AvePoint(AVPT) - 2019 Q4 - Annual Report

PART I Business The company is a blank check company targeting software and internet technology businesses for acquisition Acquisition Strategy and Criteria | Criteria | Target Specification | | :--- | :--- | | Enterprise Value | Between $650 million and $2 billion | | Industry Focus | Software and internet technology sectors | | NASDAQ Rule | Business combination must have an aggregate fair market value of at least 80% of the assets held in the trust account | Financial Position for Business Combination | Metric | Value (as of Dec 31, 2019) | | :--- | :--- | | Funds in Trust Account | $338,659,163 | | Deferred Underwriting Fees | $13,150,000 | - The company is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, or similar business combination, with a focus on the software and internet technology industries[10] - The company has until September 19, 2021, to complete its initial business combination, otherwise it will cease operations and liquidate[73] - Public stockholders are provided with redemption rights, allowing them to redeem their Class A common stock for approximately $10.04 per share upon completion of the initial business combination[56] Risk Factors The company faces significant risks from its lack of operating history, the potential failure to complete a business combination, and the impact of COVID-19 - The company is an early-stage entity with no operating history, making it difficult for investors to evaluate its ability to achieve its business objective[99][100] - The company may not complete its initial business combination by the September 19, 2021 deadline, which would force liquidation and render public warrants worthless[122][123] - The COVID-19 outbreak poses a significant risk, potentially affecting the search for a business combination and the financial health of any potential target business[110][111][112] - A large number of public stockholders exercising their redemption rights could make the company's financial condition unattractive to targets or prevent deal completion[114][116] - Conflicts of interest may arise as the sponsor, officers, and directors will lose their entire investment if a business combination is not completed[218][219] - The company's securities may be delisted from NASDAQ if it fails to meet continued listing requirements, which would limit liquidity[133][134][135] Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[281] Properties The company does not own real estate and utilizes office space provided by its sponsor for a monthly fee - The company does not own any real estate or other material physical properties[282] - The company's principal executive office space is provided by its sponsor as part of a $15,000 monthly administrative support agreement[282] Legal Proceedings The company is not currently involved in any litigation - To the knowledge of management, there is no current litigation pending against the company[283] Mine Safety Disclosures This section is not applicable to the company's business operations - Not applicable[283] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units, common stock, and warrants trade on the Nasdaq Capital Market Trading Information | Security | Trading Symbol | Exchange | | :--- | :--- | :--- | | Units | APXTU | Nasdaq Capital Market | | Class A Common Stock | APXT | Nasdaq Capital Market | | Warrants | APXTW | Nasdaq Capital Market | - As of March 27, 2020, there were three holders of record for units, one for Class A common stock, one for Class B common stock, and one for warrants[286] Selected Financial Data This item is not required for the company - Not required[286] Management's Discussion and Analysis of Financial Condition and Results of Operations The company has no operations, with net income of $900,810 for 2019 derived solely from interest on funds held in trust Results of Operations (April 5, 2019 - Dec 31, 2019) | Metric | Amount ($) | | :--- | :--- | | Net Income | 900,810 | | Interest Income (Trust Account) | 1,809,163 | | Operating Costs | (295,109) | | Franchise Taxes | (295,342) | | Provision for Income Taxes | (317,902) | Liquidity and Capital Resources (as of Dec 31, 2019) | Item | Amount ($) | | :--- | :--- | | Cash held outside Trust Account | 994,810 | | Initial Public Offering Gross Proceeds | 350,000,000 | | Placement Units Gross Proceeds | 8,100,000 | | Amount placed in Trust Account | 350,000,000 | - The company is a blank check company with no operations or revenues to date, with activities limited to organizational matters[289][295] - The company has an agreement to pay an affiliate of its sponsor a monthly fee of $15,000 for administrative support and has a deferred underwriting fee of $13,150,000[307][308] Quantitative and Qualitative Disclosures About Market Risk The company has no material market or interest rate risk as funds are held in short-term U.S. government treasury securities - The company is not subject to any material market or interest rate risk as of December 31, 2019[312] - Proceeds from the IPO held in the trust account are invested in short-term U.S. government treasury securities, minimizing interest rate risk exposure[312] Financial Statements and Supplementary Data This section contains the company's audited financial statements