Mountain Crest Acquisition V(MCAG) - 2021 Q4 - Annual Report

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 primarily 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]. - Mountain Crest Acquisition Corp. II raised $57.5 million in its IPO by selling 5,750,000 units at $10.00 per unit, and completed its business combination with Better Therapeutics, Inc. on October 28, 2021[20]. - Mountain Crest Acquisition Corp. III raised $54.17 million in its IPO by selling 5,417,193 units at $10.00 per unit, and entered into a merger agreement with Etao International Group[21]. - Mountain Crest Acquisition Corp. IV raised $57.5 million in its IPO by selling 5,750,000 units at $10.00 per unit and is currently seeking business combination targets[22]. - The company aims to leverage its management's expertise and extensive relationships to identify high-quality business combination targets[23]. - The focus is on private companies in North America and Asia Pacific regions with positive operating cash flow or clear paths to it, significant assets, and strong management teams[32]. - The company intends to capitalize on its board's network to create strategic initiatives for growth post-business combination[31]. - The company aims to focus on under-researched and underappreciated assets poised for significant growth once capitalized[33]. - The company intends to identify target companies with significant embedded growth opportunities, leveraging its management team's experience[34]. Financial Information and Performance - 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]. - The company has not generated any revenues to date and does not expect to do so until after completing a business combination[107]. - The company incurred total offering costs of $5,090,361, which included $1,380,000 in underwriting fees[111]. - As of December 31, 2021, the trust account held $69,000,843, including $843 of interest income[101][113]. - As of December 31, 2021, the company had cash of $474,538 available for operational expenses related to identifying and evaluating target businesses[115]. - The company has no long-term debt or off-balance sheet financing arrangements, and its only contractual obligation was to pay affiliates up to $10,000 per month[120][119]. - The financial statements present a fair view of the company's position as of December 31, 2021, and its operations from April 8, 2021, through December 31, 2021[210]. - The balance sheet as of December 31, 2021, reflects the company's financial position at the end of the reporting period[216]. Business Combination Process - The company will have up to 18 months to complete its initial business combination, with specific conditions for extensions[35]. - The company plans to structure its initial business combination to ensure it owns or acquires at least 50% of the target's voting securities[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]. - If stockholder approval is sought, the company will distribute proxy materials and provide stockholders with conversion rights upon completion of the initial business combination[49]. - The company will only consummate the initial business combination if public stockholders do not exercise conversion rights that would reduce net tangible assets below $5,000,001 and a majority of outstanding shares vote in favor[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]. - The company will cease all operations and redeem 100% of outstanding public shares if a business combination is not completed within 12 months, with a potential extension to 18 months[65]. - If the company fails to complete a business combination, public stockholders will receive a pro rata portion of the trust account, which may be less than $10.00 per share due to potential creditor claims[70]. Governance and Management - Dr. Suying Liu, the Chairman and CEO, has extensive experience in leading SPACs and has been involved in multiple successful business combinations[26]. - The audit committee consists of three independent directors, including Dr. Todd Milbourn, who serves as chairman, ensuring oversight of financial reporting and compliance[148]. - The compensation committee, chaired by Wenhua Zhang, is responsible for reviewing and approving executive compensation and corporate goals[151]. - The company has determined that it will only enter into business combinations approved by a majority of independent directors[147]. - The audit committee must approve any transactions with officers and directors to ensure terms are no less favorable than those from unaffiliated third parties[160]. - The company has a code of conduct and ethics applicable to all directors, officers, and employees[168]. Legal and Compliance - There are no material legal proceedings currently pending against the company or its management team[84]. - The company has not established specific minimum qualifications for director nominees but considers various factors such as integrity and professional reputation[154]. - The company has not entered into any employment agreements with executive officers or made agreements for benefits upon termination[171]. - The company has identified critical accounting policies that require estimates and assumptions affecting reported amounts of assets and liabilities[122]. - The company has not included any adjustments in the financial statements that might result from the uncertainty regarding its ability to continue operations[211]. Audit and Financial Reporting - The audit was conducted in accordance with PCAOB standards, ensuring reasonable assurance about the absence of material misstatements[213]. - The company has been audited by UHY LLP since 2021, indicating a consistent auditing relationship[215]. - The financial statements are prepared under generally accepted accounting principles in the United States[210]. - The company has not engaged in an audit of its internal control over financial reporting, focusing instead on the financial statements themselves[213].