Business context and reporting period
The supplied filing is CF Acquisition Corp. VI’s unaudited Form 10-Q for the quarter ended March 31, 2021—not a filing identified as RUM Group Inc. CF Acquisition Corp. VI was a shell company/SPAC formed to pursue a business combination, focused on financial services, healthcare, real estate services, technology, and software. It completed its IPO on February 23, 2021 and had not begun operating or generated operating revenue.
Key financial metrics
- Revenue and margins: No operating revenue; margins are not meaningful for this pre-combination SPAC.
- Net loss: $3.17 million for the quarter, comprising $185,484 operating loss and $2.99 million in losses from fair-value changes in warrant and forward-purchase liabilities, partly offset by $411 of trust-account interest.
- Cash flow: Operating cash flow was reported as zero. Investing cash flow was negative $300 million as funds were deposited in trust; financing cash flow was positive $300 million. Quarter-end operating cash was $25,000.
- Liquidity: Trust assets were $300.0 million, largely restricted pending a business combination or liquidation. Working-capital deficit was $163,899, versus $157,099 at December 31, 2020.
- Liabilities and equity: Total liabilities were $13.24 million, including a $647,795 sponsor loan, $9.73 million warrant liability, and $2.79 million forward-purchase securities liability. Stockholders’ equity was $5.00 million; 28.27 million public Class A shares, or $282.74 million at redemption value, were classified as temporary equity.
Changes versus the prior comparable period
The filing presents no prior-year-quarter income-statement or cash-flow comparison. Versus December 31, 2020, the company completed its IPO and private placement, funded the $300 million trust account, and recognized warrant and forward-purchase liabilities. The working-capital deficit widened by approximately $6,800, while operating cash remained $25,000.
Outlook, risks, and unusual items
- The company had until February 23, 2023, subject to a permitted extension, to complete a business combination; otherwise it must wind up and redeem public shares from the trust, subject to applicable requirements. Management said sponsor borrowing capacity and working capital should be sufficient through a combination or one year from the report date.
- The sponsor committed up to $1.75 million in loans; $647,795 was outstanding at quarter-end. The filing also discloses a $10.5 million marketing fee payable to Cantor Fitzgerald & Co. upon completion of a business combination.
- Warrants and forward-purchase securities are derivative liabilities measured at fair value. Their remeasurement caused most of the quarterly loss and may produce material, non-cash earnings volatility.
- The company corrected previously reported accounting for warrants and forward-purchase securities, increasing liabilities and changing related equity and redemption classifications. Management concluded disclosure controls were ineffective due to a material weakness related to this accounting change.
- Management noted that COVID-19 could affect the company’s financial position or target search, but the impact was not determinable. The filing reported no legal proceedings and no material change to previously disclosed risk factors beyond the warrant/FPS accounting risk.
Important facts for investors to verify
- Confirm the issuer: the provided document is for CF Acquisition Corp. VI, not RUM Group Inc.
- Review the warrant and forward-purchase valuation assumptions and the resulting potential non-cash earnings volatility.
- Verify the status and terms of sponsor funding, available operating cash, and the business-combination deadline.
- Assess the material weakness, remediation progress, and any subsequent accounting or reporting changes.
- Confirm the transaction-related fees and redemption terms, including the $10.5 million marketing fee and public-share redemption rights.