for the period ending December 31, 2019 - This section includes the company's audited financial statements and supplementary data, which appear following Item 15 of the report[313] Financial Statements The audited financial statements show total assets of $353.0 million and net income of $900,810 for the period Balance Sheet Summary (as of December 31, 2019) | Account | Amount ($) | | :--- | :--- | | Assets | | | Cash and marketable securities held in Trust Account | 351,809,163 | | Total Assets | 352,987,612 | | Liabilities & Equity | | | Deferred underwriting commissions | 13,150,000 | | Total Liabilities | 13,768,244 | | Class A common stock subject to possible redemption | 334,219,360 | | Total Stockholders' Equity | 5,000,008 | Statement of Operations Summary (April 5, 2019 - Dec 31, 2019) | Account | Amount ($) | | :--- | :--- | | Loss from operations | (590,451) | | Interest earned on Trust Account | 1,809,163 | | Net income | 900,810 | - The independent auditor, WithumSmith+Brown, PC, issued an unqualified opinion on the financial statements[391] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of year-end 2019 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[313] - A report on internal control over financial reporting is not included, as permitted for newly public companies[315] - There were no material changes in internal control over financial reporting during the most recent fiscal quarter[315] Other Information The company reports no other information under this item - None[316] PART III Directors, Executive Officers and Corporate Governance The company is led by experienced executives from Bessemer Venture Partners and Goldman Sachs, with a majority-independent board Key Management and Directors | Name | Position | | :--- | :--- | | Jeff Epstein | Co-Chief Executive Officer, Chief Financial Officer | | Brad Koenig | Co-Chief Executive Officer and Director | | David Chao | Director (Independent) | | Peter Bell | Director (Independent) | | Donna Wells | Director (Independent) | - The board of directors is divided into three classes, creating a staggered board structure[327] - The board has determined that a majority of its directors are independent under NASDAQ listing standards[329] - The company has established an Audit Committee and a Compensation Committee, both comprised of independent directors[334][335][337] Executive Compensation No officers receive cash compensation, but an affiliate of the sponsor is paid a monthly fee for administrative support - No officers or directors have received any cash compensation for services rendered[347] - An affiliate of the sponsor is paid $15,000 per month for office space, utilities, and administrative support[347] - Officers and directors are reimbursed for out-of-pocket expenses incurred on behalf of the company[347] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The sponsor holds all Class B founder shares, while several institutional investors hold significant stakes in the Class A common stock Beneficial Owners of More Than 5% of Class A Common Stock | Owner | Shares Owned | % of Class | | :--- | :--- | :--- | | HCG Investment Management Inc | 2,740,000 | 7.65% | | Siu Min Wong | 2,588,432 | 7.23% | | UBS O'Connor LLC | 2,500,000 | 6.98% | | Polar Asset Management Partners Inc | 1,973,660 | 5.51% | | MMCAP International Inc. SPC | 1,800,000 | 5.03% | - Apex Technology Sponsor LLC is the beneficial owner of 8,750,000 shares of Class B common stock (100% of the class) and 657,500 shares of Class A common stock (1.84% of the class)[353] - All executive officers and directors as a group beneficially own 100% of the Class B common stock through their interests in the sponsor[353] Certain Relationships and Related Transactions, and Director Independence The company has multiple related-party transactions with its sponsor, including the purchase of founder shares and a monthly administrative fee - The sponsor purchased 8,750,000 founder shares (Class B stock) for an aggregate price of $25,000[363] - Simultaneously with the IPO, the sponsor and Cantor purchased 810,000 placement units at $10.00 per unit for an aggregate of $8.1 million[364] - The company pays an affiliate of the sponsor $15,000 per month for office space and administrative support[365] - The sponsor may provide up to $1,500,000 in working capital loans, which can be converted into units at $10.00 per unit[369] - The board of directors has determined that Messrs. Chao and Bell and Ms. Wells are independent directors[376] Principal Accountant Fees and Services The company paid its auditor, WithumSmith+Brown, PC, approximately $57,680 in audit fees for 2019 Accountant Fees (April 5, 2019 - Dec 31, 2019) | Fee Category | Amount ($) | | :--- | :--- | | Audit Fees | ~57,680 | | Audit-Related Fees | 0 | | Tax Fees | 0 | | All Other Fees | 0 | - The audit committee pre-approves all auditing and permitted non-audit services performed by the independent auditor[381] PART IV Exhibits, Financial Statement Schedules This section lists all documents filed as part of the Form 10-K, including financial statements and various agreements - This section provides an index of all financial statements and exhibits filed with the Form 10-K[383][384] Form 10-K Summary This item is not applicable - Not applicable[384]