Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | PROFICIENT ALPHA ACQUISITION CORP | |
Entity Incorporation State | NV | |
Entity File Number | 001-38925 | |
Entity Central Index Key | 0001764711 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 14,467,000 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Shell Company | true |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2020 | Sep. 30, 2019 |
Current assets | ||
Cash | $ 1,342,731 | $ 1,078,708 |
Escrow deposit | 800,000 | |
Prepaid expenses | 35,000 | 105,000 |
Other receivable | 219 | 219 |
Total current assets | 1,377,950 | 1,983,927 |
Government securities held in Trust Account | 117,116,839 | 115,925,644 |
Total assets | 118,494,789 | 117,909,571 |
Current liabilities | ||
Accrued expenses | 529,239 | 38,344 |
Accrued expenses - related parties | 56,997 | 19,074 |
Tax payable | 21,009 | 19,343 |
Total current liabilities | 607,245 | 76,761 |
Commitments | ||
Common stock subject to possible redemption, 11,288,754 and 9,730,167 shares at redemption value as of March 31, 2020 and September 30, 2019, respectively | 112,887,543 | 97,301,671 |
Shareholders' Equity | ||
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding as of March 31, 2020 and September 30, 2019, respectively | ||
Common stock, $.001 par value, 150,000,000 shares authorized, 3,178,246 and 4,736,833 shares issued and outstanding (excluding 11,288,754 and 9,730,167 shares subject to possible redemption) as of March 31, 2020 and September 30, 2019, respectively | 3,178 | 4,737 |
Additional paid in capital | 4,869,158 | 20,449,027 |
Accumulated deficits | 127,665 | 77,375 |
Total Shareholders' Equity | 5,000,001 | 20,531,139 |
Total Liabilities and Shareholders' Equity | $ 118,494,789 | $ 117,909,571 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common Stock redemption | 11,288,754 | 9,730,167 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | ||
Preferred Stock, shares outstanding | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 150,000,000 | 150,000,000 |
Common Stock, shares issued | 3,178,246 | 4,736,833 |
Common Stock, shares outstanding | 3,178,246 | 4,736,833 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Operating expense | ||||
Audit fee | $ 4,800 | $ 2,000 | $ 14,800 | $ 10,000 |
Officers compensation | 56,556 | 65,852 | 120,889 | 137,519 |
Legal fees | 574,722 | 701,024 | 25,000 | |
General and administrative expenses | 198,708 | 24,999 | 306,522 | 25,432 |
Total operating expense | 834,786 | 92,851 | 1,143,235 | 197,951 |
Other income | ||||
Unrealized gain from the trust account | 720,402 | 1,223,678 | ||
Interest income | 3,095 | 5,714 | ||
Total other income | 723,497 | 1,229,392 | ||
Net income (loss) before income tax | (111,289) | (92,851) | 86,157 | (197,951) |
Income tax (provision) | (4,289) | 35,867 | ||
Net income (loss) | $ (107,000) | $ (92,851) | $ 50,290 | $ (197,951) |
Net (loss) per share | ||||
Basic and diluted | $ (0.26) | $ (0.04) | $ (0.29) | $ (0.08) |
Weighted average number of shares | ||||
Basic and diluted | 3,178,246 | 2,500,000 | 3,966,103 | 2,500,000 |
Shareholders Equity
Shareholders Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Subscription Receivable | Retained Earnings / Accumulated Deficit | Total |
Beginning Balance, shares at Sep. 30, 2018 | 2,875,000 | |||||
Beginning Balance, amount at Sep. 30, 2018 | $ 2,875 | $ 554,347 | $ (182,500) | $ (113,016) | $ 261,706 | |
Common stock issued for services | 6,667 | 6,667 | ||||
Collection of subscription receivable | $ 166,250 | $ 166,250 | ||||
Common stock subject to possible redemption, shares | ||||||
Common stock subject to possible redemption, amount | ||||||
Net income (loss) | $ (197,951) | $ (197,951) | ||||
Ending Balance, shares at Mar. 31, 2019 | 2,875,000 | |||||
Ending Balance, amount at Mar. 31, 2019 | $ 2,875 | $ 561,014 | $ (16,250) | $ (310,967) | $ 236,672 | |
Beginning Balance, shares at Sep. 30, 2019 | 4,736,833 | |||||
Beginning Balance, amount at Sep. 30, 2019 | $ 4,737 | $ 20,449,027 | $ 77,375 | $ 20,531,139 | ||
Common stock issued for services | 4,444 | 4,444 | ||||
Collection of subscription receivable | ||||||
Common stock subject to possible redemption, shares | (1,558,587) | |||||
Common stock subject to possible redemption, amount | $ (1,559) | $ (15,584,313) | $ (15,585,872) | |||
Net income (loss) | $ 50,290 | $ 50,290 | ||||
Ending Balance, shares at Mar. 31, 2020 | 3,178,246 | |||||
Ending Balance, amount at Mar. 31, 2020 | $ 3,178 | $ 4,869,158 | $ 127,665 | $ 5,000,001 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 50,290 | $ (197,951) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Common stock issued for service | 4,444 | 6,667 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 70,000 | |
Accrued expenses | 490,895 | |
Accrued expenses - related parties | 37,923 | (8,147) |
Tax payable | 1,666 | |
Net cash provided by (used in) operating activities | 655,218 | (199,431) |
Cash flows from investing activities: | ||
