| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of presentation The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions
to Form 10-Q and Article 8 of Regulation S-X of the 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 period from February 23, 2018 (inception) through June 30, 2018 as filed with the SEC on September 18, 2018,
which contains the audited financial statements and notes thereto. The interim results for the three months ended September 30,
2018 are not necessarily indicative of the results to be expected for the year ending June 30, 2019 or for any future interim
periods. Emerging
growth company The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart
Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to,
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not
previously approved. Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and
it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the
new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used. Use
of estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of 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 our estimates. Cash
and cash equivalents The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of September 30, 2018 and June 30, 2018. Marketable
securities held in Trust Account At
September 30, 2018, the assets held in the Trust Account were substantially held in U. S. Treasury Bills. Ordinary
shares subject to possible redemption The
Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory
redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including
ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon
the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other
times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption
rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, at September 30, 2018, ordinary shares subject to possible redemption are presented at redemption value as temporary
equity, outside of the shareholders’ equity section of the Company’s balance sheet. Income
taxes The
Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an
asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities
are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future
taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized. ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined that the British Virgin Islands
is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax
benefits, if any, as income tax expense. There were no unrecognized tax benefits as of September 30, 2018 and no amounts accrued
for interest and penalties. 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 may be subject to potential examination by U.S. federal, U.S. states or foreign taxing authorities in the area of income
taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various
tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. The
Company’s tax provision is zero because the Company is organized in the British Virgin Islands with no connection to any
other taxable jurisdiction. As such, the Company has no deferred tax assets. The Company is considered to be an exempted British
Virgin Islands Company, and is presently not subject to income taxes or income tax filing requirements in the British Virgin Islands
or the United States. Net
loss per ordinary share Net
loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during
the period. The Company applies the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption
at September 30, 2018, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation
of basic 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
7,875,000 ordinary shares, (2) rights sold in the Initial Public Offering that convert into 550,000 ordinary shares and (3) 250,000
ordinary shares, warrants to purchase 250,000 ordinary shares and rights that convert into 25,000 ordinary shares 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 ordinary shares and the exercise of the unit purchase option is contingent upon the occurrence of
future events. As a result, diluted loss per share is the same as basic loss per share for the period presented. Reconciliation
of net loss per ordinary share The
Company’s net income is adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption,
as these shares only participate in the income of the Trust Account and not the losses of the Company. Accordingly, basic and
diluted loss per ordinary share is calculated as follows:
Three
Months Ended September 30, 2018
Net income $ 161,113
Less: Income
attributable to ordinary shares subject to possible redemption (249,052 )
Adjusted net loss (87,939 )
Weighted average shares outstanding,
basic and diluted 1,897,285
Basic and diluted
net loss per ordinary share $ (0.05 ) Concentration
of credit risk Financial
instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution
which, at times may exceed the federal depository insurance coverage of $250,000. At September 30, 2018, the Company had not experienced
losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Fair
value of financial instruments The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying financial statements,
primarily due to their short-term nature. Recently
issued accounting standards 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. |
