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To embed, copy and paste the code into your website or blog: SPACs — short for "special purpose acquisition companies" — recently have drawn significant interest by companies and executives as a more seamless method to conduct an initial public offering. Often referred to as "blank check" companies, SPACs provide a vehicle by which companies may raise funds from public markets through initial public offerings (IPOs) that take a company from private to publicly listed. Unlike traditional IPOs, which often involve private companies that have developed over time, SPACs are shell companies wh...

To embed, copy and paste the code into your website or blog: One of the hottest going-public trends in 2020 and 2021 has been the rise of SPACs – Special Purpose Acquisition Companies – as a vehicle for private companies to go public. SPACs are shell companies that are formed, funded and taken public for the purpose of later acquiring an operating company. By merging with a SPAC, the private company effects a reverse takeover, inheriting the SPAC’s existing cash and taking over its management. SPAC mergers have quickly increased from being occasional to outpacing the number of tradition...

Monday, April 5, 2021 Not far behind the dramatic increase in the use of special purpose acquisition companies (SPACs) is a corresponding increase in the number of shareholder lawsuits and increased activity at the US Securities and Exchange Commission (SEC). In recent days, Reuters reported that the SEC opened an inquiry seeking information on how underwriters are managing the risks involved in SPACs, [i] and the SEC’s Division of Corporation Finance (Corp Fin) and acting chief accountant have issued two separate public statements on certain accounting, financial reporting and g...

SEC Warns SPAC Targets the Road May be Difficult By April 1, 2021 The SEC issued two pieces of guidance on special purpose acquisition companies, or SPACs.  One piece, styled as a statement by Paul Munter, Acting Chief Accountant, speaks to financial reporting and auditing considerations of companies merging with SPACs.  The other statement, issued by the Division of Corporation Finance, is labeled “Staff Statement on Select Issues Pertaining to Special Purpose Acquisition Companies.” As to financial reporting and auditing matters the SEC notes, among other things: Companies acquir...