Escrow deposit | 800,000 | |
Investment of government securities held in Trust Account | (1,191,195) | |
Net cash (used in) investing activities | (391,195) | |
Cash flows from financing activities: | ||
Collection of subscription receivable | 166,250 | |
Net cash provided by financing activities | 166,250 | |
Net increase/(decrease) in cash and cash equivalents | 264,023 | (33,181) |
Cash and cash equivalents at beginning of the period | 1,078,708 | 302,362 |
Cash and cash equivalents at end of the period | 1,342,731 | 269,181 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | ||
Cash paid for income taxes | 34,201 | |
NON-CASH TRANSACTIONS: | ||
Common stock subject to possible redemption | $ 15,585,872 |
NOTE 1 - BASIS FOR PRESENTATION
NOTE 1 - BASIS FOR PRESENTATION | 6 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - BASIS FOR PRESENTATION | NOTE 1. BASIS OF PRESENTATION The accompanying unaudited condensed financial statements of Proficient Alpha Acquisition Corp. (the “Company”) have been prepared in accordance with the generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the applicable rules and regulations for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Annual Report on Form 10-K for the year ended September 30, 2019. The interim results for the three and six months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending September 30, 2020 or for any future interim periods. |
NOTE 2 - DESCRIPTION OF ORGANIZ
NOTE 2 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 6 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 2 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 2. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS The Company is a blank check company incorporated in Nevada on July 27, 2018, which was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (a “Business Combination”). The Company may, subject to certain limitations, pursue a Business Combination target with operations or prospects in the financial services sector in China, including Hong Kong, Macau and mainland China. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012. As of March 31, 2020, the Company had not yet commenced any operations. All activity for the period from July 27, 2018 (inception) through March 31, 2020 relates to the Company’s formation and the initial public offering (“IPO”), and subsequent to the IPO, identifying a target company for a Business Combination and activities in connection with the proposed acquisition of Lion Financial Group Limited, a corporation organized under the laws of the British Virgin Islands (“Lion”) (see Note 3). The Company will not generate any operating revenues until after consummation of the initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO. On June 3, 2019, the Company consummated its IPO of 10,000,000 units (“Units”). Each Unit consists of one share of common stock, $0.001 par value per share (“Common Stock”), one warrant (“Public Warrant”) to purchase one share of Common Stock at an exercise price of $11.50 per share, and one right (“Right”) to receive one-tenth of one share of Common Stock upon consummation of the Company’s initial Business Combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $100,000,000. Pursuant to the Underwriting Agreement, the Company granted the underwriters in the IPO (the “Underwriters”) a 30-day option to purchase up to 1,500,000 additional Units solely to cover over-allotments, if any (the “Over-Allotment Option”); and simultaneously with the consummation of the IPO, the Underwriters exercised the Over-Allotment Option in full, generating additional gross proceeds of $15,000,000 to the Company. Simultaneously with the consummation of the IPO and the sale of the Units, the Company consummated the private placement (“Private Placement”) of 5,375,000 warrants (“Placement Warrants”) at a price of $1.00 per Placement Warrant, generating total proceeds of $5,375,000. Following the closing of the IPO on June 3, 2019, an amount of $115,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the Placement Warrants Transaction costs amounted to $6,625,439, consisting of cash of $2,875,000 of underwriting fees and $315,120 of IPO costs, the fair value of 92,000 shares issued and 920,000 warrants granted to the Underwriters in total amount of $3,435,319 pursuant to the Underwriting Agreement. In addition, $2,177,380 of cash was held outside of the Trust Account and is available for working capital purposes. On March 10, 2020, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Lion and other relevant parties for a proposed acquisition of Lion (see Note 3). The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (as defined below) (net of taxes payable) at the time of the signing an agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended, or the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its stockholders with the opportunity to redeem all or a portion of their shares of Common