The “Zukin RBR” A Projection Review Service

Proposed SPAC Regulations Create a New Financial Due Diligence Service

Zukin Certification Services (“ZCS” or “Zukin”) is now providing the essential SPAC financial advisory service called for in the SEC proposed regulations, the “Zukin Reasonable Basis Review Service” or the “Zukin RBR”.  The Zukin RBR is a financial due diligence service that reviews a target’s financial projection adding an additional level of diligence by a third-party expert.

The SEC Proposed SPAC Regulations

“Management's good faith assessment of future financial performance must have a reasonable basis…an outside review of management’s projections may furnish additional support for having a reasonable basis for a projection”

(pg. 324 SEC Proposed Rule: Special Purpose Acquisition Companies, Shell Companies, and Projections)

Disclaimer: Zukin does not provide fairness, valuation, or projection opinions in De-SPAC transactions. The Zukin RBR report summarizes a review of projections and their underlying assumptions, each of which have been provided by management. While Zukin is a projection expert and is prepared to consent to having a Zukin RBR Report included in SEC filings, such report represents a summary of financial due diligence, for example as called for under the proposed SEC SPAC regulations and is not investment advice.

Ushering In a New Era

Letter from the Chairman

June 2022

I am proud to introduce the launch of the Zukin Reasonable Basis Review Service equipped with the Z-SPAC Readiness Certification. By creating the first SPAC financial due diligence firm of its kind, we are responding to the needs of the modern, evolving SPAC marketplace. Our mission is to provide critical services that underpin De-SPAC transactions going forward ultimately resulting in an improved and sustainable SPAC marketplace.

As the Co-Founder of Houlihan Lokey Howard & Zukin (“HLHZ,” now “Houlihan Lokey”; NYSE: HLI) the central theme of my 40-year plus investment banking and financial advisory career has been creating fundamental financial due diligence services with my world-class teams that improve the underpinning of financial transactions. The Zukin RBR Service should serve to strengthen our financial markets, to the benefit of investors, sponsors, and boards of directors.

We look forward to having the opportunity to serve you.


James Zukin

"The central theme of my 40-year plus career has been creating fundamental services ... that improve the underpinning of financial transactions."

About Zukin

On The Forefront of Innovation Creating a New Category of SPAC Services

Today sponsors should consider the following:

  • Accountant’s comfort letter
  • 10b-5 letter from counsel
  • CFO Letter
  • The Zukin RBR
  • Fairness Opinion

Zukin Certification Services is the financial due diligence affiliate of Zukin Partners, a boutique financial advisory firm founded by Jim Zukin, Co-Founder of Houlihan Lokey and comprised of a noted team. Vetting projection models, analyzing their assumptions, and determining their reasonableness is a core competency of Zukin.

The Zukin review of management’s projections (the “Zukin RBR”) and their underlying assumptions is Zukin’s lead SPAC financial due diligence service. In 2021 when SPACs were reaching their historic peak, Zukin challenged itself with the support of others to introduce innovative advisory services to underpin De-SPAC transactions going forward.

Zukin considers achieving a state of public company readiness on the part of the target company to be the first category which needs addressed as part of the process of delivering the RBR report. Zukin has developed a proprietary readiness framework of more than 20 components. The Zukin Reasonable Basis Review Report will identify the financial items management has chosen to be projected, the period to be covered, and the manner of the presentation to be used. It will provide a detailed review of the process.

31% of public companies that merge with a SPAC report a material weakness in their first year, as compared to 20% of non-SPAC public companies.

Our Pedigree

Knowledge and Experience You Can Count On

We bring together a cross-disciplinary team to mirror the needs of our clients as they relate to the review of future financial performance. We are proud to play our essential oversight role.

About The Zukin RBR

A Projection Review Service

The Zukin RBR service provides SPAC boards with a review of the target company’s projections and underlying assumptions based on the net available capital called for at De-SPAC. The scope includes a review of public company readiness as part of the projection review process where readiness can be independently certified.

Zukin provides their findings in a preliminary report upon request that will be made available for inclusion in the proxy. A final report will be provided at the close of the business combination.

The Zukin RBR will identify the financial items management has chosen to be projected, the period to be covered, and the manner of the presentation to be used.

Specific financial items subject to review will be revenues, and net income (loss) as well as other items as provided by management. Earnings per share projections will be provided based on scenarios provided by management that reflect different assumptions as to the issuance or redemption of shares.

When analyzing the assumptions underlying a financial projection, we start with the purpose of the projection, the tenants of the business plan, and analyze industry size, growth rate, risk factors, and the dynamics of the subject company. Competitor’s assumptions, current, and future market share forecasts play a critical role.

