August 16, 2022

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FutureTech II Acquisition Appears to be like For AI Or Robotics Goal (NASDAQ:FTII)

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A Fast Take On FutureTech II

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

The SPAC (Particular Objective Acquisition Firm) intends to pursue a merger with a corporation inside the sectors of ‘disruptive utilized sciences, as an example, artificial intelligence, robotics, and each different experience enhancements.

My technique is to hunt SPACs the place the executives have essential enterprise working experience along with a minimal of 1 SPAC with a observe report of success.

So, absent these two traits, I‘m on Maintain for FTII nowadays.

FutureTech II Sponsor Background

FutureTech II has 2 executives foremost its sponsor, FutureTech II Companions LLC.

The sponsor is headed by:

  • Chief Govt Officer Yuquan Wang, who was the founding confederate of Haiyin Capital and has been a board member of robotics firms and completely different experience corporations.

  • Chief Monetary 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 Fairness for BNP Paribas Malaysia.

The SPAC is the first automotive by this govt group, although the establish has the roman numeral ‘II‘ which has often been used to point the number of SPACs sharing the similar establish as part of a sequence.

FutureTech II‘s Market

In response to a 2021 market analysis report by Grand View Analysis, the worldwide market for artificial intelligence features was an estimated $62.4 billion in 2020 and is forecast to achieve $931 billion by 2028.

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

The first drivers for this anticipated progress are a rising use of AI utilized sciences all through all enterprise verticals as firms search to boost efficiencies and develop new providers.

Additionally, beneath is a chart displaying the historic and projected future progress trajectory of AI inside the Asia Pacific market:

Asia Pacific Synthetic Intelligence Market (Grand View Analysis)

FutureTech II‘s SPAC IPO Phrases

New Rochelle, New York-based FutureTech II supplied 10 million fashions of Class An ordinary stock at a price of $10.00 per unit for gross proceeds of roughly $100 million, not along with the sale of customary underwriter selections.

The IPO moreover provided for one warrant per share, exercisable at $11.50 per share a minimal of 30 days after the completion of its preliminary enterprise combination and expiring 5 years after completion of the preliminary enterprise combination or earlier upon redemption or liquidation.

The SPAC has 18 months to complete a merger (preliminary enterprise combination). If it fails to take motion, shareholders can be able to redeem their shares/fashions for the remaining proceeds from the IPO held in perception.

Inventory shopping for and promoting symbols embody:

  • Models (FTIIU)

  • Warrants (FTIIW)

  • Frequent Inventory (FTII)

Founder shares are 20% of the total shares and embody Class B shares.

The SPAC sponsor moreover purchased 415,075 fashions at $10.00 per unit in a personal placement. The fashions are equal to most people fashions nonetheless may not be transferred ’until 30 days after the consummation of the Firm‘s preliminary enterprise combination moreover to permitted transferees and [b] the warrants included as a component of the Personal Placement Models, so long as they’re held by the Sponsor or its permitted transferees, will in all probability be entitled to registration rights.

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Circumstances to the SPAC ending an preliminary enterprise combination embody a requirement to purchase various corporations equal to 80% of the online belongings of the SPAC and a majority of voting pursuits voting for the proposed combination.

The SPAC may topic additional stock/fashions to impression a contemplated merger. If it does, then the Class B shares could be elevated to retain the sponsor‘s 20% equity possession place.

Commentary About FutureTech II

The SPAC is one different recently-funded automotive that seeks to cope with artificial intelligence enabled agency targets.

The AI enterprise is form of big and is further of a horizontal enterprise as its utilized sciences contact so many various industries. It‘s turning into form of similar to the Web as an enterprise in that it permeates so many industries.

The SPAC‘s administration executives have essential funding enterprise experience nonetheless no obvious AI or extreme tech enterprise working experience.

Moreover, that’s the main SPAC automotive by this administration duo, in order that they haven’t any observe report of funding returns inside the SPAC enterprise.

Investing in a SPAC sooner than a proposed enterprise combination is launched is mainly investing inside the senior executives of the SPAC, their functionality to create price and their earlier SPAC observe report of returns to shareholders.

The value of that funding is roughly 20% of the upside to the SPAC sponsor, nonetheless the timeframe for realizing a significant obtain is perhaps far sooner, a 1- to 3-year time interval for a SPAC versus 10 or further years for a typical enterprise capital fund.

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With so many SPACs to pick out from and a restricted amount of high quality targets, it‘s obligatory for merchants to be ‘picky‘ about which SPACs to cope with.

My technique is to hunt SPACs the place the executives have essential enterprise working experience along with a minimal of 1 SPAC with a observe report of success.

So, absent these two traits, I‘m Impartial on FTII nowadays.

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