We do not own any real estate or other physical properties materially important to our operation. Our executive office is located at 3601 N Interstate 10 Service Rd W, Metairie, LA 70002. Such facility is provided by our sponsor at a monthly charge of $10,000.
References to the “Company,” “our,” “us” or “we” refer to Tiberius Acquisition Corporation. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
We are a blank check company incorporated as a Delaware corporation on November 18, 2015 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our initial Business Combination using cash from the proceeds of our Public Offering and the Private Placement that occurred simultaneously with the consummation of the Public Offering, the forward purchase contracts, our capital stock, debt or a combination of cash, stock and debt.
The issuance of additional shares of our stock in a business combination:
☐ may adversely affect prevailing market prices for our units, common stock and/or warrants. Similarly, if we issue debt securities, it could result in:
☐ default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;
☐ our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
☐ limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
As indicated in the accompanying financial statements, at December 31, 2019, we had $78,697 in cash outside of the Trust Account. We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial Business Combination will be successful.
Our entire activity through March 15, 2018, consisted of formation and preparation for the Public Offering. Since the Public Offering, our activity has been limited to the evaluation of business combination candidates, including International General Insurance Holdings Ltd., and we have not and will not be generating any operating revenues until the closing of our initial business combination. We generate non-operating income in the form of interest on marketable securities held in the trust account. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence and transaction expenses.
For the year ended December 31, 2019, we had net income of $1,937,205, which consists of operating costs of $1,361,167 and a provision for income taxes of $651,500, offset by interest income of $3,854,255, and an unrealized gain on marketable securities held in our Trust Account of $95,617.
Until the consummation of the Public Offering, our only sources of liquidity were an initial purchase of Founder Shares for $25,000 by the Sponsor, and a total of $319,540 of loans and advances by the Sponsor.
On March 20, 2018, we consummated our Public Offering in which we sold 15,000,000 Units at a price of $10.00 per Unit generating gross proceeds of $150,000,000 before underwriting fees and expenses. The Sponsor purchased 4,500,000 Placement Warrants at a price of $1.00 per Placement Warrant in a Private Placement that occurred simultaneously with the Public Offering. The Sponsor provided a loan in the amount of $1,500,000 that occurred simultaneously with the Public Offering.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to (other than the Sponsor’s commitment described below), loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts (including accrued interest, if any). In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $2,000,000 of such loans (which may include the Sponsor Loan) may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The Sponsor Loan warrants would be identical to the Placement Warrants and would be identical to the public warrants, except that they would not be redeemable by us and would be exercisable on a cashless basis. In addition, our Sponsor has committed to provide us with up to an aggregate of $1,000,000 in loans to fund our working capital requirements. In August 2019, we issued an unsecured promissory note in the amount of $1,000,000 to our Sponsor. As of December 31, 2019, we borrowed $500,000 under such note for working capital purposes. The note bears no interest and is repayable in full upon the earlier of consummation of the Company’s initial business combination and its winding up. The note may be converted into Warrants at a conversion price of $1.00 per Warrant at the Sponsor’s discretion. However, the lender is no longer entitled to conversion rights in the event the loan is repaid in cash prior to conversion.
At December 31, 2019 and 2018, we did not have any capital lease obligations or operating lease obligations.
The Underwriter was paid a cash underwriting fee of 2% of gross proceeds of the Public Offering, excluding any amounts raised pursuant to the overallotment option, or $3,000,000. In addition, the Underwriter is entitled to aggregate deferred underwriting commissions of $7,350,000 consisting of (i) 4% of the gross proceeds of the Public Offering, excluding any amounts raised pursuant to the overallotment option, and (ii) 6% of the gross proceeds of the Units sold in the Public Offering pursuant to the overallotment option. The deferred underwriting commissions will become payable to the Underwriter from the amounts held in the Trust Account solely in the event that the Company completes an initial Business Combination, subject to the terms of the underwriting agreement. Simultaneously with the execution of the Business Combination Agreement on October 10, 2019, Tiberius and Cantor Fitzgerald & Co. (“Cantor”) entered into an amendment (the “Underwriting Agreement Amendment”) to the Underwriting Agreement, dated as March 15, 2018 (the “Underwriting Agreement”), by and between Tiberius, Cantor and the other underwriters named therein. Pursuant to the Underwriting Agreement Amendment, Cantor agreed to accept payment of the deferred underwriting commission payable to Cantor under Section 1.3 of the Underwriting Agreement in Pubco common shares (the “Deferred Commission Shares”), valued at $10.20 per Pubco common share, if and solely to the extent that Tiberius would otherwise not meet the Minimum Cash Condition (treating such issuance of Deferred Commission Shares to Cantor as an equity financing for purposes thereof) after giving effect to any Backstop Subscription Agreements. The payment in Deferred Commission Shares under the Underwriting Agreement Amendment is conditioned on the concurrent Closing and other customary closing conditions consistent with the conditions under the Subscription Agreements. Cantor was also given registration rights with respect to any Deferred Commission Shares pursuant to which Pubco, as the successor to Tiberius will be required to file a resale registration statement for the Deferred Commission Shares issued to Cantor within 30 days after the Closing and use its commercially reasonable efforts to have the registration statement declared effective as soon as practicable after the filing thereof. The proceeds from the issuance of the Deferred Commission Shares instead of the cash payment required under the Underwriting Agreement will be used to fund a portion of the cash consideration for the Business Combination, the transaction expenses and other liabilities of Tiberius and otherwise provide working capital and funds for corporate purposes to Pubco after the Closing.
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. The Company has identified the following as its critical accounting policies:
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
Reference is made to Pages through comprising a portion of this Annual Report on Form 10-K.