Filing identity and reporting period
Important: The supplied filing is Aldel Financial Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2021—not a Hagerty, Inc. filing. Aldel was a newly formed blank-check company (SPAC) and had not begun operating by quarter-end. Its stated target focus was businesses emerging from restructuring or with transient current ownership.
Financial results and position
For the three months ended March 31, 2021, Aldel reported no operating revenue and a net loss of $1,140, consisting solely of general and administrative expense. Basic and diluted loss per share was $0.0002. Operating margins are not meaningful for this pre-operational period.
| Metric | March 31, 2021 / Q1 2021 | Prior balance-sheet date |
|---|---|---|
| Cash | $216,267 | $0 |
| Total assets | $338,860 | $55,000 |
| Total liabilities | $316,470 | $56,470 |
| Stockholders’ equity (deficit) | $22,390 | $(1,470) |
| Notes payable | $250,000 | $0 |
Q1 operating cash use was $123,733; financing provided $340,000, resulting in a $216,267 increase in cash. The filing gives no operating cash flow or profitability comparison with Q1 2020; Aldel was incorporated in December 2020. The balance-sheet comparison is with December 31, 2020.
Material developments and outlook
After quarter-end, on April 12, 2021, Aldel completed its IPO of 11.5 million units at $10 each, raising $115 million gross, and private placements generating $5.28 million. It placed $116.15 million in the trust account and reported approximately $1.4 million retained for working capital after trust funding and offering-related payments. The IPO proceeds and these subsequent events are not included in the March 31 balance sheet.
Management expected expenses to increase as a public company and as it evaluates potential transactions. It said it did not expect to need additional funds for ordinary operations, but cautioned that higher-than-expected search and due-diligence costs could leave it short of funds; additional financing might also be needed to complete a business combination or address redemptions. No transaction target or operating guidance was disclosed.
Key terms, risks, and unusual items
- Aldel had until October 12, 2022, subject to possible extension, to complete a business combination. If it failed, public shares would be redeemed from the trust, while warrants could expire worthless.
- Public shareholders may redeem shares in connection with a business combination. The transaction must meet stated trust-asset and control conditions; completion is not assured.
- At quarter-end, $250,000 was outstanding under non-interest-bearing related-party promissory notes, and $65,000 was recorded as other liabilities. The filing describes the notes as payable upon the IPO closing but does not clearly state their post-closing repayment status.
- The sponsor and an affiliated investor forfeited 2.875 million founder shares during Q1. The filing also describes related-party financing, private securities, and a sponsor administrative-services fee of $10,000 per month beginning after the IPO closing.
- Management reported effective disclosure controls as of March 31, 2021. No legal proceedings were reported. As a smaller reporting company, Aldel omitted the market-risk disclosure otherwise applicable to larger filers.
Investor verification points
- Confirm the issuer: this filing is for Aldel Financial Inc., not Hagerty, Inc.
- Review subsequent filings for the disposition of the $250,000 notes and $65,000 other liability, and the company’s actual post-IPO working-capital balance.
- Check later disclosures for a proposed or completed business combination, trust-account changes, extensions, and shareholder redemptions.
- Review the final offering and warrant terms, including dilution, redemption rights, founder-share restrictions, and potential warrant expiration.