Business Context and Reporting Period
This unaudited Form 10-Q covers the quarterly period ended September 30, 2019. The filing is by Apex Technology Acquisition Corporation, not AvePoint, Inc. Apex was incorporated on April 5, 2019 and operated as a blank-check company seeking a merger, acquisition, or similar business combination, with an intended focus on software and internet technology companies. It had not commenced operating activities or generated operating revenue.
The company completed its initial public offering on September 19, 2019 and remained a shell company as of the filing date.
Key Financial Metrics
| Metric | Three months ended September 30, 2019 | Period from inception through September 30, 2019 |
|---|---|---|
| Operating revenue | $0 | $0 |
| General and administrative expense | $31,507 | $32,507 |
| Franchise tax expense | $100,000 | $100,000 |
| Interest income | $177,344 | $177,344 |
| Net income | $29,595 | $28,595 |
| Cash used in operating activities | Not separately presented | $229,700 |
- Cash outside the Trust Account was $1.24 million at September 30, 2019.
- The Trust Account held $350.18 million in cash and marketable securities, including $350.08 million of U.S. Treasury bills at amortized cost.
- Total assets were $351.63 million, including $333.35 million of Class A common stock subject to possible redemption.
- Total liabilities were $13.28 million, including $13.15 million of deferred underwriting commissions.
- Stockholders’ equity was $5.00 million. The company had no long-term debt or capital lease obligations.
- The company’s effective income tax rate was approximately 36%, primarily because start-up costs were generally not currently deductible.
Material Changes and Financing Activity
- The company raised $350.0 million through the sale of 35.0 million public units at $10.00 per unit, including a partial exercise of the underwriters’ over-allotment option.
- It raised an additional $8.1 million through the sale of 810,000 private placement units.
- $350.0 million was deposited into the Trust Account for a future business combination or liquidation.
- Offering and transaction costs totaled $19.81 million, consisting of $6.10 million of paid underwriting fees, $13.15 million of deferred underwriting fees, and $556,442 of other offering costs.
- The prior comparable operating period was not available because the company was formed on April 5, 2019; substantially all reported activity relates to formation and the September 2019 offering.
- The Sponsor’s $275,000 promissory note was repaid at the IPO closing.
Guidance, Outlook, Risks, and Unusual Items
- Management expected no operating revenue until after completion of an initial business combination and expected to continue incurring acquisition-related and public-company costs.
- The company had until September 19, 2021 to complete a business combination. If unsuccessful, it would cease operations, redeem public shares using the Trust Account, and liquidate.
- Public stockholders generally had redemption rights for a pro rata portion of the Trust Account in connection with a business combination or liquidation.
- There was no assurance that a suitable business combination would be completed. The company was required to target a transaction or transactions with aggregate fair market value of at least 80% of Trust Account assets, subject to stated exclusions.
- Potential business combination financing could involve additional equity issuance or debt, creating dilution, leverage, subordination, or control risks.
- The Sponsor or affiliates could provide working-capital loans, with up to $1.5 million potentially convertible into units if a business combination occurs.
- The company paid an affiliate of the Sponsor $15,000 per month for office space, utilities, and administrative support beginning September 16, 2019.
- Public and private warrants generally had an exercise price of $11.50 per share and could expire worthless if no business combination occurred.
- The company reported no legal proceedings, no material changes to previously disclosed risk factors, and no subsequent events requiring adjustment or disclosure.
- Management assessed disclosure controls and procedures as effective and reported no material change in internal control over financial reporting.
Facts Investors Should Verify
- Verify the issuer identity: the supplied filing is for Apex Technology Acquisition Corporation, while the request identifies AvePoint, Inc.
- Confirm whether a business combination was completed by the September 19, 2021 deadline and how the Trust Account and public shares were ultimately handled.
- Review redemption levels, the deferred $13.15 million underwriting commission, and the per-share liquidation or redemption amount.
- Assess dilution from founder shares, private placement units, warrants, and any subsequent financing or working-capital loans.
- Review the company’s prospectus and later SEC filings for the selected target, transaction terms, changes in risk factors, and use of Trust Account proceeds.