SEC Filing Summary: B. Riley Principal Merger Corp. II (8-K)
Business Context and Reporting Period
This Form 8-K, dated May 22, 2020, reports the consummation of the Initial Public Offering (IPO) by B. Riley Principal Merger Corp. II (the "Company"), a Special Purpose Acquisition Company (SPAC). The reporting period covers the IPO pricing on May 19, 2020, and the closing on May 22, 2020. The Company is an emerging growth company incorporated in Delaware.
Key Financial Metrics
- IPO Gross Proceeds: $175,000,000 from the sale of 17,500,000 Units at $10.00 per Unit.
- Private Placement Proceeds: $6,500,000 from the sale of 650,000 Private Placement Units to the Sponsor at $10.00 per Unit.
- Total Capital Raised: $181,500,000.
- Trust Account Funding: $176,750,000 deposited into a U.S.-based trust account. This includes $171,500,000 from IPO proceeds (net of deferred underwriting fees) and $5,250,000 from Private Placement proceeds.
- Warrant Exercise Price: $11.50 per share.
- Debt and Liquidity: The filing does not disclose outstanding debt or operating cash flow, as the Company is a newly formed shell entity. Liquidity is primarily held in the trust account pending a business combination.
Material Changes and Agreements
The filing details the entry into several material definitive agreements effective May 19, 2020:
- Underwriting Agreement: With B. Riley FBR, Inc. as representative.
- Business Combination Marketing Agreement (BCMA): Includes a deferred fee of $6,125,000 payable upon completion of a business combination.
- Private Placement: Sale of units to the Sponsor with specific restrictions on transferability and redemption.
- Forward Purchase Agreement: Entered into with B. Riley Principal Investments, LLC.
- Corporate Governance: Appointment of four independent directors (Bartels, Kempner, Presutti, Suss) and establishment of Board committees (Audit, Compensation, Nominating).
Outlook, Risks, and Contingencies
- Business Combination Deadline: The Company has 18 months from the IPO closing (May 22, 2020) to complete an initial business combination.
- Redemption Rights: Public shareholders may redeem their shares for a pro-rata portion of the trust account if the Company fails to complete a business combination within the 18-month period or if shareholders vote to amend the charter regarding redemption rights.
- Trust Account Restrictions: Funds in the trust account are generally not accessible until the completion of a business combination, shareholder redemption, or liquidation. Interest earned may be used to pay franchise and income taxes.
- Unusual Items: The Company is a shell entity with no current operations; its sole purpose is to effect a merger with a target business.
Investor Verification Checklist
- Verify the exact amount of cash available in the trust account ($176,750,000) and the terms regarding interest income usage for tax obligations.
- Confirm the 18-month deadline for completing a business combination and the consequences of failure to do so (liquidation and redemption).
- Review the terms of the Forward Purchase Agreement and Private Placement Units to understand the Sponsor's commitment and potential dilution.
- Check the deferred underwriting fee obligation of $6,125,000 payable upon a successful business combination.
- Examine the Second Amended and Restated Certificate of Incorporation for specific provisions regarding shareholder rights and charter amendments.