Stock upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially approximately $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Articles of Incorporation, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem the shares of the Common Stock sold as part of the Units in the IPO (“Public Shares”) in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the sponsor, officers and directors (the “Initial Stockholders”) have agreed to vote their founder shares and any Public Shares held by them in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. The Company will have until June 3, 2020 (or December 3, 2020 if the Company extends the period to consummate a Business Combination by the full amount) to consummate a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the The Initial Stockholders have agreed to (i) waive any and all right, title, interest or claim of any kind the Initial Stockholders may have in the future in or to any distribution of the Trust Account and any remaining net assets of the Company as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason whatsoever; (ii) waive any right to exercise conversion rights with respect to any shares of the Common Stock owned or to be owned by the Initial Stockholders, directly or indirectly, whether such shares be part of the founder shares or shares of Common Stock purchased by the Initial Stockholders in the IPO or in the aftermarket, and each agrees not to seek conversion with respect to such shares in connection with any vote to approve a Business Combination or to sell any such shares in a tender offer undertaken by the Company in connection with a Business Combination; and (iii) not propose, or vote in favor of, an amendment to Article Sixth of the Company’s Amended and Restated Articles of Incorporation, as the same may be amended from time to time, prior to the consummation of a Business Combination unless the Company provides public stockholders with the opportunity to redeem their shares of Common Stock upon such approval in accordance with such Article Sixth thereof. In the event that the Company does not consummate a Business Combination and must liquidate and its remaining net assets are insufficient to complete such liquidation, each of the Initial Stockholders agrees to advance such funds necessary to complete such liquidation and agrees not to seek repayment for such expenses. In order to protect the amounts held in the Trust Account, Mr. Shih-Chung Chou, our sponsor at the time of the IPO (the “Original Sponsor”), agreed to be personally liable to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share by the claims of target businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company. Additionally, the agreement entered by the Original Sponsor Original Sponsor Original Sponsor the Original Sponsor On March 12, 2020, the Original Sponsor assigned to Complex Zenith Limited, a British Virgin Islands company wholly-owned by the Original Sponsor (the “ ”), pursuant to a Securities Assignment and Joinder Agreement, dated as of March 12, 2020 (the “ ”), all of his equity interest in the Company (including 431,250 shares of the Company’s Common Stock and to purchase 5,375,000 shares of the Company’s Common Stock at $11.50 per share) and his rights and obligations under certain agreements entered in connection with the IPO, including (i) a letter agreement, dated as of May 29, 2019, by and among the Company, I-Bankers Securities, Inc. (“ , and the Initial Stockholders, and (iv) the Founder Registration Rights Agreement (the foregoing agreements, collectively the “ ”). Pursuant to the Joinder, the New Sponsor agreed to become a party to each of the IPO Agreements and to be bound by the terms of each IPO Agreement, and the other parties to each of the IPO Agreements have agreed to accept the New Sponsor as a party to each of the IPO Agreements. |
NOTE 3 - DESCRIPTION OF THE TRA
NOTE 3 - DESCRIPTION OF THE TRANSACTIONS | 6 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
NOTE 3 - DESCRIPTION OF THE TRANSACTIONS | NOTE 3. DESCRIPTION OF THE TRANSACTIONS On March 10, 2020, the Company entered into the Business Combination Agreement with Lion, Lion Group Holding Ltd., a Cayman Islands exempted company and a wholly-owned subsidiary of Lion (“Pubco”), Lion MergerCo 1, Inc., a Delaware corporation and a wholly-owned subsidiary of Pubco (“Merger Sub”), Shih-Chung Chou, an individual, in the capacity as the Purchaser Representative thereunder, Jian Wang and Legend Success Ventures Limited, each, in the capacity as a Seller Representative thereunder, and each of the holders of Lion’s outstanding capital shares (the “Sellers”). Pursuant to the Business Combination Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”), (a) Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”), and with holders of the Company’s securities receiving substantially identical securities of Pubco, and (b) immediately prior to the Merger, Pubco will acquire all of the