Company Formation and Business Strategy - Mountain Crest Acquisition Corp. V was formed as a blank check company on April 8, 2021, with the intention to pursue business combinations in North America and Asia Pacific regions, excluding China[17]. - The company has not identified any specific business combination targets as of the date of the report[17]. - The company aims to focus on private companies with positive operating cash flow or compelling economics in North America and Asia Pacific regions, excluding China[32]. - The acquisition strategy emphasizes identifying businesses with significant assets and successful management teams seeking access to U.S. public capital markets[32]. - The company aims to identify target businesses with significant competitive advantages and underexploited growth opportunities, particularly in North America and Asia[33]. - The management team has extensive experience in structuring complex transactions and accessing capital markets, which is expected to aid in identifying high-quality business combination targets[23]. - The company intends to leverage its board's network of relationships with venture capitalists, private equity, and hedge fund managers to source potential targets[31]. IPO and Financial Information - Mountain Crest Acquisition Corp. II raised $57.5 million through its IPO in January 2021, selling 5,750,000 units at $10.00 per unit[20]. - Mountain Crest Acquisition Corp. III raised $54.17 million in its IPO in June 2021, selling 5,417,193 units at $10.00 per unit[21]. - Mountain Crest Acquisition Corp. IV also raised $57.5 million in its IPO in July 2021, selling 5,750,000 units at $10.00 per unit[22]. - The company completed its IPO on November 16, 2021, raising gross proceeds of $60 million from the sale of 6,000,000 units at $10.00 per unit[98]. - An additional 900,000 units were issued through the over-allotment option, generating an extra $9 million, bringing total proceeds in the trust account to $69 million[99][110]. - As of December 31, 2021, the trust account held $69,000,843, including $843 in interest income from marketable securities[101][113]. - The company reported a net loss of $150,755 for the period from inception (April 8, 2021) through December 31, 2021, primarily due to operating costs[108]. - Cash used in operating activities during the same period was $151,016, with changes in operating assets and liabilities providing $582[112]. - The company has incurred $5,090,361 in offering costs, including $1,380,000 in underwriting fees[111]. Business Combination and Stockholder Rights - The company plans to complete its initial business combination within 12 months of its IPO, extendable to 15 months if a definitive agreement is executed[35]. - The fair market value of the target business must be at least $53.54 million to satisfy the 80% test for the initial business combination[40]. - The initial public share redemption price is set at $10.00 per share, regardless of the over-allotment option[39]. - The company will seek to acquire 100% of the equity interests or assets of the target business, but may own less than 100% under certain conditions[41]. - Stockholder approval is not required under Delaware law for certain types of business combinations, but Nasdaq rules require approval if shares representing 20% or more of outstanding shares are issued[46]. - A majority of outstanding shares must vote in favor of the business combination for it to be consummated, with approximately 88% of shares needing to avoid exercising conversion rights[50]. - Public stockholders can convert their shares for a pro rata portion of the trust account, initially set at $10.00 per share, plus any interest earned[55]. - Stockholders are restricted from seeking conversion rights for 20% or more of the shares sold in the IPO to prevent manipulation[57]. - If the business combination is not approved, stockholders who exercised conversion rights will not be entitled to convert their shares for the trust account[64]. - The tender offer for stockholders will remain open for at least 20 business days, and the company cannot complete the business combination until this period expires[48]. Management and Governance - The management team has significant experience in identifying and monetizing underexploited growth opportunities[34]. - The board of directors consists of five members, with three deemed independent under SEC and Nasdaq rules[142]. - The audit committee, composed of independent directors, is responsible for reviewing annual financial statements and ensuring compliance with applicable laws[148]. - The company will only enter into business combinations approved by a majority of independent directors[147]. - The audit committee includes Dr. Todd Milbourn, who qualifies as an "audit committee financial expert" under SEC regulations[150]. - The compensation committee, chaired by Wenhua Zhang, oversees executive compensation and incentive plans[151]. - Officers and directors may have conflicts of interest due to multiple business affiliations and obligations[156]. Legal and Compliance - There are no material legal proceedings currently pending against the company or its management team[84][89]. - The company will not comply with certain Delaware laws regarding creditor claims, potentially extending the statute of limitations for claims to six years[66]. - Insiders have agreed to be jointly liable for any claims that reduce the trust account below $10.00 per public share, except for claims from parties who executed waiver agreements[69]. - The company will seek waivers from third parties to limit claims against the trust account, although there is no guarantee that all parties will comply[69]. - If bankruptcy occurs, the trust account proceeds may be subject to claims that prioritize creditors over stockholders, potentially reducing redemption amounts[73]. Financial Reporting and Audit - The financial statements of Mountain Crest Acquisition Corp. V present a fair view of the company's financial position as of December 31, 2021, and its operations from April 8, 2021, through December 31, 2021[210]. - The audit was conducted in accordance with PCAOB standards, ensuring reasonable assurance about the absence of material misstatements in the financial statements[213]. - The company has a responsibility to ensure the accuracy of its financial statements, which are subject to audit by independent registered public accounting firms[212]. - The management's plan regarding the company's ability to continue as a going concern is discussed in the financial statements[211]. - There is substantial doubt about the company's ability to continue as a going concern if a Business Combination is not completed by November 16, 2022[211]. - The company has not included any adjustments in the financial statements that might result from the uncertainty regarding its ability to continue operations[211]. - The balance sheet as of December 31, 2021, is a key financial document reflecting the company's financial health at that date[216]. Operational Matters - The company has no full-time employees and relies on one executive officer who is not obligated to devote specific hours[83]. - The company does not intend to pay cash dividends prior to completing a business combination, with future dividends dependent on revenues and earnings[95]. - The company plans to use substantially all funds in the trust account to complete its business combination and for working capital of the target business[114]. - The company does not anticipate needing to raise additional funds for operating expenditures, but may require financing for a Business Combination or to redeem public shares[117]. - The company has a contractual obligation to pay affiliates or advisors up to $10,000 per month for administrative support until a Business Combination or liquidation occurs[120]. - The company is paying a monthly administrative fee of $10,000 to Mountain Crest Global Holdings LLC for office space and services until the initial business combination is completed[144].
Mountain Crest Acquisition Corp. V(MCAGU) - 2021 Q4 - Annual Report