ROTH CH ACQUISITION CO. References to "TKB," "our," "us" or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We have based these forward-looking statements on
our current expectations and projections about future events. These
forward-looking statements are subject to known and unknown risks, uncertainties
and assumptions about us that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," and "continue," or the negative of
such terms or other similar expressions. Such statements include, but are not
limited to, possible business combinations and the financing thereof, and
related matters, as well as all other statements other than statements of
historical fact included in this Form 10-Q. Factors that might cause or
contribute to such a discrepancy include, but are not limited to, those
described in our other
Overview
We are a blank check company incorporated as a
The issuance of additional shares in connection with a business combination to the owners of the target or other investors, including pursuant to the forward purchase agreements:
? may significantly dilute the equity interest of investors in our IPO, which
dilution would increase if the anti-dilution provisions in the Class B
ordinary shares resulted in the issuance of Class A ordinary shares on a
greater than one-to-one basis upon conversion of the Class B ordinary shares;
? may subordinate the rights of holders of Class A ordinary shares if preference
shares are issued with rights senior to those afforded our Class A ordinary
shares;
? could cause a change in control if a substantial number of Class A ordinary
shares are 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;
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? may have the effect of delaying or preventing a change of control of us by
diluting the share ownership or voting rights of a person seeking to obtain
control of us; and
? may adversely affect prevailing market prices for our Class A ordinary shares
and/or warrants.
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
? default and foreclosure on the combined company's assets if its operating
revenues after the initial Business Combination are insufficient to repay
TKB's debt obligations assumed by the combined company;
? 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 Class A ordinary shares;
? 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 Class A
ordinary shares 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.
We expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from
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For the three months ended
For the nine months ended
For the three months ended
Liquidity and Capital Resources; Going Concern
Until the consummation of our IPO, our only source of liquidity was an initial
purchase of Class B ordinary shares ("Founder Shares") by our sponsor,
On
Simultaneously with the closing of the IPO, the Company completed the private
sale of an aggregate of 10,750,000 warrants to our sponsor at a purchase price
of
A total of
Transaction costs of the IPO amounted to
For the nine months ended
For the period from
As of
As of
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We expect that we will need to raise additional funds in order to meet the
expenditures required for operating our business prior to our initial business
combination. We expect to incur significant costs related to identifying a
target business, undertaking in-depth due diligence and negotiating an initial
business combination. These conditions raise substantial doubt about the
Company's ability to continue as a going concern for a period of time within one
year from the date that the financial statements are issued. In order to fund
working capital deficiencies or finance transaction costs in connection with an
intended initial business combination, our sponsor or an affiliate of our
sponsor or certain of our officers and directors may, but are not obligated to,
loan us funds as may be required. If we complete our initial business
combination, we will repay such loaned amounts. In the event that our initial
business combination does not close, we may use a portion of the working capital
held outside the trust account to repay such loaned amounts but no proceeds from
our trust account would be used for such repayment. Up to
The Company's assessed going concern considerations in accordance with Financial
Accounting Standard Board's Accounting Standards Codification ("ASC") Topic
205-40. "Basis of Presentation - Going Concern". The Company has until
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or other long-term liabilities, other than described below.
We have an agreement to pay our sponsor a monthly fee of
The underwriters of the IPO are entitled to a deferred fee
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Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in
Warrant Liabilities
The Company accounts for the warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 48, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements from equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgement, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. See Note 9 for valuation methodology of warrants.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Ordinary shares subject to
mandatory redemption are classified as a liability instrument and are measured
at fair value. Conditionally redeemable ordinary shares (including ordinary
shares 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, ordinary shares are classified as shareholders' deficit. The
Company's ordinary shares feature certain redemption rights that are considered
to be outside of the Company's control and subject to occurrence of uncertain
future events. Accordingly, at
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
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Net Income (loss) Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC
Topic 260, "Earnings Per Share". Net income (loss) per ordinary share is
computed by dividing net income (loss) by the weighted average number of
ordinary shares outstanding for the period. The Company has two classes of
ordinary shares, which are referred to as Class A ordinary shares and Class B
ordinary shares. Income and losses are shared pro rata between the two classes
of ordinary shares. Accretion associated with the redeemable Class A ordinary
shares is excluded from earnings per share as the redemption value approximates
fair value. The calculation of diluted income (loss) per share does not consider
the effect of the warrants issued in connection with the (i) IPO and (ii) the
private placement since the exercise of the warrants is contingent upon the
occurrence of future events. The warrants are exercisable to purchase 22,250,000
Class A ordinary shares in the aggregate. As of
Recent Accounting Standards
In
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 the Company's financial statements.
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