Tiberius freely admits in its filings for both Petro Search and Math Star that NOL carryforwards will probably be lost if the transaction closes.
This is a strong suggestion that shareholders in both deals are better off with a reverse merger that has at least the potential to realize some of the value of the NOLs than selling to Tiberius below cash and loosing the NOL value for sure.
In many instances, the NOLs are worth a multiple of the cash on the balance sheet.
Therefore, it makes sense not to liquidate but buy another business that is very profitable so that these profits can accumulate tax-free.
Some SPACs have actually been able to pull off reverse mergers rather than liquidate in their entirety.
These firms have wound down their business and are sitting on large hoards of cash.SPACs have the added advantage of a built-in deadline at which they will be liquidated.Spreads on SPACs have narrowed to small single digit annualized returns, but opportunities abound in other cash shells.Management has been trying for about a year to effect a reverse merger.As the SPAC experience shows, the environment has not been particularly favorable for such deals over the last year, and therefore calls for liquidation multiply.