company will be able to do so prior to August 22, 2019 (or November 22, 2019, if the extension amendment is approved). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
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 Securities and Exchange Commission (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 comprehensive 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 Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on March 15, 2019, which contains the audited financial statements and notes thereto. The interim results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods. Use of estimates The preparation of condensed 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 condensed 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 confirming events. Accordingly, the actual results could differ significantly from the Company’s estimates. Cash and marketable securities held in Trust Account At June 30, 2019 and December 31, 2018, the assets held in the Trust Account were held in money market funds. During the six months ended June 30, 2019, the Company withdrew $261,793 of interest income to pay its franchise tax obligations. Net loss per common share Net loss per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at June 30, 2019 and December 31, 2018, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of (1) warrants sold in the Initial Public Offering and private placement to purchase 3,586,250 shares of common stock, (2) rights sold in the Initial Public Offering and private placement that convert into 717,250 shares of common stock and (3) 600,000 shares of common stock, warrants to purchase 300,000 shares of common stock and rights that convert into 60,000 shares of common stock in the unit purchase option sold to the underwriter, in the calculation of diluted loss per share, since the exercise of the warrants, the conversion of the rights into shares of common stock and the exercise of the unit purchase option are contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic income per common share for the periods presented. Reconciliation of net loss per common share The Company’s net income (loss) is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per share is calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) $ 176,021 $ (6,602 ) $ 363,986 $ 8,879 Less: Income attributable to common stock subject to possible redemption (259,727 ) (158,321 ) (518,924 ) (355,325 ) Adjusted net loss $ (83,706 ) $ (164,923 ) $ (154,938 ) $ (346,446 ) Weighted average shares outstanding, basic and diluted 2,794,297 2,605,782 2,759,859 2,598,424 Basic and diluted net loss per common share $ (0.03 ) $ (0.06 ) $ (0.06 ) $ (0.13 ) |
INVESTOR AGREEMENT AND PROMISSO
INVESTOR AGREEMENT AND PROMISSORY NOTES | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
INVESTOR AGREEMENT AND PROMISSORY NOTES | On November 17, 2018, the Company entered into an Agreement with the Sponsor and the Investor. Pursuant to the Agreement, the Sponsor transferred an aggregate of 1,500,000 Founders Shares (as defined in Note 5) to the Investor in exchange for the agreements set forth below and aggregate cash consideration of $1.00. Pursuant to the Agreement, the Sponsor agreed to extend the period of time the Company has to consummate a Business Combination up to two times for an aggregate of up to six months and the Investor agreed to loan the Company the funds necessary to obtain the extensions (the Extensions”). On November 20, 2018 and February 21, 2019, the Company issued unsecured promissory notes (the “Notes”) in favor of the Investor, in the original principal amount of $690,000 each (or an aggregate of $1,380,000), to provide the Company the funds necessary to obtain an aggregate of six-month Extensions. Pursuant to the Agreement, the Investor has also 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 Notes. 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. As of June 30, 2019, the outstanding balance under the Notes amounted to an aggregate of $1,380,000. The Sponsor has agreed to be responsible for all liabilities of the Company as of November 17, 2018, except for liabilities associated with the possible redemption of shares by the Company’s shareholders, as described in the Company’s Amended and Restated Certificate of Incorporation. The Sponsor has also agreed to loan the Company the funds necessary to pay the expenses of the Company other than the Business Combination Expenses through the closing of a Business Combination when and as needed in order for the Company to continue in operation (the “Non-Business Combination Related Expenses”). Upon consummation of a Business Combination, up to $200,000 of the Non-Business Combination Related Expenses will be repaid by the Company to the Sponsor provided that the Company has funds available to it sufficient to repay such expenses (the “Cap”) as well as to pay for all stockholder redemptions, all Business Combination Expenses, repayment of the Notes, and any funds necessary for the working capital requirements of the Company following closing of the Business Combination. Any remaining amounts in excess of the Cap will be forgiven. If the Company does not consummate a Business Combination, all outstanding loans made by the Sponsor to cover the Non-Business Combination Related Expenses will be forgiven. At June 30, 2019, the outstanding balance under this loan amounted to $206,865. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Registration Rights Pursuant to a registration rights agreement entered into on November 20, 2017, the holders of the Company’s common stock prior to the Initial Public Offering (the “Founder Shares”), Private Placement Units (and their underlying securities), the shares issued to EarlyBirdCapital, Inc. (“EarlyBirdCapital”) at the closing of the Initial Public Offering (the “Representative Shares”) and any Units that may be issued upon conversion of the working capital loans (and their underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. The holders of the majority of the Founder’s Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Placement Units or Units issued to the Sponsor, officers, directors or their affiliates in payment of working capital loans made to the Company (in each case, including the underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders will 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 of 1933, as amended (the “Securities Act”). Notwithstanding anything to the contrary, EarlyBirdCapital and its designees may participate in a “piggy-back” registration during the seven year period beginning on the effective date of the registration statement. However, the registration rights agreement will provide that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company has engaged EarlyBirdCapital as an advisor in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss a potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing securities, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with a Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation of a Business Combination in an amount equal to 4.0% of the gross proceeds of the Initial Public Offering (exclusive of any applicable finders’ fees which might become payable). If a Business Combination is not consummated for any reason, no fee will be due or payable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity | |
