HEARTLAND MEDIA ACQUISITION CORP. Overview
We are a newly formed blank check company incorporated as a
The issuance of additional shares of our stock in connection with our initial business combination:
• may significantly dilute the equity interest of our existing investors, which
dilution would increase if the anti-dilution provisions in the founder shares resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the founder shares;
• may subordinate the rights of holders of our common stock if preferred stock is
issued with rights senior to those afforded our common stock;
• could cause a change in control if a substantial number of shares of our common
stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
• may have the effect of delaying or preventing a change of control of us by
diluting the stock ownership or voting rights of a person seeking to obtain control of us;
• may adversely affect prevailing market prices for our units, Class A common
stock and/or warrants; and
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• may not result in adjustment to the exercise price of our warrants.
Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:
• default and foreclosure on our assets if our operating revenues after an
initial business combination are insufficient to repay our debt obligations;
• acceleration of our obligations to repay the indebtedness even if we make all
principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
• our immediate payment of all principal and accrued interest, if any, if the
debt is payable on demand;
• our inability to obtain necessary additional financing if the debt contains
covenants restricting our ability to obtain such financing while the debt is outstanding;
• our inability to pay dividends on our common stock;
• using a substantial portion of our cash flow to pay principal and interest on
our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
• limitations on our flexibility in planning for and reacting to changes in our
business and in the industry in which we operate;
• increased vulnerability to adverse changes in general economic, industry and
competitive conditions and adverse changes in government regulation; and
• limitations on our ability to borrow additional amounts for expenses, capital
expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. Results of Operations
Our entire activity since inception through
For the period from
Liquidity and Capital Resources
As of
Subsequent to the annual period covered by this Annual Report, we consummated
the IPO and private placement. Of the net proceeds from the sale of the units
and private placement warrants,
In order to fund working capital deficiencies or finance transaction costs in
connection with an intended initial business combination, the sponsor or an
affiliate of the sponsor or certain of our officers and directors may, but are
not obligated to, loan us working capital loans. As of
Based on the foregoing, management believes that we have alleviated the substantial doubt about our ability to continue as a going concern and has sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds to pay existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.
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Table of Contents Related Party Transactions Founder Shares
On
The initial stockholders have agreed not to transfer, assign or sell any of
their founder shares until the earlier to occur of: (A) one year after the
completion of the initial business combination; or (B) the date on which we
complete a liquidation, merger, capital stock exchange, reorganization or other
similar transaction after the initial business combination that results in all
of the stockholders having the right to exchange their shares of common stock
for cash, securities or other property. Any permitted transferees would be
subject to the same restrictions and other agreements of the initial
stockholders with respect to any founder shares (the "Lock-up"). Notwithstanding
the foregoing, if the last reported sale price of the Class A common stock
equals or exceeds
Our sponsor agreed to loan us up to
As of
Related Party Loans
In order to fund working capital deficiencies or finance transaction costs in
connection with an intended initial business combination, the sponsor or an
affiliate of the sponsor or certain of our officers and directors may, but are
not obligated to, loan us funds as may be required (the "Working Capital
Loans"). If we complete the initial business combination, we may repay the
Working Capital Loans out of the proceeds of the trust account released to us.
Otherwise, such loans may be repaid only out of funds held outside the trust
account. Up to
Administrative Support Agreement
We pay an affiliate of the sponsor a total of
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Off-balance Sheet Arrangements
As of
Critical Accounting Estimates
Our management's discussion and analysis of our financial condition and results
of operations is based on our consolidated financial statements, which have been
prepared in accordance with
Our significant accounting policies are fully described in Note 2 to our financial statements appearing elsewhere in this Annual Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.
Recent Accounting Pronouncements
In
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
JOBS Act
On
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company", we choose to rely on such exemptions we may not be required to, among other things: (1) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (3) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (4) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.
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