SPAC is a good instrument for unlisted companies to seek liquidity and raising funds in a short period of time.

1. Why Nasdaq SPAC?
Applico Management Company
Ltd

2. Introduction to SPACs
➢ A “Blank-cheque” company:
▪ “Blind pool” of capital in a Nasdaq-listed company
➢ Created by a “Sponsor”:
▪ Sponsor works with an investment bank to create and list a SPAC
▪ Investors subscribe to listed SPAC shares on IPO
▪ Sponsor puts 5% of amount to be raised by the SPAC (“Seed Capital”) and is granted up to
20% of the SPAC’s equity (“Sponsor’s Equity”)
➢ Sponsor then find target acquire:
▪ Upon acquisition, target takes over listing of SPAC and becomes a listed company, and the
SPAC (including the sponsor) takes minority stake in the merged entity.
A SPAC ALLOW A PRE-IPO COMPANY (TARGET) TO RAISE
PRE-IPO FINANCING AND ACHIEVE A LISTING AT THE SAME TIME
SPAC SPONSOR “RIDES” WITH TARGET (FOR FUTURE UPSIDE) THROUGH MINORITY INTERESTS IN THE MERGED ENTITY
4x Return!
(Need to be earned)

3. Proposed Leverage Acquisition Model
Cash Held in
Trust
US$100M
Target Company/ies
Payment part cash
part shares or all
shares
Listed successor company
Listed SPAC
In US Market
Target Operating
Company/ies
Up to US$400M
US$500M
Publicly Listed
Operating
Company
Blind pool of cash raised by
Financial sponsor through IPO
to acquire a private operating
company
Fully operating private company/ies
Value of Initial Biz combination
must be at least 80% of Cash in
Trust
Value generation through highly
incentivized management
structure
Acquisition typically
within 24 months

4. DE-SPAC – Glove Co
US$100M Nasdaq
listed SPAC
Sponsor US$5M
(17% shares)
Investors US$100M
(80% shares)
2020 New Glove
Companies
US$300M to US$400M
Paid part shares to New
Glove Co existing
shareholders
Paid part cash
Balance as Working Cap
Paid U$30M to U$75M in
CASH Balance as working
capital
Debt / shares
placement
The acquisition can be funded by cash,
Private Placement, debt, shares, or any
combination, depending on deal structure

5. SPAC Provide Liquidity and Risk Management
➢Funding platform listed on Nasdaq:
• Investors invest in private companies through listed SPAC
• Achieve liquidity from the outset
SPAC adheres to investment criteria and industry focus stated in prospectus:
• Investors vote on acquisitions
• Investors also have the right to withdraw capital (but selling SPAC shares is easier)
➢SPACs made a resurgence in 2017:
• Hundreds of SPACs listed on NASDAQ Markets since new SPAC rules in 2011
• SPACs raised US$70 billion in 2020
• A SPAC was listed every day in 2020
• Average SPAC proceeds: US$250 million (Pershing Square Tontine raised US$4.6 billion in 2020)

6. Popularity of SPACs
➢Reasons for popularity:
• Replaces traditional IPOs: quicker, cheaper, surer and less risky way to get listed:
Burger King, DraftKing, Nikola and Virgin Galactic all IPO-ed through a SPAC
Airbnb, Grab, Gojek and Tokopedia have all been approached by SPACs for IPO
• Funding and IPO in one go
• Immediate liquidity for investments in private companies, de-risking early-stage
investments
• Access to transactions globally for investors
• Ease of exit for investors – “money-back” on SPAC’s failure to invest, or simply
sell SPAC shares
• Sponsor puts up Seed Capital; hence, “skin in the game”
• Higher returns compared to Government bonds / bank savings

7. SPAC Investors Preferred Industries
➢Investors’ industry preferences:
• Consumer products (including e-Commerce)
• Healthcare (including Health-Tech / Med-Tech)
• Biotech (including genetics)
• Technology (especially Artificial Intelligence / Software / Cybertech)
• Education (including Edu-Tech)
• Real estate
• Infrastructure
• Renewable / Green energy
• Medicinal cannabis

8. SPAC CAPITAL POOL BY INDUSTRIES

9. The “Who’s Who” are also in SPACs

10. THE SPAC BOOM

11. SPAC Mergers / Business Combinations

12. Top Performing Live SPAC Mergers in 2020

13. Top 10 Closed SPAC Mergers in 2020

14. Costs of Creating a Typical SPAC
➢Costs of listing a SPAC:
• Seed Capital: 5% of amount to be raised (contributed by Sponsor)
• Professional and filing fees: US$1.5 million (paid out of Seed Capital)
• Lawyers
• Accountants
• Industry consultants
• Pre-deal research
• Trustees
• Roadshow expenses
• Investment banking fee: 6% of funding raised (paid by SPAC out of proceeds)
• SPAC equity: 3% of SPAC (awarded to investment bank and
professional parties from 20% Sponsor’s Equity)

