Comparison to offerings of blank check companies
The following is from the prospectus of Arpeggio Acquisition Corporation:
The following table compares and contrasts the terms of our offering and the terms of an offering of blank check companies under Rule 419 promulgated by the SEC assuming that the gross proceeds, underwriting discounts and underwriting expenses for the Rule 419 offering are the same as this offering and that the underwriters will not exercise their over-allotment option. None of the terms under a Rule 419 offering will apply to this offering.
Escrow of offering proceeds
Terms of Our Offering: $20,400,000 of the net proceeds will be deposited into a trust fund maintained by Continental Stock Transfer & Trust Company.
Terms Under a Rule 419 Offering: $19,440,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depository institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
Investment of net proceeds
Terms of Our Offering: The $20,400,000 of net offering proceeds held in trust will only be invested in “government securities” defined as any Treasury Bill issued by the United States having a maturity of one hundred and eighty days or less.
Terms Under a Rule 419 Offering: Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940 or in securities that are direct obligations of, or obligations guaranteed as to principal of interest by, the United States.
Limitation on Fair Value or Net Assets of Target Business
Terms of Our Offering: The initial target business that we acquire must have a fair market value equal to at least 80% of our net assets at the time of such acquisition.
Terms Under a Rule 419 Offering: We would be restricted from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the maximum offering proceeds.
Trading of securities issued
Terms of Our Offering: The units may commence trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin to trade separately on the 90th day after the date of this prospectus unless Broadband Capital Management informs us of its decision to allow earlier separate trading, provided we have filed with the SEC an audited balance sheet reflecting our receipt of the net proceeds of this offering.
Terms Under a Rule 419 Offering: No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
Exercise of the warrants
Terms of Our Offering: The warrants cannot be exercised until the later of the completion of a business combination or one year from the date of this prospectus, and, accordingly, will only be exercised after the trust fund has been terminated and distributed.
Terms Under a Rule 419 Offering: The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
Election to remain and investor
Terms of Our Offering: We will give our stockholders the opportunity to vote on the business combination. In connection with seeking stockholder approval, we will send each stockholder a proxy statement containing information required by the SEC. A stockholder following the procedures described in this prospectus is given the right to convert his or her shares into his or her pro rata share of the trust fund. However, a stockholder who does not follow these procedures or a stockholder who does not take any action would not be entitled to the return of any funds.
Terms Under a Rule 419 Offering: A prospectus containing information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company, in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account would automatically be returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all of the deposited funds in the escrow account must be returned to all investors and none of the securities will be issued.
Business combination deadline
Terms of Our Offering: A business combination must occur within 18 months after the consummation of this offering or within 24 months after the consummation of this offering if a letter of intent or definitive agreement relating to a prospective business combination was entered into prior to the end of the 18-month period.
Terms Under a Rule 419 Offering: If a acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow account would be returned to investors.
Release of funds
Terms of Our Offering: The proceeds held in the trust account will not be released until the earlier of the completion of a business combination or our liquidation upon failure to effect a business combination within the allotted time.
Terms Under a Rule 419 Offering: The proceeds held in the escrow account would not be released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time. |