issued and outstanding ordinary shares of Lion (the “Purchased Shares”) from the Sellers in exchange for Class A and Class B ordinary shares of Pubco, with Lion becoming a wholly-owned subsidiary of Pubco (the “Share Exchange”, and together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Transactions”). The total consideration to be paid by Pubco to the Sellers for the Purchased Shares shall be an aggregate number of Pubco ordinary shares (the “Exchange Shares”) with an aggregate value (the “Exchange Consideration”) equal to, without duplication, (i) $125,000,000, plus (or minus, if negative) (ii) Lion’s net working capital less a target net working capital of $815,000, minus (iii) the aggregate amount of any outstanding indebtedness, net of cash and cash equivalents, of Lion and its subsidiaries, and minus (iv) the amount of any unpaid transaction expenses of Lion, with each Pubco ordinary share to be issued to the Sellers valued at a price equal to the price at which each share of the Common Stock is redeemed (the “Redemption Price”) pursuant to the redemption by the Company of its public stockholders in connection with the Company’s initial Business Combination, as required by its amended and restated articles of incorporation (the “Redemption”). Jian Wang, the Chairman of Lion (the “Main Seller”), and Legacy Success Ventures Limited (collectively, the “Class B Sellers”), shall each receive solely Pubco Class B ordinary shares (the “Class B Exchange Shares”) and all of the other Sellers (the “Class A Sellers”) shall receive solely Pubco Class A ordinary shares (the “Class A Exchange Shares”). The Pubco Class A ordinary shares and the Pubco Class B ordinary shares will be identical in rights except that the Class B ordinary shares will (i) entitle the holder to 10 votes per share and (ii) be convertible, at the election of the holder, into Pubco Class A ordinary shares on a one-to-one basis. The Exchange Consideration is subject to adjustment after the Closing based on final confirmation of Lion’s net working capital, the outstanding indebtedness of Lion and its subsidiaries net of cash and cash equivalents, and any unpaid transaction expenses of Lion, as of the date of the Closing. If the finally determined number of Exchange Shares is (i) greater than the estimated number of Exchange Shares, Pubco will issue an additional number of Pubco Class A ordinary shares and Pubco Class B ordinary shares equal to such difference to the Sellers, subject to a maximum amount equal to the amount of Indemnity Escrow Property (defined below) at such time or (ii) less than the estimated number of Exchange Shares, Pubco will cause the Escrow Agent to release from escrow a number of Indemnity Escrow Shares (defined below) equal to such difference to Pubco, subject to a maximum amount equal to the Indemnity Escrow Property at such time. The parties agreed that at or prior to the Closing, Pubco, the Sellers and the Escrow Agent will enter into an Escrow Agreement, effective as of the Closing, in form and substance reasonably satisfactory to the Company and Lion (the “Escrow Agreement”), pursuant to which Pubco will deliver to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to 15% of the estimated Exchange Consideration otherwise issuable to the Sellers at the Closing (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted the “Indemnity Escrow Shares”) to be held, along with any dividends, distributions or income thereon (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”) in a segregated account (the “Indemnity Escrow Account”) and disbursed in accordance with the Business Combination Agreement and the Escrow Agreement. The Indemnity Escrow Shares will be held in the Indemnity Escrow Account for a period of 24 months after the Closing and shall be the sole and exclusive source of payment for any post-Closing purchase price adjustment and for any post-closing indemnification claims (other than certain fraud claims and breaches of Lion and the Sellers’ fundamental representations); provided that half of the Indemnity Escrow Property will be released to the Class B Sellers on the 12 month anniversary of the Closing. Within three business days of the 24 month anniversary of the Closing, all remaining Indemnity Escrow Property will be released to the Class B Sellers in accordance with the Business Combination Agreement. However, an amount of Indemnity Escrow Property equal to the value of any pending and unresolved claims will remain in the Indemnity Escrow Account until finally resolved. Additionally, at the Closing, Pubco will deliver to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to thirty percent (30%) of the estimated Exchange Consideration otherwise issuable to the Sellers at the Closing (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, the “Earnout Escrow Shares”) to be held, along with any dividends, distributions or income thereon (together with the Earnout Escrow Shares, the “Earnout Escrow