Special Purpose Acquisition Companies (SPAC)

Marcum has represented issuers and worked with underwriters and targets of special purpose acquisition companies (SPACs). We have wide-ranging experience in both initial public offerings (IPOs) and subsequent business combinations entered into by such companies. This experience gives us a thorough understanding of the intricacies of the SPAC process.

Marcum is one of the top audit firms in the SPAC industry.
Marcum has a dedicated SPAC service group comprised of professionals in Marcum offices across the country.
Marcum has been one of the top auditors in the specialized SPAC IPO market since 2015, auditing more than 250 SPAC IPO transactions between 2015 and 2021.

Marcum LLP PCAOB Report

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Marcum LLP Peer Review Report

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THE TOP IPO IN 2020 WAS AUDITED BY MARCUM

Raising the most among all IPOs last year, totaling $4 billion, it was also the largest-ever IPO by a SPAC according to Audit Analytics.

ONE OF 2020'S TOP AUDITING FIRMS

Marcum represented 92 of the 248 SPAC IPO issuers in 2020, including the largest-ever IPO by a SPAC – who raised more than $31.5 billion of the $83 billion generated by these transactions in total.

Services for each of the three phases of the SPAC transaction

1. IPO Phase
2. Search Phase
3. De-SPAC Phase

Registrant entity is formed.
Founder’s shares are issued.
Financial statements including comprehensive notes are prepared by management.
A substantially complete Registration Statement (including financial statements) is delivered to auditors.
Auditor completes the audit under PCAOB (“Public Company Accounting Oversight Board”) standards, review registration statement, and authorize confidential submission of draft registration statement (DRSA) with the SEC.
SEC initial review period commences (generally 30 days).
Auditor assists with response to SEC comments.
Auditor reviews updated registration statements and authorizes confidential submission with the SEC.
SEC comments are cleared.
Registration statement declared effective.
Underwriting agreement executed.
Auditor issues comfort letter to underwriter.
SPAC commences trading.
Auditor issues bring-down comfort letter immediately prior to close.
Trading closes.
Auditor completes post-closing balance sheet audit and issues opinion to be included in a current report on Form 8-K, to be filed within 4 days.

SPAC is now subject to the reporting requirements of the Securities Exchange Act of 1934 and must file 10-Ks and 10-Qs with the SEC.
Auditor is required to review each 10-Q, audit the 10-K, and authorize filing with the SEC.
Auditor is also often engaged for transaction services, including due diligence and/or quality of earnings services on SPAC targets.
Auditor may be consulted on structuring matters and financial statement requirements to execute transactions.

SPAC has signed a definitive agreement with a target.
Proxy statement is prepared:
- Audited financial statements.
- Unaudited interim financial statements.
- Unaudited combined pro-forma financial statements.
Auditor reviews proxy statements and authorizes filing with the SEC.
If the auditor for the target is different from the SPAC auditor, both audit firms will review the proxy statement and authorize filing.
SEC comments and response process commences.
Comments are cleared.
Proxy statement is mailed.
Vote on transaction takes place.
Transaction closes.
Following the close of the transaction SPAC auditor may be required to reissue audit report in connection with various filings with the SEC

PCAOB Audit Vs. GAAS Audit

GAAS audit – conducted under Generally Accepted Auditing Standards.
GAAS audit focuses more on “what” the numbers are and a PCAOB audit additionally focuses on “why” and “how” the numbers got there.
Auditor independence rules are much stricter under PCAOB Standards.
Significant limitations on services an auditor can provide in connection with a PCAOB standard audit.

SPAC Accounting & Reporting Advisory Services

Marcum LLP has extensive SEC knowledge and experience to assist you in navigating SEC rules and regulations which give rise to complex issues and questions.

