Nocturne Acquisition Corp Faces Increased Costs and Time Constraints Amid SEC Proposed Rules for SPACs

Nocturne Acquisition Corp (ticker: MBTC), a special purpose acquisition company (SPAC), faces increased costs and time constraints as the Securities and Exchange Commission (SEC) recently issued proposed rules related to disclosure, financial statement requirements, and potential liability amongst others for SPACs. The company is currently paying its sponsor a monthly fee of $10,000 for office space, administrative, and support services. The SPAC has a deferred underwriting fee of $0.35 per unit, amounting to an aggregate of $4,025,000 payable to the underwriters solely upon the completion of the business combination.

Nocturne Acquisition Corp has not entered into any off-balance sheet financing arrangements and has no long-term debt, operating lease obligations, or long-term liabilities. The company’s contractual obligations include an agreement to pay the monthly fee mentioned above to its sponsor. The fees began on March 30, 2021, and will continue to be incurred until the completion of the business combination or liquidation.

The SPAC Rule Proposals

Issued by the SEC on March 30, 2022, the SPAC Rule Proposals cover disclosures in business combination transactions between SPACs and private operating companies, the financial statement requirements for transactions involving shell companies, the use of projections in connection with proposed business combination transactions, potential liability for certain transactions participants, and the possibility of SPACs being subject to regulations under the Investment Company Act. The SPAC Rule Proposals might impact the company’s ability to complete its initial business combination with Cognos, a potential target, and could lead to a forced liquidation due to additional regulatory requirements.

To mitigate the risk of being deemed an unregistered investment company or subjected to restrictions under the Investment Company Act, Nocturne Acquisition Corp has instructed Continental to liquidate its investments in money market funds that invest primarily in U.S. government treasury securities. The company will hold all funds in the trust account in cash or U.S. government treasury securities until the completion of the initial business combination or liquidation.

Potential Impact on Nocturne Acquisition Corp’s Initial Business Combination

Nocturne Acquisition Corp’s initial business combination with Cognos may be materially impacted by recent geopolitical instability, such as the military conflict in Ukraine, the COVID-19 pandemic, and economic uncertainty. The company may also face challenges in complying with the proposed SEC rules, leading to increased costs and delays in its business combination activities.

In conclusion, Nocturne Acquisition Corp is currently facing challenges due to the SEC’s proposed SPAC Rule Proposals, which may lead to disruptions in the company’s ability to complete its initial business combination with Cognos, or potentially force them to liquidate earlier than anticipated. The company will need to strategize and adapt its operations to comply with the proposed rules and navigate the challenges presented by ongoing geopolitical and economic uncertainties.

Income Statement

Financials in millions USD. Fiscal year is January – December. source

Year 2022 2021
0 Selling, General & Admin 2.05 0.72
1 Operating Expenses 2.05 0.72
2 Operating Income -2.05 -0.72
3 Other Expense / Income -0.84 -0.01
4 Pretax Income -1.21 -0.71
5 Net Income -1.21 -0.71
6 Shares Outstanding (Basic) 9 12
7 Shares Outstanding (Diluted) 9 12
8 Shares Change -23.14%
9 EPS (Basic) -0.14 -0.06
10 EPS (Diluted) -0.14 -0.06
11 Free Cash Flow Per Share -0.14 -0.05
12 EBITDA -1.21 -0.71
13 EBIT -1.21 -0.71

Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!