Business Context and Reporting Period
The filing is a Form 10-Q for the quarter ended March 31, 2020, filed by Apex Technology Acquisition Corporation, not AvePoint, Inc. Apex was a newly formed blank-check company focused on identifying a business combination, principally in the software and internet technology sectors. It had not commenced operating activities or generated operating revenue.
The financial statements are unaudited and cover the three months ended March 31, 2020. Apex completed its initial public offering in September 2019 and remained a shell company as of the reporting date.
Key Financial Metrics
| Metric | March 31, 2020 / Three Months Ended |
|---|---|
| Operating revenue | None |
| Interest income | $1.452 million |
| General and administrative expense | $194,283 |
| Franchise tax expense | $50,000 |
| Income tax provision | $392,446 |
| Net income | $815,685 |
| Net income per redeemable Class A share | $0.03 |
| Net loss per non-redeemable Class A and Class B share | $(0.02) |
| Net cash used in operating activities | $382,908 |
| Cash outside Trust Account | $760,645 |
| Trust Account investments | $353.113 million |
| Total assets | $354.098 million |
| Total liabilities | $14.063 million |
| Deferred underwriting commissions | $13.150 million |
| Long-term debt | None reported |
Margins are not meaningful because the company had no operating revenue. Net income was generated primarily by interest earned on Trust Account investments rather than business operations. Liquidity consisted principally of $760,645 held outside the Trust Account for working capital; Trust Account funds were generally restricted to a business combination, redemptions, or permitted tax payments.
Material Changes Versus the Prior Comparable Period
- The filing does not provide a comparative prior-year first-quarter statement of operations or cash flows.
- Compared with December 31, 2019, cash outside the Trust Account decreased from $994,810 to $760,645.
- Trust Account assets increased from $351.809 million to $353.113 million, primarily reflecting investment income, partially offset by a $148,743 withdrawal to pay franchise taxes.
- Common stock subject to possible redemption increased from $334.219 million to $335.035 million.
- Total current liabilities increased from $618,244 to $913,126, primarily because income taxes payable increased to $857,147.
- Stockholders’ equity remained substantially unchanged at approximately $5.0 million.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- Management provided no operating or financial guidance. It expected to continue incurring costs while identifying, evaluating, and negotiating a business combination.
- Apex was required to complete a business combination by September 19, 2021. If it failed to do so, it would cease operations, redeem the public shares using the Trust Account, and liquidate, subject to applicable law.
- Public stockholders had redemption rights in connection with a business combination. The Sponsor waived redemption and liquidation rights for its Founder Shares and Placement Shares.
- The $13.150 million deferred underwriting commission would become payable from the Trust Account only if a business combination were completed.
- COVID-19 was identified as a material uncertainty that could impair the search for a target or delay or prevent completion of a business combination. The filing states that the specific financial impact was not determinable as of the reporting date.
- The company had no legal proceedings, no off-balance-sheet financing arrangements, and no outstanding working-capital borrowings at March 31, 2020.
- The company paid an affiliate of the Sponsor $45,000 during the quarter under a $15,000-per-month administrative support agreement.
- The public warrants had an exercise price of $11.50 per share and could expire worthless if no business combination occurred.
Important Facts for Investors to Verify
- Verify the issuer identity: the supplied filing is for Apex Technology Acquisition Corporation, while the request identifies AvePoint, Inc.
- Verify the status and terms of any business combination, including transaction timing, target valuation, financing, and shareholder redemptions.
- Verify the amount of Trust Account funds available after deferred underwriting commissions, taxes, transaction expenses, and redemptions.
- Assess whether the $760,645 of unrestricted cash was sufficient to fund operations through the business-combination deadline or whether Sponsor working-capital financing would be required.
- Review the effects of COVID-19 and market conditions on the company’s ability to identify and complete a transaction.
- Review potential dilution from Founder Shares, Placement Units, public warrants, and any additional securities or debt issued in a business combination.