Rumble (US:RUM)2022-03-24 20:30Financial Overview - The company completed its initial public offering on February 23, 2021, raising gross proceeds of $300 million from the sale of 30 million units at $10.00 per unit[23]. - A private placement of 700,000 units was also completed, generating an additional $7 million, bringing total proceeds to $307 million, which were placed in a trust account[24]. - The company has $300 million available for an initial business combination based on the balance of its trust account as of December 31, 2021[71]. - As of December 31, 2021, the company had a working capital deficit of approximately $2.516 million[164]. - The company reported a net loss of approximately $17,908,000 for the year ended December 31, 2021[168]. - As of December 31, 2021, the company had $25,000 in cash in its operating account and had not generated any revenues to date[164][167]. - The company incurred approximately $2,756,000 in general and administrative expenses for the year ended December 31, 2021[168]. Business Combination Strategy - The company must complete its initial business combination by February 23, 2023, or it will liquidate and distribute the trust account amounts[25]. - The business combination agreement with Rumble involves an arrangement consideration of $3.15 billion, plus Rumble's cash and cash equivalents at closing[30]. - The company is targeting businesses with an enterprise value of approximately $600 million to $1.5 billion, focusing on sectors like financial services, healthcare, and technology[43]. - The acquisition strategy aims to leverage management expertise and relationships to enhance target companies' growth and performance[42]. - The company must complete one or more business combinations with an aggregate fair market value of at least 80% of the assets held in the trust account at the time of signing a definitive agreement[46]. - The company anticipates that the post-transaction entity will own or acquire at least 50% of the voting securities of the target business to avoid registration as an investment company[50]. - The company may need to seek additional financing if the cash portion of the purchase price exceeds the amount available from the trust account after redemptions[51]. - The company is targeting businesses with enterprise values greater than the net proceeds from its initial public offering and related sales[51]. - The company may pursue an Affiliated Joint Acquisition, which could involve co-investment with other entities[47]. - If the initial business combination involves multiple target businesses, the 80% fair market value test will be based on the aggregate value of all transactions[50]. Management and Advisory Team - The management team has a proven track record in sourcing, structuring, and executing transactions across various industries and market conditions[44]. - The company has engaged CF&Co. as an advisor for its initial business combination and will pay a customary financial advisory fee upon consummation[84]. - The company has committed up to $1.75 million from the sponsor to fund expenses related to the initial business combination[165]. - Howard W. Lutnick has been the Chairman and CEO since April 2020, with extensive experience in investment and management since joining Cantor in 1983[199]. - Anshu Jain has been the President since October 2020, directing strategy and operations across Cantor's businesses[200]. - Jane Novak has served as Chief Financial Officer since July 2021, overseeing complex accounting matters and compliance with U.S. GAAP and IFRS[202]. Stockholder and Redemption Rights - A majority of the outstanding shares of common stock must be voted in favor of the initial business combination for it to be approved, requiring at least 10,900,001 shares, or 36.3% of the 30,000,000 public shares sold in the initial public offering[102]. - Stockholder approval is required for a merger of the company with a target, while other types of transactions may not require such approval[90]. - The company will provide public stockholders with the opportunity to redeem shares either through a stockholder meeting or a tender offer[98]. - Public stockholders are restricted from seeking redemption rights for more than 15% of the shares sold in the initial public offering, which aims to prevent stockholders from blocking the business combination[104]. - The redemption price for public shares upon liquidation is expected to be approximately $10.00 per share, but this amount may be reduced due to creditor claims[116]. - If public stockholders tender more shares than the company has offered to purchase, the tender offer will be withdrawn, and the initial business combination will not be completed[100]. Risks and Challenges - The company may incur losses from costs related to the identification and evaluation of prospective target businesses if the initial business combination is not completed[85]. - The company faces intense competition from other entities, including blank check companies and private equity groups, which may limit its ability to acquire larger target businesses[128]. - The company may face risks related to selecting a suitable business target and completing the initial business combination within the prescribed timeframe[136]. - Trust account funds may not be protected against third-party claims or bankruptcy, posing a risk to stockholders[137]. - The company has identified a material weakness in its internal control over financial reporting as of December 31, 2021, which could adversely affect investor confidence[138]. Corporate Governance - The board of directors consists of six directors, with founder shares holders electing all directors prior to the initial business combination[207]. - The audit committee is composed of three independent directors, with Mr. Barnard serving as the chair[211]. - Each member of the audit committee is financially literate, and Mr. Barnard qualifies as an "audit committee financial expert" as per SEC rules[212]. - The compensation committee also consists of three independent directors, chaired by Mr. Barnard, responsible for executive compensation oversight[215]. - The company does not have a standing nominating committee but allows independent directors to recommend nominees for board selection[217].