FutureTech II Acquisition Looks For AI Or Robotics Target (NASDAQ:FTII)

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A Quick Take On FutureTech II

FutureTech II Acquisition Corp. (NASDAQ:FTII) has raised roughly $100 million from an IPO at a worth of $10.00 per unit, in keeping with the phrases of its most up-to-date S-1/A regulatory submitting.

The SPAC (Special Purpose Acquisition Company) intends to pursue a merger with an organization within the sectors of ‘disruptive applied sciences, for instance, synthetic intelligence, robotics, and some other expertise improvements.

My method is to hunt SPACs the place the executives have important trade working expertise in addition to not less than one SPAC with a monitor report of success.

So, absent these two traits, I‘m on Hold for FTII at the moment.

FutureTech II Sponsor Background

FutureTech II has 2 executives main its sponsor, FutureTech II Partners LLC.

The sponsor is headed by:

  • Chief Executive Officer Yuquan Wang, who was the founding associate of Haiyin Capital and has been a board member of robotics firms and different expertise corporations.

  • Chief Financial Officer Michael Greenall, who’s the founding father of Kairos Villa, an eco-resort in Malaysia and has been the Managing Director and Head of Equity for BNP Paribas Malaysia.

The SPAC is the primary automobile by this government group, despite the fact that the title has the roman numeral ‘II‘ which has sometimes been used to indicate the variety of SPACs sharing the identical title as a part of a collection.

FutureTech II‘s Market

According to a 2021 market analysis report by Grand View Research, the worldwide marketplace for synthetic intelligence purposes was an estimated $62.4 billion in 2020 and is forecast to succeed in $931 billion by 2028.

This represents a forecast CAGR of 40.2% from 2021 to 2028.

The major drivers for this anticipated progress are a rising use of AI applied sciences throughout all trade verticals as firms search to enhance efficiencies and develop new services and products.

Also, under is a chart exhibiting the historic and projected future progress trajectory of AI within the Asia Pacific market:

Asia Pacific Artificial Intelligence Market

Asia Pacific Artificial Intelligence Market (Grand View Research)

FutureTech II‘s SPAC IPO Terms

New Rochelle, New York-based FutureTech II bought 10 million models of Class A typical inventory at a worth of $10.00 per unit for gross proceeds of roughly $100 million, not together with the sale of customary underwriter choices.

The IPO additionally offered for one warrant per share, exercisable at $11.50 per share not less than 30 days after the completion of its preliminary enterprise mixture and expiring 5 years after completion of the preliminary enterprise mixture or earlier upon redemption or liquidation.

The SPAC has 18 months to finish a merger (preliminary enterprise mixture). If it fails to take action, shareholders will have the ability to redeem their shares/models for the remaining proceeds from the IPO held in belief.

Stock buying and selling symbols embody:

Founder shares are 20% of the overall shares and include Class B shares.

The SPAC sponsor additionally bought 415,075 models at $10.00 per unit in a non-public placement. The models are similar to the general public models however might not be transferred ’till 30 days after the consummation of the Company‘s preliminary enterprise mixture besides to permitted transferees and [b] the warrants included as a part of the Private Placement Units, as long as they’re held by the Sponsor or its permitted transferees, will probably be entitled to registration rights.

Conditions to the SPAC finishing an preliminary enterprise mixture embody a requirement to buy a number of companies equal to 80% of the web property of the SPAC and a majority of voting pursuits voting for the proposed mixture.

The SPAC might difficulty further inventory/models to impact a contemplated merger. If it does, then the Class B shares can be elevated to retain the sponsor‘s 20% fairness possession place.

Commentary About FutureTech II

The SPAC is one other recently-funded automobile that seeks to deal with synthetic intelligence enabled firm targets.

The AI trade is sort of massive and is extra of a horizontal trade as its applied sciences contact so many different industries. It‘s turning into type of just like the Internet as an trade in that it permeates so many industries.

The SPAC‘s management executives have important funding trade expertise however no apparent AI or excessive tech trade working expertise.

Additionally, that is the primary SPAC automobile by this administration duo, in order that they haven’t any monitor report of funding returns within the SPAC trade.

Investing in a SPAC earlier than a proposed enterprise mixture is introduced is basically investing within the senior executives of the SPAC, their means to create worth and their earlier SPAC monitor report of returns to shareholders.

The value of that funding is roughly 20% of the upside to the SPAC sponsor, however the time-frame for realizing a big acquire will be far quicker, a 1- to 3-year time interval for a SPAC versus 10 or extra years for a typical enterprise capital fund.

With so many SPACs to select from and a restricted quantity of top quality targets, it‘s vital for traders to be ‘choosy‘ about which SPACs to deal with.

My method is to hunt SPACs the place the executives have important trade working expertise in addition to not less than one SPAC with a monitor report of success.

So, absent these two traits, I‘m Neutral on FTII at the moment.

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