The Z-SPAC Value Proposition

A Readiness Certification
Sets Your SPAC Apart

Zukin Certification Services, the SPAC industry’s first provider of SPAC readiness certification services, allows a SPAC to independently validate whether it has addressed the numerous readiness issues that can mean the difference between De-SPAC and dissolution. Our company was formed in 2021 to play an oversight role that safeguards sponsors, independent directors, and their advisors amidst the growing wave of SPAC litigation, regulatory oversight, and investor criticism.

Our accomplished team leverages the proprietary Z-SPAC Readiness Framework to assess whether a SPAC and the target company together are ready to perform as an operating public company post De-SPAC across broadly defined elements, including finance, corporate governance, administration and IT, and corporate strategy.

Z-SPAC Certification Services highlights potential “red-flag” issues and consults with SPACs on how to address readiness inhibitors prior to the De-SPAC in order to solidify its foundations to be that of a true operating public company.

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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.

Ushering In a New Era

Letter from the Chairman

December 2021

I am proud to announce the launch of Zukin Certification Services and the Z-SPAC Readiness Certification. By creating the first SPAC readiness certificate company, we are responding to the needs of the modern, evolving SPAC marketplace. By doing so, we hope to play a role in the industry’s maturation.

As the Co-Founder of Houlihan Lokey Howard & Zukin (“HLHZ,” now “Houlihan Lokey”; NYSE: HLI) the central theme of my 45-year investment banking and financial advisory career has been creating fundamental services with my world-class teams that improve the underpinning of financial transactions. The Z-SPAC Readiness Certification Service should serve to strengthen our financial markets, to the benefit of investors, sponsors, and boards of directors.

The FIRST SERVICE I launched with my HLHZ partners was fair-market-value opinions for an ESOP-sale of a company to an employee stock ownership plan. HLHZ advised more than 500 ESOP trustees on the buyouts.

The SECOND SERVICE is independent fairness opinions for lower-middle-market M&A transactions, where for many years we were the market leader. HLHZ acquired and dramatically expanded Mergerstat, one of the precursors of FactSet Mergerstat, which provides information on sales of private companies.

The THIRD SERVICE is solvency opinions. HLHZ first provided these opinions for independent directors and then for commercial lenders. HLHZ developed a three-part test for LBOs and leveraged recaps that assessed whether (1) fair-market-value assets exceeded liabilities, (2) there was a reasonable equity cushion, and (3) reasonable projections showed the company could repay its debts as they became due.

The FOURTH SERVICE is “rapid sequencing.” Negotiating the financial restructuring of all classes of debts to resolve an insolvency proceeding was an approach first developed by HLHZ’s financial restructuring group. I led the team that modified this approach while working with the IMF, as the Paris Club applied it to sovereign-debt restructuring; I later co-led teams that restructured the external debts of more than 20 countries.

The FIFTH SERVICE is the Z-SPAC Readiness Certification Service. This service weaves together the Four Elements of Readiness and their 30 components in a novel application of rapid sequencing. It is employed by our multidisciplinary team of super-senior experts in accounting, internal audit, regulatory compliance, legal, governance, and financial advisory. This essential offering is available to upper-tier SPACs seeking external validation of the quality of their preparation and requisite readiness to operate as a public company.

We look forward to having the opportunity to serve you.

Regards,

James Zukin

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"The central theme of my 45-year career has been creating fundamental services ... that improve the underpinning of financial transactions."

Readiness Is Essential

Who Benefits from the
Z-SPAC Certification Process?

The entire SPAC universe benefits from readiness certification:

  • Founders and sponsors who use the construct of readiness as the organizing paradigm for the De-SPAC process and who want to communicate this to targets, De-SPAC directors, and the markets.
  • Independent directors, who play a key role in overseeing the readiness process, sharing this responsibility with the founder and the Board of Directors through the De-SPAC.
  • PIPE and retail investors, who have become aware of the “red-flag" issues bedeviling several SPACs that are now the subject of shareholder litigation.
  • Targets that are being courted by several SPACs, as well as PE firms and strategic buyers in the most-active M&A market in memory.
  • Underwriters, accountants, lawyers, and consultants, as well as members of management who are looking to work with high-quality sponsors and the high-quality teams they surround themselves with.
  • D&O Insurance providers who seek to cover best-of-breed SPACs are all focused on the sponsor’s readiness plan.
Expertise You Can Count On

The Four Elements of Readiness

And Their 30 Components
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    01
    Finance, Reporting, and Tax
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    02
    Corporate Governance, Legal, and Compliance
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    03
    Corporate Administration: Processes and Controls
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    04
    Corporate Strategy and Deal Advisory
The Ultimate Differentiator

The Z-SPAC Readiness Certification

Underscore your unique story by confirming that you put readiness preparation front and center, setting yourself apart from uncertified SPACs.

If a sponsor has a Z-SPAC certification,

it signals they have prioritized readiness, among other first-order responsibilities.
it demonstrates support for the Audit Committee’s shared role in oversight and governance.
it communicates that a readiness-centered transition plan is in place.
it underscores the need for robust internal controls.

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Elements Of Readiness

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Essential Components

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Punchlist Items

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Average Years of Team Experience

Our Pedigree

Knowledge and Experience You Can Count On

We brought together a cross-disciplinary team to mirror the needs of our clients as they relate to the layered framework of readiness. Though we do not prepare our clients, we are proud to play our essential oversight role.

A Trusted Resource

Z-SPAC's Industry Insights

As our client, you’ll receive our proprietary Z-SPAC Directors Handbook, a collection of indispensable reading for the informed independent director, including

  • selected “red-flag” risks identified both in regulatory and in litigation contexts involving SPACs and recent IPOs.
  • the Four Elements of Readiness and their 30 components.
  • extensive readiness checklists for independent directors' use in their oversight role.
  • self-study guides and training modules designed to improve financial literacy.

Beginning in early 2022, we will be offering the handbook exclusively to our client SPAC sponsors, their Board, their Audit Committee and internal auditor, management, and advisors.

Outline

1. History and Evolution of the SPAC
2. SPAC Operations: An Illustrated Timeline
3. SPAC Structure
4. General SPAC Risks and Rewards
5. Valuation Risks
6. Case Study: Fairness Opinion
7. SPAC Outcomes: Top Performers, Worst Performers, Takeaways
8. Reimagining the SPAC

What They're Saying

Testimonials

  • 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 readiness to assume the burdens and duties of entering the public market.

    Doug Ellenoff
    Partner at Ellenoff Grossman & Schole, LLP