On January 24, 2024, the U.S. Securities and Exchange Commission (SEC) adopted some of the rules relating to special purpose acquisition companies (SPACs) it originally proposed in March 2022. The rules reflect new disclosure requirements relating to:
- Sponsor identity and compensation, conflicts of interest and dilutive effects of securities held by the sponsor
- Transactions entered into by the sponsor in connection with a de-SPAC transaction
- Enhanced regulation of projections used in de-SPAC transactions
- New requirements applicable to the financial statements to be filed by the target company in a de-SPAC transaction
- Deeming the target company a “co-registrant” under any S-4 or F-4 registration statement filed in connection with a de-SPAC transaction
- Requiring a 20-calendar-day minimum dissemination period for de-SPAC disclosure documents
- Requiring a redetermination of a former SPAC’s filing status as a “smaller reporting company” following the closing of the de-SPAC
Notably, the SEC did not adopt proposed rules relating to (i) underwriter liability and (ii) an investment company act safe harbor that would be applicable to SPACs, though it did provide guidance as to the applicability of current rules in connection with such matters.
See Loeb & Loeb's Client Alert for additional details.