The staff of the SEC issued two statements this week relating to SPACs, a JDSupra contributor reports. Neither statement provided any guidance or interpretation. Both seemed directed at emphasizing existing regulations.
The first statement from the Staff of the Division of Corporation Finance noted a series of considerations that private companies should take into account before entering into an initial business combination with a SPAC. The statement highlighted some of the securities law concerns that are well understood by practitioners, including the fact that the combined company would be considered an “ineligible issuer.”
The second statement was issued by the Office of the Chief Accountant. This statement also is directed at private companies, their boards of directors and audit committees. The statement notes that, “[a] merger with a SPAC may also raise unique challenges for a private target company seeking to become a publicly-traded company.” Read more.