SPAC Accounting & Reporting Advisory Services

Pre-Filing Support
Registration Statement Prepartation
File and Respond to SEC Comments and Super 8-K
Post-Merger Continuing 1934 Act Assitance
Continuing Support

Technical assistance with SPAC transaction
Prepare or review public company and Regulation S-1 compliant financial statements
Analyze/Revisit critical accounting areas and documentation
Prepare financial statements and analysis of carve-out financials for S-1 compliance

Draft proxy statement
Draft tie-out binder supporting information and footnotes in the registration statement
Assist in completing the GAAP and SEC checklists
Assist with SEC preclearance matters

Provide assistance to resolve comments received from the SEC and external auditors to understand the substance of the comment and resolve in filing
Assist in drafting amendments to the registration statement to reflect SEC comment responses and any material developments
Assist in drafting and review of Super 8-K, ensuring compliance with timing and required disclosures

SEC Reporting – Assist in preparation of the Company’s Form’s 10-K, 10-Qs, and 8-K (optional)
Assist with establishment of policies for month-end, quarter-end, and year-end close process (optional)
Help develop governance and compliance practices (optional)
Draft SOX compliance program (optional)

Technical assistance with accounting for:
- PIPE funding
- Rights of various preferred, founders, and common stock
- Warrants
- Forward purchase commitments
- Other complex debt and equity vehicles
De-SPAC preparation and acquisition transaction assistance

SPAC IPO Readiness: IPO Focus Areas

"Hot Button" Issues for SEC/SEC Comment Trends

Revenue recognition
Equity and stock based compensation
Common stock valuation
Complex financial instruments and related assumptions
Acquisition – business combination
Investments
Related party transactions
Disclosure quality and completeness
Segment reporting

Equity/ Stock Based Compensation

Analyze the cap table and ensure all stock ownership records are up to date
Understand the terms of all warrants and convertible instruments and determine how filing an IPO will affect their treatment
Review the articles of incorporation and by-laws
Understand and evaluate the capital structure
Prepare for SEC comments on common stock valuation

Other Areas To Consider

Goodwill and intangible assets with related impairment charges, if any
Foreign currency translation issues
Contingencies
Inventory valuation and reserves
Earnings per share calculations
Management’s discussion and analysis
Recently issued accounting standards
Compensation and related disclosures
Pro Forma issues

Quarterly Financial Information and Financial Statement Disclosures

Preparation of quarterly financial statements
Review Financial statement disclosures – prepared in accordance with US GAAP and includes disclosures specific to SEC registrants
- Segment Reporting
- Management basis if accounting judgment
- Compute EPS for all periods
- Any rationale for non-GAAP measures
Resolve and address all other critical accounting matters
Drafting of registration statement - F-Pages & MD&A

Representative List of Marcum’s SPAC Initial Public Offerings

Issuer	Led Underwriter	Offering Size	IPO Date
PWP Forward Acquisition Corp. I	Citigroup	$200,000,000	March 10, 2021
Agile Growth Corp.	Citigroup/Jeffries	$200,000,000	March 10, 2021
Digital Transformation Opportunities Corp.	Barclays	$200,000,000	March 10, 2021
Colonnade Acquisition Corp. II	Barclays/Deutsche Bank	$200,000,000	March 10, 2021
ESM Acquisition Corporation	Credit Suisse Securities	$200,000,000	March 10, 2021
SVF Investment Corp. 3	Citigroup/UBS/Duetsche Bank/Cantor Fitzgerald/Mizuho	$200,000,000	March 9, 2021
Independence Holdings Corp.	Citigroup/Deutsche Bank	$200,000,000	March 9, 2021
SVF Investment Corp. 2	Citigroup/UBS/Duetsche Bank/Cantor Fitzgerald/Mizuho	$200,000,000	March 9, 2021
First Reserve Sustainable Growth Corp.	Barclays/Goldman Sachs	$200,000,000	March 5, 2021
Tribe Capital Growth Corp.	Cantor Fitzgerald	$200,000,000	March 5, 2021

REPRESENTATIVE SPAC MERGER TRANSACTIONS

Stock Symbol	Company Name	SPAC Entity
HCCO	SOC Telemed	Healthcare Merger Corp.
PTAC	Porch.com	PropTech Acquisition Corporation
SAQN	CuriosityStream	Software Acquisition Group Inc.
ORSN	Ucommune	Orisun Acquisition Corp.
NFIN	Triterras Fintech	Netfin Acquisition Corp.
CPAA	Advantage Solutions	Conyers Park II Acquisition Corp.
PIC	CXL Fleet	Pivotal Investment Corporation II
SMMC	Billtrust	South Mountain Merger Corp.
HYAC	Arko Holdings	Haymaker Acquisition Corp. II
NEXT	NextDecade Corp./	Harmony Merger Corp.