Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

O. Subsequent Events

On November 6, 2019, LGL Group contributed $3.35 million to the Sponsor to fund the Sponsor’s purchase of private warrants in a private placement that closed simultaneously with the consummation of the SPAC’s initial public offering (“IPO”). Each private warrant is exercisable to purchase one share of common stock of the SPAC at an exercise price of $11.50 per share, subject to adjustment. The proceeds from the private warrants will be added to the proceeds from the SPAC’s initial public offering to be held in a trust account. If the SPAC does not complete a business combination within 24 months from the closing of the SPAC’s initial public offering, the proceeds from the sale of the private warrants will be used to fund the redemption of the shares sold in the SPAC’s initial public offering (subject to the requirements of applicable law), and the private warrants will expire worthless. LGL is expected to own approximately 43.57% of the Sponsor immediately following any transaction.

On November 7, 2019, the SPAC raised $172.5 million through the sale of 17.25 million shares and was listed as a publicly traded company on the NASDAQ Capital Market under the ticker symbol ‘DFNSU’. The IPO closed on November 12, 2019.

Prior to and immediately following the IPO, the Sponsor held 4,312,500 shares of the SPAC, which are restricted and non-tradable. The Sponsor holds 20% of the shares in the SPAC along with 5,200,000 warrants at a strike price of $11.50.

There is no assurance that the SPAC will be successful in completing a business combination or that any business combination will be successful. LGL can lose its entire investment in the SPAC if a business combination is not completed within 24 months or if the business combination is not successful, which may adversely impact LGL’s stockholder value.

As a result of this transaction, certain of the current directors of LGL will be officers and/or directors of the SPAC, and will be treated as related or affiliated parties in future filings.

Marc Gabelli, our Non-Executive Chairman also serves as Chairman and CEO of the SPAC and has invested in the Sponsor. Timothy Foufas, a member of LGL’s board of directors, is also a member of the Sponsor and COO of the SPAC and has invested in the Sponsor. Patrick Huvane, LGL’s SVP of business development, is a member of both LGL and the SPAC’s management team. Michael J. Ferrantino, Jr., a member of LGL’s board of directors, is also a member of the Sponsor and a board member for the SPAC. Under separate arrangement, these people may be eligible to receive incentive compensation should the SPAC complete a successful acquisition.