IPO and Financing - The company completed its initial public offering on June 26, 2020, raising gross proceeds of $40 million from the sale of 4,000,000 units at $10.00 per unit[27]. - A private placement of 240,000 units was simultaneously completed, generating an additional $2.4 million in gross proceeds[28]. - The total net proceeds held in the trust account reached $46 million after subsequent sales of additional units[29]. - The company intends to utilize cash from its IPO and private placement, along with potential new debt, for its initial business combination[35]. - The company plans to use substantially all funds in the Trust Account for completing a Business Combination and financing operations of the target business[137]. - The company may borrow up to $1,500,000 in loans convertible into additional private units at $10.00 per unit upon consummation of the business combination[204]. Business Strategy and Target Acquisition - The company primarily targets middle-market growth businesses with a total enterprise value between $200 million and $300 million[24]. - The management team aims to leverage its operational experience across various sectors, including biopharmaceuticals and information technology, to identify acquisition opportunities[22]. - The company seeks to acquire businesses with significant revenue and earnings growth potential through new product development and increased production capacity[26]. - The merger agreement with Nukkleus Inc. would result in former Nukkleus stockholders owning approximately 66% of the post-business combination company[33]. - The company intends to acquire 100% of the equity interest or assets of the target business, but may acquire less than 100% if it becomes the majority shareholder[49]. Business Combination and Redemption - The company has extended its deadline to consummate its initial business combination multiple times, with the latest extension allowing until March 23, 2022[32]. - The company has extended the deadline to consummate its initial business combination to July 23, 2022, with a total of $2,014,594 deposited into the trust account[57]. - The fair market value of the target business must be at least 80% of the value of the trust account at the time of the agreement[48]. - The company will provide public shareholders with the opportunity to redeem shares at a per-share price equal to the aggregate amount in the trust account[58]. - The company must maintain net tangible assets of at least $5,000,001 immediately prior to or upon the consummation of the initial business combination[61]. - The company may not proceed with the redemption of public shares if it cannot satisfy the net tangible asset requirement[65]. - The company will conduct redemptions either in connection with a shareholder meeting or by means of a tender offer[59]. - Initial shareholders have agreed to waive their redemption rights with respect to their shares in connection with the business combination[62]. - Following shareholder redemptions, approximately $41.5 million remains in the trust account, with a pro rata portion of approximately $10.46 per public share[80]. - If the initial business combination is not completed, public shareholders who elected to redeem their shares will not be entitled to redeem for the pro rata share of the trust account[76]. - The company may enter voluntary liquidation if the initial business combination is not consummated by the deadline[85]. - The redemption amount per share upon dissolution is approximately $10.46, but may be subject to claims from creditors[91]. Financial Performance - For the year ended December 31, 2021, the company reported a net loss of $599,127, which included operating costs of $670,916 and interest income of $4,634 from marketable securities[129]. - The company had a net loss of $317,737 for the year ended December 31, 2020, with operating costs of $148,010[130]. - Cash used in operating activities for the year ended December 31, 2021, was $430,914, with cash provided by financing activities amounting to $1,381,500[135]. - The company incurred $2,069,154 in transaction costs related to the Initial Public Offering, including $1,610,000 in underwriting fees[134]. - As of December 31, 2021, the company had cash and marketable securities held in the Trust Account totaling $47,387,687, which will be used to complete a Business Combination[137]. - As of December 31, 2021, the company had $282,903 of cash held in its operating bank account, intended for identifying and evaluating target businesses[138]. - The company has no long-term debt or off-balance sheet financing arrangements as of December 31, 2021[141]. Governance and Compliance - The board of directors consists of four members, including Dr. Peng Jiang as Chairman and CEO, and has a two-class structure with staggered terms[173]. - The audit committee is composed of independent directors, with Mr. Zan Wu serving as chairman, ensuring compliance with Nasdaq listing standards[177]. - The compensation committee, chaired by Mr. Yebo Shen, is responsible for reviewing and approving executive compensation and corporate goals[182]. - The company has adopted a code of conduct and ethics applicable to all directors, officers, and employees[185]. - The company must comply with the Sarbanes-Oxley Act regarding internal control evaluations for the fiscal year ending December 31, 2021[107]. - Management identified a material weakness in internal control over financial reporting related to the accounting for complex financial instruments[159]. - The company has not made any changes to its internal control over financial reporting that materially affect its operations during the most recent fiscal quarter[162]. - A majority of the board must be composed of independent directors, as required by the Nasdaq Capital Market, to maintain the integrity of independent judgment[215]. - The company has established measures to minimize conflicts of interest, including obtaining an independent investment banking opinion for business combinations with affiliated entities[214]. Shareholder Information - Nisun Investment Holding Limited holds 1,265,001 shares, representing 20.7% of the outstanding common stock[192]. - Karpus Investment Management owns 394,114 shares, accounting for 6.45% of the outstanding common stock[192]. - Mizuho Financial Group, Inc. has 459,116 shares, which is 7.51% of the outstanding common stock[192]. - Hudson Bay Capital Management LP holds 395,450 shares, representing 6.47% of the outstanding common stock[192]. - Feis Equities LLC owns 584,332 shares, accounting for 9.56% of the outstanding common stock[192]. - The company issued an aggregate of 1,150,000 founder shares for approximately $0.022 per ordinary share[194]. - The company has a promissory note with a principal amount of $300,000, of which $243,833 was outstanding as of June 26, 2020[199]. - An unsecured promissory note was issued for $460,000, with the full amount outstanding as of December 31, 2021[200]. - Related party transactions exceeding $120,000 require approval from the audit committee and independent directors[209]. Audit and Fees - Audit fees for the year ended December 31, 2021, totaled $47,380, an increase from $19,189 in 2020, reflecting a significant rise in professional services rendered[218]. - Audit fees charged by Marcum BP for the year ended December 31, 2021, amounted to $30,900, compared to $41,200 in 2020, indicating a decrease in fees for that period[219]. - The audit committee is responsible for overseeing the appointment and work of independent auditors, ensuring their independence and compliance with regulations[179]. - The company has independent directors who hold regular meetings to ensure that affiliated transactions are conducted on terms no less favorable than those available from independent parties[216].
Nukkleus(NUKK) - 2021 Q4 - Annual Report