In this workout, it says, upon announcement of the merger of FE Solutions SPAC and Case Incorporated, 40% of the public shareholders have decided to redeem their SPAC shares. PIPE investments of 100 million has been arranged to ensure the merger company has sufficient cash post merger. PIPE fees are 4%, and the M&A advisory fees fee is 1% of target equity value. We are asked to draw up sources and uses of funds table. It then says, calculate the number of shares that need to be issued to complete the transaction.

So first of all, let's just work out those fees. So my PIPE fees are 4% multiplied by the pipe investments, and my m and a fees are 1% multiplied by the equity value of 655. Fantastic. Last up, before we get into our sources and uses of funds, I want to work out my SPAC cash that's available after those shareholders leave. So I had 56.5, however, I now need to subtract off of that. 40% multiply by and now I need to work out how much cash we actually had. Well, we had 5.5 million shares multiplied by share price of 10 per share.

But from that big pile of cash that we had, we then paid out some fees.

So they're going to get 40% back of that big pile of cash, less the fees, Leaving Us with 35.3 million SPAC cash after redemption.

So now we come to our sources and uses of funds, and I'm going to start by working on my sources. The first one that we have is our SPAC cash that we just calculated. We've got 35.3 million of cash.

We've then got the PIPE funding that was mentioned right up near the top of 100, and we're going to pay for this company by just doing an equity issuance. They will give us their shares, we will give them brand new shares. There won't be any cash involved. That means if I'm paying for them completely using an equity issuance, then I can just find their equity value of 655. So my total sources of funds, 790.3.

I know that my total uses needs to be the same. So we'll start off with what am I going to use my money for? The first one is to buy the company target company equity rollover, but I also need to pay some fees. Now, the PIPE fee we already calculated, the first thing we did M&A fee was the second thing that we did, But now we've got our deferred IPO fee. Now, these fees are not paid when the SPAC is initially set up, nor when it's IPOed, but they're only paid when the company actually makes an acquisition. So these are 3% of the share proceeds raised. There's our 3% and immediately above there's proceeds raised of 55 million.

So the last one that we're left with is cash to the balance sheet. Now you might think, oh, I've got my total sources and I've got most of my uses. I could just calculate this as a plug, but this is a bit like a balance sheet. If it's outta balance, it shows you an error. So if I just calculate it as a plug, it'll always balance and it might be hiding an error. So the cash to the balance sheet is initially going to be the SPAC proceeds that we still got, plus the PIPE. So let's go find those SPAC proceeds that we still got, 35.3 plus the PIPE investment of 100, but we've spent some of them on fees. So let's just subtract out those three fees. 1, 2, 3, meaning that our post acquisition balance sheet will have 123.1 million of cash available. Let's check the total uses balances with the total sources, and it does, you might ask why do we need a load of cash on the balance sheet? Well, remember, we're trying to buy a private company, take it public, and we're now going to try and invest in it, make this company grow and innovate and that hopefully the share price will shoot through the roof and make us lots of profit.

So that cash is there to help us do that.

The last one that we needed to do then was work out the number of shares issued. The PIPE, the 100 million we're receiving from them, they're going to get some shares back. So we need to take the 100 million and there it is, and then divide that by the value of it individual share, which is this 10 just here, we will be issuing 10 million shares to the PIPE.

We also need to issue some shares to the target shareholders. So we'll take the target company equity rollover. We need to issue them 655 million worth of shares. Each share is worth 10. So we divide by 10. We're going to issue them 65.5 million shares. So the total new shares issued will be 75.5, and this will have a dilutive effects upon SPAC shareholders and the sponsor.