Business Context and Reporting Period
This Form 8-K reports the consummation of the Initial Public Offering (IPO) by Hydra Industries Acquisition Corp. (the "Company"), a special purpose acquisition company. The report covers events occurring between October 24, 2014, when the registration statement was declared effective, and October 29, 2014, when the IPO closed. The Company is incorporated in Delaware and is seeking an initial business combination.
Key Financial Metrics
- IPO Proceeds: The Company sold 8,000,000 Units at $10.00 per Unit, generating gross proceeds of $80,000,000.
- Private Placement Proceeds: Simultaneously, the Company sold 7,500,000 Placement Warrants at $0.50 per warrant, generating $3,750,000.
- Total Capital Raised: $83,750,000 (gross).
- Liquidity and Trust Account: $80,000,000 of the net proceeds were deposited into a trust account at JP Morgan Chase Bank, N.A., to be held for public stockholders.
- Over-Allotment Option: Underwriters were granted a 45-day option to purchase up to 1,200,000 additional units.
- Operating Metrics: The filing does not provide revenue, profit, cash flow, or margin data as the Company is a pre-operational shell entity.
Material Changes
The primary material change is the transition from a private entity to a publicly traded company following the IPO. The Company entered into multiple definitive agreements, including an Underwriting Agreement with UBS Securities LLC, an Investment Management Trust Agreement, and various agreements with sponsors and security holders. The Company also filed an Amended and Restated Certificate of Incorporation.
Outlook, Risks, and Contingencies
- Business Combination Deadline: The Company has 24 months from the closing of the IPO to consummate an initial business combination.
- Redemption Risk: If the Company fails to complete a business combination within the 24-month period, the funds in the trust account (excluding interest used for taxes) will be used to redeem 100% of the Common Stock issued in the IPO.
- Warrant Terms: Public Warrants allow the purchase of one-half share at $5.75 per half share ($11.50 per whole share). Placement Warrants have similar terms but are not subject to redemption if held by original holders and may be exercised on a cashless basis.
- Use of Funds: Funds in the trust account are restricted and cannot be withdrawn except for taxes on interest income until a business combination is completed or the trust is liquidated.
Investor Verification Checklist
- Verify the final number of Units sold, including any exercise of the 1,200,000 over-allotment option.
- Confirm the exact amount of underwriting discounts and commissions deducted from the gross proceeds to determine net cash available for operations outside the trust.
- Review the specific terms of the "Contingent Forward Purchase Contract" and "Agreement Among Sponsors" to understand sponsor commitments.
- Monitor the 24-month timeline for the initial business combination to assess redemption risk.
- Check subsequent filings for the status of the trust account and any interest earnings.