STOCKHOLDERS' EQUITY | Preferred Stock Common Stock |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed financial statements were issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements. In July 2019, the Company deposited $95,605 into the Trust Account for the third, and final, 30-day extension period. The Company now has until August 22, 2019 to consummate a Business Combination. In order to pay for part of the third extension payment, the Company issued an unsecured promissory note (the “Promissory Note”) in favor of the Investor, in the original principal amount of $6,814. The Note does not bear interest and matures upon closing of a Business Combination by the Company. If the Company fails to consummate a Business Combination, the outstanding debt under the Note will be forgiven, except to the extent of any funds held outside of the Company's Trust Account after paying all other fees and expenses of the Company. The Company has scheduled a special meeting of stockholders for August 21, 2019, pursuant to which it will seek stockholder approval to, among other matters, amend 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 from August 22, 2019 to November 22, 2019. There is no assurance that the Company’s stockholders will vote to approve the extension of time with which the Company has to complete a Business Combination. If the Company does not obtain stockholder approval, the Company would wind up its affairs and liquidate. 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 Company has 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 has no current effect on the listing or trading of the Company's securities on Nasdaq. The Company intends to submit a plan to regain compliance within the required timeframe. If Nasdaq accepts the Company's plan, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the notice to evidence compliance with the Rule. If Nasdaq does not accept the Company's plan, the Company will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
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 Securities and Exchange Commission (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 comprehensive 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 Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on March 15, 2019, which contains the audited financial statements and notes thereto. The interim results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods. |
Use of estimates | The preparation of condensed 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 condensed 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 confirming events. Accordingly, the actual results could differ significantly from the Company’s estimates. |
Cash and marketable securities held in Trust Account | At June 30, 2019 and December 31, 2018, the assets held in the Trust Account were held in money market funds. During the six months ended June 30, 2019, the Company withdrew $261,793 of interest income to pay its franchise tax obligations. |
Net loss per common share | Net loss per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at June 30, 2019 and December 31, 2018, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of (1) warrants sold in the Initial Public Offering and private placement to purchase 3,586,250 shares of common stock, (2) rights sold in the Initial Public Offering and private placement that convert into 717,250 shares of common stock and (3) 600,000 shares of common stock, warrants to purchase 300,000 shares of common stock and rights that convert into 60,000 shares of common stock in the unit purchase option sold to the underwriter, in the calculation of diluted loss per share, since the exercise of the warrants, the conversion of the rights into shares of common stock and the exercise of the unit purchase option are contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic income per common share for the periods presented. |
Reconciliation of net loss per common share | The Company’s net income (loss) is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per share is calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) $ 176,021 $ (6,602 ) $ 363,986 $ 8,879 Less: Income attributable to common stock subject to possible redemption (259,727 ) (158,321 ) (518,924 ) (355,325 ) Adjusted net loss $ (83,706 ) $ (164,923 ) $ (154,938 ) $ (346,446 ) Weighted average shares outstanding, basic and diluted 2,794,297 2,605,782 2,759,859 2,598,424 Basic and diluted net loss per common share $ (0.03 ) $ (0.06 ) $ (0.06 ) $ (0.13 ) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Reconciliation of net loss per common share | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) $ 176,021 $ (6,602 ) $ 363,986 $ 8,879 Less: Income attributable to common stock subject to possible redemption (259,727 ) (158,321 ) (518,924 ) (355,325 ) Adjusted net loss $ (83,706 ) $ (164,923 ) $ (154,938 ) $ (346,446 ) Weighted average shares outstanding, basic and diluted 2,794,297 2,605,782 2,759,859 2,598,424 Basic and diluted net loss per common share $ (0.03 ) $ (0.06 ) $ (0.06 ) $ (0.13 ) |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details Narrative) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
State of incorporation | Delaware |
Date of incorporation | Sep. 18, 2017 |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Liquidity | ||||
Cash | $ 1,394 | $ 11,079 | $ 139,613 | $ 449,374 |
Marketable securities held in Trust Account | $ 50,061,450 | $ 70,765,966 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||||||
Net income | $ 176,021 | $ 187,965 | $ (6,602) | $ 15,481 | $ 363,986 | $ 8,879 |
Less: income attributable to common stock subject to possible redemption | (259,727) | (158,321) | (518,924) | (355,325) | ||
Adjusted net loss | $ (83,706) | $ (164,923) | $ (154,938) | $ (346,446) | ||
Weighted average shares outstanding, basic and diluted | 2,794,297 | 2,605,782 | 2,759,859 | 2,598,424 | ||
Basic and diluted net loss per common share | $ (0.03) | $ (0.06) | $ (0.06) | $ (0.13) |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||
Cash withdrawn from Trust Account | $ 261,793 | $ 32,639 |
INVESTOR AGREEMENT AND PROMIS_2
INVESTOR AGREEMENT AND PROMISSORY NOTES (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Promissory note payable | $ 1,380,000 | $ 690,000 |
Promissory Note 1 | ||
Promissory note payable | 1,380,000 | |
Promissory Note 2 | ||
Promissory note payable | $ 206,865 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Stockholders' Equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 2,801,350 | 2,725,039 |
Common stock, outstanding | 2,801,350 | 2,725,039 |
Common stock, subject to possible redemption | 4,114,378 | 6,310,461 |