FutureTech II acquisition seeks AI or robotics target (NASDAQ:FTII)

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A quick overview of FutureTech II

FutureTech II Acquisition Corp. (NASDAQ:FTII) raised approximately $100 million through an IPO at a price of $10.00 per share, under the terms of its latest S-1/A regulatory filing.

SPAC (Special Purpose Acquisition Company) intends to pursue a merger with a company in the “disruptive technologies, for example artificial intelligence, robotics and any other technological innovation.

My approach is to seek out SPACs where the leaders have significant industry operating experience as well as at least one SPAC with a track record of success.

So, in the absence of these two characteristics, Iam waiting for FTII at the moment.

FutureTech II Sponsor Background

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

The sponsor is led by:

  • Managing Director Yuquan Wang, who was the founding partner of Haiyin Capital and served as a board member of robotics companies and other technology companies.

  • Chief Financial Officer Michael Greenall, who is the founder of Kairos Villa, an eco-resort in Malaysia and was Managing Director and Head of Equity for BNP Paribas Malaysia.

The SPAC is the first vehicle of this executive group, although the name has the Roman numeral ‘II‘ which has generally been used to indicate the number of SPACs sharing the same name as part of a series.

Future Tech IIthe market

According to a 2021 market research report by Grand View Research, the global market for artificial intelligence applications was estimated at $62.4 billion in 2020 and is expected to reach $931 billion by 2028.

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

The main drivers of this expected growth are an increasing use of AI technologies across all industry verticals, as companies seek to improve efficiency and develop new products and services.

Also below is a graph showing the historical and projected future growth trajectory of AI in the Asia-Pacific market:

Asia Pacific Artificial Intelligence Market

Asia Pacific Artificial Intelligence Market (Grand View Research)

Future Tech IIPSPC IPO Terms

FutureTech II, based in New Rochelle, New York, sold 10 million units of Class A common stock at a price of $10.00 per unit for gross proceeds of approximately $100 million, not including the sale of subscribers’ usual options.

The IPO also provided for one warrant per share, exercisable at $11.50 per share at least 30 days after the completion of its initial business combination and expiring 5 years after the completion of the initial business combination or earlier on redemption or liquidation.

SPAC has 18 months to complete a merger (initial business combination). If he fails to do so, shareholders may redeem their shares/units for the remaining IPO proceeds held in trust.

Stock symbols include:

  • Units (FTIIU)

  • Warrants (FTIIW)

  • Ordinary shares (FTII)

Founder Shares represent 20% of total shares and consist of Class B Shares.

Limited partner PSPC also purchased 415,075 units at $10.00 per unit through a private placement. The lots are identical to the public lots but not transferable ‘up to 30 days after consumption of the Companyinitial business combination, except to permitted assignees and [b] Warrants included as a component of the Private Placement Units, while held by the Limited Partner or its permitted transferees, will be entitled to registration fees.

The conditions for the SPAC to effect an initial business combination include the requirement to purchase one or more businesses equal to 80% of the net assets of the SPAC and a majority of the votes voting for the proposed business combination.

SPAC may issue additional shares/units to effect a proposed merger. If so, the class B shares would be increased to retain the sponsorthe 20% stake in the capital of.

FutureTech II Commentary

The SPAC is another recently funded vehicle that seeks to focus on AI-enabled enterprise targets.

The AI ​​industry is quite large and is more of a horizontal industry as its technologies touch on many other industries. Thisis becoming a bit like the internet as an industry in that it permeates many industries.

The SPACSenior executives at have significant experience in the investment industry, but no obvious experience in AI or the high-tech industry.

Additionally, this is the first SPAC vehicle from this management duo, so they have no history of ROI in the SPAC industry.

Investing in a SPAC prior to the announcement of a proposed business combination is essentially investing in the senior management of the SPAC, their ability to create value and their previous track record of performance for SPAC shareholders.

The cost of this investment represents approximately 20% of the upside for the SPAC sponsor, but the time frame to realize a significant gain can be much faster, a period of 1 to 3 years for a SPAC versus 10 years or more for a SPAC. typical venture capital fund.

With so many SPACs to choose from and a limited number of high-quality targets, itis important for investors to be ‘difficult‘ on which SPACs to focus on.

My approach is to seek out SPACs where the leaders have significant industry operating experience as well as at least one SPAC with a track record of success.

So, in the absence of these two characteristics, IAm neutral on FTII at present.

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