Form 10-Q NightDragon Acquisition By: March 31

In addition, statements in which “we believe” and similar statements reflect our beliefs and opinions on the matter concerned. These statements are based on information available to us as of the date of this report, and while we believe that such information provides a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read. as indicating that we have conducted a thorough investigation or review of all relevant information potentially available. These statements are inherently uncertain, and you are cautioned not to place undue reliance on such statements.

Overview

We are a blank check company incorporated under the laws of the State of Delaware on December 8, 2020 for the purpose of effecting a merger, stock exchange, acquisition of assets, purchase of shares, reorganization or any other similar business combination with one or more businesses. We intend to complete our business combination by using the cash generated from the proceeds of the initial public offering and the sale of the SCALE private placement units, our share capital, our debt or our a combination of cash, stocks and debt.

We expect to continue to incur significant costs in pursuing our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.

Results of operations

We have not engaged in any activity or generated any income to date. Our only activities from December 8, 2020 (creation) to March 31, 2021 were organizational activities, those necessary for the preparation of the initial public offer, described below, and the identification of a target company for a merger of companies. We do not expect to generate any revenue until the completion of our business combination. We generate not operational in the form of interest income on marketable securities held in the trust account. We incur expenses as a result of our public company status (for legal, financial, accounting and auditing compliance), as well as for due diligence expenses.

For the quarter ended March 31, 2021, we recorded a net loss of $ 1,333,304, which includes operating expenses of $ 121,235, a change in the fair value of warrant liabilities of $ 638,925 and transaction costs associated with the initial public offering of $ 579,585, offset by interest income. on marketable securities held in the trust account of $ 6,441.

Liquidity and capital resources

On March 4, 2021, we completed the initial public offering of 34,500,000 SCALE (Stakeholder-Centered Aligned Listed Equity) shares, which includes the full exercise by the underwriter of its over-allotment option for an amount of 4,500,000 SCALE Units, priced at $ 10.00 per SCALE Unit, generating gross proceeds of $ 345,000,000. Concurrently with the closing of the initial public offering, we completed the sale of 1,035,000 SCALE private placement units at a price of $ 10.00 per SCALE private placement unit in a private placement to NightDragon Acquisition Sponsor, LLC, generating gross proceeds of $ 10,350,000.

Following the initial public offering, the full exercise of the over-allotment option and the sale of the units of the SCALE private placement, a total of $ 345,000,000 has been placed in the trust account. We incurred $ 19,601,538 in costs related to the initial public offering, including $ 6,900,000 in bought deal costs, $ 12,075,000 in deferred bought deal costs and $ 626,538 in other offering costs. .

For the quarter ended March 31, 2021, cash flow from operating activities amounted to $ 1,282,639. The net loss of $ 1,333,304 was impacted by the change in the fair value of the liability related to the warrants of $ 638,925, the transaction costs associated with the initial public offering of $ 579,585 and interest. accounts payable on marketable securities held in the trust account of $ 6,441. Changes in operating assets and liabilities used $ 1,161,404 of cash for operating activities.

As at March 31, 2021, we held marketable securities held in the trust account in the amount of $ 345,006,441 (including approximately $ 6,400 of interest income) consisting of US Treasury bills with a maturity of 185 days or less. Interest income on the trust account balance may be used by us to pay taxes. Until March 31, 2021, we did not withdraw any interest earned on the trust account.

We intend to use substantially all of the funds held in the trust account, including any amount representing interest earned on the trust account (less taxes payable), to complete our business combination. To the extent that our share capital or debt is used, in whole or in part, in consideration for the completion of our business combination, the remaining proceeds held in the trust account will be used as working capital to fund operations. of the target company or companies. , make other acquisitions and pursue our growth strategies.

As of March 31, 2021, we had $ 1,982,144 in cash. We intend to use funds held outside the trust account primarily to identify and assess target businesses, conduct due diligence on potential target businesses, travel to and from offices, factories or similar locations of target businesses. potential target companies or their representatives or owners, review corporate documents and material agreements of potential target companies, and structure, negotiate and complete a business combination.

In order to fill working capital shortfalls or finance transaction costs in a business combination, the Limited Partner, or certain of our officers and directors or their affiliates may, but are not obligated to, lend to us funds as needed. If we carry out a Business Combination, we will reimburse these amounts loaned. In the event that a business combination is not concluded, we may use part of the working capital held outside the trust account to repay the amounts loaned, but no proceeds from our trust account would be used for this repayment. . Up to $ 1,500,000 of these loans may be convertible into SCALE units at a price of $ 10.00 per SCALE unit, at the option of the lender. The SCALE Units would be identical to the SCALE Private Placement Units.

We do not believe that we need to raise additional funds to cover the expenses necessary to operate our business. However, if our estimate of the costs of identifying a target company, engaging in depth Due diligence and negotiation of a business combination are less than the actual amount required to do so, we may have insufficient funds to operate our business prior to our business combination. In addition, we may need to obtain additional financing either to complete our business combination or because we are obligated to repurchase a significant number of our public shares during the completion of our business combination, in which case. we may issue additional securities or incur debt as part of such business combination.

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