Filing summary
Important entity mismatch: The supplied filing is B. Riley Principal Merger Corp.’s Form 10-Q for the quarter ended March 31, 2019—not an Alta Equipment Group Inc. filing. The summary below reflects the filing provided.
Business context and reporting period
B. Riley Principal Merger Corp. was a blank-check company formed to pursue a merger or similar business combination. It reported no operating activity or revenue through March 31, 2019. Its initial public offering closed after quarter-end, on April 11, 2019, with the underwriters’ overallotment closing April 12.
Financial results and liquidity
- For the three months ended March 31, 2019, the company reported a net loss of $1,021, compared with a net loss of $800 in the prior-year quarter. The loss per share was reported as $0.00, rounded.
- Cash was $31,665 at March 31, 2019, down from $49,658 at December 31, 2018. The company reported a working capital deficit of $382,064.
- Total assets were $404,087, including $372,422 of deferred offering costs. Total liabilities were $413,729, including $337,500 of accounts payable and $67,950 owed under a related-party note.
- Operating cash use was $1,021; financing cash use was $16,972. The company had no revenue, reported no margins, and had no long-term debt or lease obligations at quarter-end.
Material changes, outlook and risks
- After quarter-end, the IPO raised $143.75 million in gross proceeds, including the overallotment; private placement units raised an additional $4.625 million. The company placed $143.75 million in its trust account and repaid the $67,950 sponsor note.
- The company expected to fund operating needs from offering proceeds but cautioned that higher-than-estimated target search, due diligence or transaction costs could leave it short of funds. It could seek additional financing to complete a combination or address substantial shareholder redemptions.
- The company had 18 months from the IPO closing to complete a business combination or redeem public shares and liquidate. Completion was not assured. Trust funds were generally restricted until a business combination, specified redemption event or liquidation; creditor claims could take priority over public stockholders’ claims.
- Affiliated-party arrangements include $10,000 monthly administrative fees and a business-combination advisory fee of 3.5% of IPO gross proceeds, payable only if a transaction closes. A separate forward purchase agreement provides for an affiliate’s purchase of $25 million of units at a business-combination closing.
- Management reported effective disclosure controls and no material change in internal control during the quarter. It reported no legal proceedings and no material changes to the prospectus risk factors.
Important facts to verify
- Confirm the intended company: the supplied 10-Q names B. Riley Principal Merger Corp., not Alta Equipment Group Inc.
- Verify post-quarter IPO proceeds, trust-account balance and repayment of the sponsor note against subsequent filings.
- Review the prospectus risk factors, redemption terms and 18-month business-combination deadline.
- Assess related-party fees and the affiliate forward purchase agreement when evaluating transaction costs and potential conflicts.