Industry experts and reports may be used by management and Zukin to review a variety of assumptions and identify material risk factors.

The Readiness Framework

The 4 Elements and Their 30 Components

The Zukin Readiness Framework allows us to evaluate the state of public company readiness necessary to achieve projections


Finance, Reporting, and Tax

To be successful, the De-SPAC company should understand the financial and compliance aspects of the transaction, including public company reporting, tax implications, and IPO readiness.


A. Accounting Considerations — Adhere to SEC requirements for converting historical GAAP-issued, audited financial statements to PCAOB standards.

B. Financial Determinations — Prepare required filings per SEC rules and regulations.

C. Planning and Analysis — Build the financial model, including budgeting, forecasting, and capital needs.

D. Reporting — Implement rules regarding auditor retention, auditor independence, and audit oversight by the Audit Committee of the Board of Directors.

E. Tax — Review the tax implications of the deal structure, domicile, SALT issues, and other pertinent factors.

F. Capital Structure — Assess tax and accounting issues related to capital structure and proper treatment of warrants.


Corporate Governance, Legal, and Compliance

It’s critically important that the Board of Directors and the Audit Committee understand what the regulatory environment will require of them in their oversight roles.


A. Review the background and qualifications of the independent directors, the Audit Committee chair, the lead director (if any), and the Board committees taken as a whole.

B. Review Audit Committee exchange listing standards, including independence, responsibilities, whistleblower procedures, and authority to engage independent counsel and other advisors, including for readiness services.

C. Review the background and qualifications of the initial SPAC Board, then the enlarged De-SPAC Board taken as a whole.

D. Assess potential and actual conflicts of interest of the sponsor, the SPAC and De-SPAC Board members, advisors, and auditors.

E. Review the company’s needs for investor relations, public relations, and shareholder and stakeholder ESG communications.

F. Review the choice of listing exchange (NYSE or NASDAQ) and their governance and other rules.

G. Create and use an array of legal, compliance, and administrative checklists that examine all critical elements of readiness.


Corporate Administration: Processes and Controls

A myriad of processes and controls must be developed and documented to define areas of risk to be mitigated.


A. Determine the level required for compliance with SOX Rule 404, based on market capitalization, to understand which processes need to be in place from Day 1.

B. Examine the cost-benefit of utilizing external versus internal accounting resources to develop the necessary internal audit function and audit committee oversight.

C. Complete a risk analysis of the financial processes to determine areas of focus and concern.

D. Ascertain that adequate D&O insurance is in place to provide full coverage for independent directors, as well as for all other directors and management.

E. Review the company’s IT strategy and policies regarding data privacy, cybersecurity, cloud strategy, disaster recovery, business continuity, and other related items.

F. Review the HR operating model and HR’s existing policies and procedures.

G. Review executive compensation policies, processes, and procedures related to management, the Board of Directors, committees, and the SEC, as structured by independent compensation experts’ disclosures.

G. Review nonfinancial regulatory compliance issues such as FCPA, CFIUS, and regulated-industry rules (if relevant). Also, review the key roles needed to support planned growth and compliance.


Corporate Strategy and Deal Advisory

Focus on post-transaction success through the implementation of a strong business strategy. Review the strategy for optimizing value creation and ensuring a successful transition.


A. Determine whether a strong team of market makers, analysts, and PIPE investors is in place.

B. Retain legal, financial, and accounting experts, as well as other advisors and underwriters.

C. Retain an expert consultant to assess and help implement target readiness pre-LOI.

D. Instill the ethos that the core M&A team, from search to execution, is critical to the future success of the venture.

E. Determine whether there is a detailed strategic plan for use of proceeds that supports the assumptions underlying the base case projections needed to support the target valuation.

F. Align accounting, consulting, and financial advisory teams to perform due diligence in a manner that integrates with the Z-SPAC readiness framework.

G. Review of the independent fairness opinion provided by a nationally recognized firm.

What They're Saying


  • I have such confidence in the quality of everything Jim does that we will be offering D&O insurance for SPACs and plan to charge significantly lower premiums for SPACs with a Z-SPAC Readiness Certification than we will for SPACs without one.

    Joe Taussig
    Founder, Taussig Capital Re
  • Leave it to Jim Zukin, the grandfather of fairness and solvency opinions, to enter the SPAC market with a new and much-needed professional-services solution to respond to issues raised about target-company projections and readiness.

    Doug Ellenoff
    Partner at Ellenoff Grossman & Schole, LLP