Property”) in a segregated account and disbursed in accordance with the Business Combination Agreement and the Escrow Agreement. In the event that the net income for the calendar year ending December 31, 2021 (the “2021 Net Income”), as set forth in Pubco’s audited financial statements, is equal to or greater than $19,000,000 (the “First Net Income Target”), then, the Class B Sellers’ rights to 50% of the Earnout Escrow Property (the “First Half Earnout Property”) shall vest and shall no longer be subject to forfeiture. If the 2021 Net Income is less than the First Net Income Target, but is equal to or greater than $9,500,000, then the Class B Sellers’ rights to 50% of the First Half Earnout Property shall vest and shall no longer be subject to forfeiture. In all other cases, the First Half Earnout Property will be forfeited. In the event that the net income for the calendar year ending December 31, 2022 (the “2022 Net Income”), as set forth in Pubco’s audited financial statements, is equal to or greater than $21,850,000 (the “Second Net Income Target”), then the Class B Sellers’ rights to the remaining Earnout Escrow Property (after giving effect to any forfeitures for the 2021 calendar year, the “Second Half Earnout Property”) shall vest and shall no longer be subject to forfeiture. If the 2022 Net Income is less than the Second Net Income Target, but is equal to or greater than $10,925,000, then the Class B Sellers’ rights to 50% of the Second Half Earnout Property shall vest and shall no longer be subject to forfeiture. In all other cases, the Second Half Earnout Property will be forfeited. The Transactions were not closed as of March 31, 2020. |
NOTE 4 - GOVERNMENT SECURITIES
NOTE 4 - GOVERNMENT SECURITIES HELD IN TRUST ACCOUNT | 6 Months Ended |
Mar. 31, 2020 | |
Note 4 - Government Securities Held In Trust Account | |
NOTE 4 - GOVERNMENT SECURITIES HELD IN TRUST ACCOUNT | NOTE 4. GOVERNMENT SECURITIES HELD IN TRUST ACCOUNT As of March 31, 2020, the assets of $117,116,839 held in the Trust Account were substantially held in U.S. Treasury Bills with maturity of six months. Management elects to measure the government securities at fair value in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 825 “Financial Instruments”. Any changes in fair value of the government securities are recognized in net income. Impairment of government securities is recognized in earnings when a decline in value has occurred that is deemed to be other than temporary, and the current fair value becomes the new cost basis for the securities. |
NOTE 5 - ESCROW DEPOSIT
NOTE 5 - ESCROW DEPOSIT | 6 Months Ended |
Mar. 31, 2020 | |
Note 5 - Escrow Deposit | |
NOTE 5- ESCROW DEPOSIT | NOTE 5. ESCROW DEPOSIT On October 2, 2019, the escrow deposit of $800,000 was released by the escrow agent and returned to the Company due to the termination of a non-binding letter of intent with a potential target company for an initial Business Combination entered into by and between the Company and such potential target company on July 18, 2019. |
NOTE 6 - PREPAID EXPENSES
NOTE 6 - PREPAID EXPENSES | 6 Months Ended |
Mar. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
NOTE 6 - PREPAID EXPENSES | NOTE 6. PREPAID EXPENSES As of March 31, 2020, the Company had prepaid expenses of $35,000 in connection with the prepayment for D&O insurance. |
NOTE 7 - ACCRUED EXPENSES
NOTE 7 - ACCRUED EXPENSES | 6 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
NOTE 7 - ACCRUED EXPENSES | NOTE 7. ACCRUED EXPENSES As of March 31, 2020, the Company had accrued expenses of $529,239 due primarily to legal fees in connection with the potential Business Combination. |
NOTE 8 - INCOME TAXES
NOTE 8 - INCOME TAXES | 6 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
NOTE 8 - INCOME TAXES | NOTE 8. INCOME TAXES The Company is subject to federal taxes and no state taxes in the State of Nevada. A reconciliation of the Company’s effective income tax rate to the federal statutory rate is as follows: March 31, 2020 Federal income tax expense at the statutory rate (20%) $ 17,231 State income taxes, net of federal benefit — Permanent differences 18,636 Change in valuation allowance — Provision for income taxes $ 35,867 As of March 31, 2020, the Company had income tax payable in amount of $21,009. The Company accounts for its deferred tax assets and liabilities, including excess tax benefits of share-based payments, based on the tax ordering of deductions to be used on its tax returns. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities was $0 as of March 31, 2020. |
NOTE 9 - ACCRUED EXPENSE - RELA
NOTE 9 - ACCRUED EXPENSE - RELATED PARTY | 6 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