15. Seed Capital
➢ Strategy I:
▪ Use your own money
▪ Keep all 20% Founder’s Shares
➢ Strategy II:
▪ Partial sell-down of Founder’s Shares at a discount to investors (extent of share sale depends on
quantum of
Seed Capital needed to be raised)
▪ ArcCap can assist in such sale
▪ Typically at US$5-7 per share, giving away 4-6% of a total of 20% Founder’s Shares, leaving
Sponsor with 14-16%, but keeping control of the Board of Directors
➢ Strategy III:
▪ Funding, with upfront commitment, from ArcCap’s SPAC Seed Capital Funds
▪ Individual negotiations with ArcCap fund managers on percentage of Founder’s Shares in exchange
for
Seed Capital (extent of share sale depends on quantum of Seed Capital needed to be raised)

16. SPAC vs IPO
SPAC IPO
Time Taken 75 to 90 days from start to IPO Min twelve (12) mth from start to IPO
Degree of vetting by
SEC / NASDAQ
“Light touch” up to SPAC IPO; vetting comes when
acquisition / merger occurs
Full-blown due diligence and vetting
Professional parties Much simplified work load as a SPAC is “empty” “Cast of a hundred” with investment banks, attorneys,
auditors / accountants, industry consultants, PR /
roadshow professionals, share depository, custodian, etc.
Fees and expenses Sponsor’s Seed Capital:
Investment banks (IB):
Professional fees:
Upfront mobilization
fees:
5% of amount to be raised by
SPAC, in return for 17% of
SPAC shares
6% of funds raised (paid by
SPAC)
3.0% of SPAC equity
US1.5M (paid by SPAC)
U$750,000
Investment banks:
Attorneys:
Accountants:
Consultants:
PR / Roadshow:
Depository / Custodian:
Listing / Filing fees:
Upfront mobilization fees:
8% of funds raised
US$2.5–3.0 M
US$1.5–2.0 M
US$500,000
US$400,000
US$100,000
US$200,000
30%
Total To protect our client interest, AMC negotiated with our
panel of IB to split their fees into 2 tranches, 3% at funds
raised. Second 3% after successfully help the SPAC to
complete the business combination and 5% Seed Capital
(in return for 17% of SPAC Equity)
8% of funds raised + US$5.2–6.2 mil

17. AMC’s Partners
Arc Capital (“ArcCap”) is a regional boutique investment bank (www.arccap.us):
• Specializes in mid-cap IPOs and SPACs, M&A advisory and wealth management services
• International presence with offices in all continents
• Voted “Best Global Mid-Market Investment Bank 2020” by International Investor, a major
financial publication
• Owns Kingswood Capital Markets, a Wall Street mid-market investment bank / stockbroking
house (www.kingswoodcm.com)

18. MY’s Arc Capital SPAC Credentials
➢ SPAC #1 (US$50 million, Blockchain technology):
Investor, listed in April 2019 – successfully merged with an Asian Blockchain technology company in
March 2020 and de-SPACed
➢ SPAC #2 (US$100 million, technology):
Joint Sponsor and Sole Advisor, filed for IPO in October 2020 – approved by SEC and listed on NASDAQ
on 29 December 2020, targeting the U.S. technology sector (SPAC RECORD)
➢ SPAC #3 (US$50 million, health technology):
Sole Sponsor and Sole Advisor, filed for IPO in August 2020 – approved by SEC and to be listed on
NASDAQ in January 2021, targeting the global healthcare data analytics sector
➢ SPAC #4 (US$50 million, healthcare):
Joint Sponsor and Sole Advisor, filed for IPO in September 2020 – to be listed on NASDAQ in February
2021, targeting the Asian healthcare service provision sector
➢ SPAC #5 (US$150 million, cannabis):
Joint Sponsor and Sole Advisor, filed for IPO in October 2020 – to be listed on NASDAQ in March 2021,
targeting the global medicinal cannabis sector

19. MY’s Arc Capital SPAC Credentials
➢ SPAC #6 (US$150 million, biotechnology):
Joint Sponsor and Sole Advisor, filing for IPO in January 2021 – to be listed on NASDAQ in April 2021,
targeting the global biotechnology sector
➢ SPAC #7 (US$150 million, cybersecurity):
Sole Advisor, filing for IPO in January 2021 – to be listed on NASDAQ in April 2021, targeting the
global cybersecurity sector
➢ SPAC #8 (US$100 million, biotechnology):
Joint Sponsor and Sole Advisor, filing for IPO in January 2021 – to be listed on NASDAQ in April 2021,
targeting the global biotechnology sector
➢ SPAC #9 (US$150 million, infrastructure):
Sole Advisor, filing for IPO in February 2021 – to be listed on NASDAQ in May 2021, targeting the
Middle East infrastructure sector
➢ SPAC #10 (US$50 million, technology):
Sole Advisor, filing for IPO in February 2021 – to be listed on NASDAQ in May 2021, targeting the
global technology sector

20. THANK YOU
FOR FURTHER INFORMATION, PLEASE CONTACT
BOB LAU at bob@applicotech.com
The contents of this document has many assumptions and projections. It is prepared for discussion
purposes only. While care and research is done rigorously to compile these information, Applico
Management Co., Ltd will not assume any responsibility on the accuracy of the numbers/ data within.
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