Filing summary
Entity mismatch: The supplied filing is FG New America Acquisition Corp.’s Form 10-Q, not an OppFi Inc. filing. It reports the period ended September 30, 2020, from the company’s June 24, 2020 inception. FG New America was a blank-check company intending to pursue a business combination, with a stated focus on financial technology.
Financial results and condition
- Operations: No operating revenue; the company had not commenced operations by September 30. Net loss was $1,000 for both the quarter and inception-to-date, consisting of formation costs. Basic and diluted loss per share was $0.0002.
- Assets and liquidity: Total assets were $1.96 million, including $27,102 cash, $1.61 million deferred offering costs, and $323,237 other deferred expenses.
- Liabilities and equity: Current and total liabilities were $1.93 million, including $1.51 million accrued offering costs, $324,237 accounts payable, and a $100,000 sponsor note. Stockholders’ equity was $29,000.
- Cash flow: Inception-to-date operating cash flow was zero; financing activities provided $27,102, leaving $27,102 cash at period end.
- Margins, debt and operating cash generation: Not meaningful or not reported for this pre-operational company. There was no revenue, and the sponsor note was repaid after quarter-end.
Material developments and outlook
- After quarter-end, the company completed its IPO on October 2, 2020, selling 22.5 million units for gross proceeds of $225 million. Underwriters subsequently bought 1.275 million additional units for $12.75 million on October 14.
- Following the IPO, private placements and partial over-allotment exercise, $243.375 million was placed in trust. The company reported retaining approximately $1.2 million for working capital after offering expenses and directors’ and officers’ insurance.
- Management expected increased public-company, diligence and transaction expenses. It said it did not expect to need additional funds for operations, but cautioned that costs could exceed estimates and additional financing might be needed to complete a business combination or address substantial shareholder redemptions.
- The company had 24 months from the IPO closing to complete a business combination, subject to possible extension. If it failed, public shares generally would be redeemed from the trust and warrants could expire worthless. No specific target, earnings guidance or operating outlook was provided.
- Key risks include failure to complete a business combination, possible negative yields on trust investments reducing redemption value, and creditor claims. Sponsor protection for certain trust shortfalls is subject to exceptions and may not cover claims where waivers prove unenforceable.
- Management reported disclosure controls were effective as of September 30, 2020, with no material change in internal control during the quarter. No legal proceedings were reported.
Most important facts to verify
- Confirm the intended issuer: this filing is for FG New America Acquisition Corp., not OppFi Inc.
- Verify the post-quarter IPO and over-allotment proceeds, trust balance, and working-capital amount against the related subsequent filings.
- Review the business-combination deadline, redemption terms, warrant terms, and risks that trust assets or sponsor indemnification may not fully protect investors.
- Distinguish the September 30 financial position from post-quarter events: IPO proceeds and repayment of the sponsor note occurred after the reporting date.