NOTE 9 - ACCRUED EXPENSE - RELATED PARTY | NOTE 9. ACCRUED EXPENSES - RELATED PARTY As of March 31, 2020, the Company had $56,997 due to related parties attributable to accrued compensation to the Company’s management and directors. Pursuant to the executed offer letters, the Company pays the Company’s Chief Executive Officer and Chief Financial Officer, $2,000 and $5,000 in cash per month starting from February 1, 2019 and August 1, 2018, respectively, and issued to each of them 50,000 founder shares. In addition, the Company pays the Company’s directors $2,000 in cash per month starting from August 1, 2018 and will issue a total of 250,000 shares of Common Stock within 10 days after the closing date of the initial Business Combination. The fair value of this stock issuance was determined by the fair value of the Company’s Common Stock on the grant date, at a price of $0.20 per share. Accordingly, the Company calculated the stock-based compensation of $70,000 at its fair value and amortized pro rata within 18 months. A total of 100,000 founder shares to Chief Executive Officer and Chief Financial Officer were issued and the 250,000 shares to directors will be issued within 10 days after the closing date of the initial Business Combination. On March 20, 2019, the Company entered into an offer letter with the Company’s current Chief Executive Officer, President and Secretary, pursuant to which, the Company agreed to issue to him 50,000 shares of Common Stock for his services. The 50,000 shares will be issued within 10 days after the closing date of the initial Business Combination. The fair value of this stock issuance was determined by the fair value of the Company’s Common Stock on the grant date, at a price of $0.20 per share. Accordingly, the Company calculated the stock-based compensation of $10,000 at its fair value and amortized pro rata within 18 months. Accordingly, the Company recognized stock-based compensation of $4,444 during the six months ended March 31, 2020. The Company recognized compensation expenses of $14,444 in connection with the Common Stock hereto, which was included in the accrued expenses – related parties as of March 31, 2020. The unrecognized stock-based compensation was $0 as of March 31, 2020. |
NOTE 10 - FAIR VALUE MEASUREMEN
NOTE 10 - FAIR VALUE MEASUREMENTS | 6 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
NOTE 10 - FAIR VALUE MEASUREMENTS | NOTE 10. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level March 31, 2020 Assets: Government securities held in Trust Account 1 $ 117,116,839 |
NOTE 11 - COMMON STOCK SUBJECT
NOTE 11 - COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION | 6 Months Ended |
Mar. 31, 2020 | |
Note 11 - Common Stock Subject To Possible Redemption | |
NOTE 11 - COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION | NOTE 11. COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION The Company accounts for its Common Stock subject to possible conversion in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Shares of Common Stock subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Shares of conditionally redeemable Common Stock (including shares of Common Stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, shares of Common Stock are classified as stockholders’ equity. The Company’s Common Stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of March 31, 2020, the shares of Common Stock subject to possible redemption are presented at redemption value of $112,887,543 as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. |
NOTE 12 - CREDIT ARRANGEMENT
NOTE 12 - CREDIT ARRANGEMENT | 6 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
NOTE 12. CREDIT ARRANGEMENT | NOTE 12. CREDIT ARRANGEMENT On July 24, 2019, the Company and the Original Sponsor entered into an unsecured promissory note (the “Note”) for a principal amount of up to $800,000 to be used by the Company for working capital purposes. Pursuant to the terms of the Note, the Original Sponsor agreed to loan to the Company up to a total of $800,000, in the event that the Company’s cash held outside of its Trust Account is less than $150,000. The Note bears no interest and is repayable in full upon the earlier of the closing of the Company’s initial Business Combination and the date of the winding up of the Company. |
NOTE 8 - INCOME TAXES (Tables)
NOTE 8 - INCOME TAXES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Federal Tax table | March 31, 2020 Federal income tax expense at the statutory rate (20%) $ 17,231 State income taxes, net of federal benefit — Permanent differences 18,636 Change in valuation allowance — Provision for income taxes $ 35,867 |
NOTE 2 - DESCRIPTION OF ORGAN_2
NOTE 2 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details Narrative) | 6 Months Ended |
Mar. 31, 2020USD ($)shares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
IPO gross proceeds | $ | $ 115,000,000 |
Private placement | shares | 5,375,000 |
NOTE 9 - ACCRUED EXPENSE - RE_2
NOTE 9 - ACCRUED EXPENSE - RELATED PARTY (Details Narravtive) | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Payables and Accruals [Abstract] | |
Stock based compensation | $ 4,444 |
Compensation expense | 14,444 |
Unrecongnized stock based compensation |