The per unit purchase price is almost always $10.00. After announcing a letter of intent last week for a potential business combination, BurTech Acquisition today in an 8-K disclosed it has secured non-redemption agreements for 4 million of its shares. Today, consideration must also be given to a de-SPAC transaction in lieu of an IPO. Generally, a SPAC is formed by an experienced management team or a sponsor with nominal invested capital, typically translating into a ~20% interest in the SPAC (commonly known as founder shares). Following the IPO, the units become separable, such that the public can trade units, shares, or whole warrants, with each security separately listed on a securities exchange. Try Now! Exhibit 10.16 . The SPAC is controlled by a "sponsor" management company typically organized as a limited liability company. What Is a Special Purpose Acquisition Company (SPAC)? - Investopedia The warrants essentially dilute any PIPE investors and any equity retained by the seller of the target business. An entity taxed as a partnership can participate in what is known as an UP-SPAC transaction (see discussion below). Being an offshore SPAC may allow for a more efficient structure following the de-SPAC transaction, if foreign assets are acquired. Rushing through the process without the right expertise can put a successful outcome at risk, not to mention loss of funding and reputation of the sponsors. The SPAC creates a transitory merger subsidiary that merges with and into the target, with the target surviving as a subsidiary of the public SPAC. Post-closing, the surviving company will file with the SEC a Super 8-K, to put into the public record any information that was not contained in the proxy statement but that is required to allow affiliates to sell their shares under Rule 144. On June 21, 2002, upon completion of claimant's orientation, he signed and dated an agreement entitled "MAVERICK TRANSPORTATION, INC. Maverick Transportation Orientation. In addition, the private equity manager will likely need to consider how to allocate investment opportunities between the SPAC and existing funds. In addition, SPACs generally have a window of approximately two years or less to find a suitable acquisition target, which can increase competition and drive up the values being offered to target companies. (go back), 3Occasionally, the unit includes a whole warrant to purchase a fraction of a share of common stock, rather than a fraction of a warrant. Repairable, Salvage and Wrecked H&H Trailer Auctions. SPACs are blank-check companies formed by sponsors who believe that their experience and reputations will allow them to identify and complete a business combination transaction with a target company that will ultimately be a successful public company. Even if a shareholder vote is not legally required, the SPAC could elect to put the De-SPAC transaction to a shareholder vote for business reasons. The team will also discuss the industry in which the SPAC intends to seek a target and the growth potential of companies in the industry. The difference is largely mechanical, impacting how the warrants trade and are exercised. In certain circumstances, such as the absence of an effective registration statement covering the common stock issuable upon exercise of the public warrants or at the option of management, the public warrants may also be net settled. The Registered Agent on file for this company is Corporation Guarantee And Trust Company and is located at Rodney Square 1000 North King Street, Wilmington, DE 19801. Registration would be on a Form S-4, and the registration statement would include a combined proxy statement-prospectus. IPO investors focus on the track record of the sponsor, the experience of the management team and the industry in which the SPAC proposes to identify a target.