Dictionary
Every term in a SPAC filing, explained
41 definitions written the way a practitioner uses them rather than the way a textbook does. If a prospectus has confused you, the phrase is probably here.
All terms
- Anchor investor
- At-risk capital
- Blank-check company
- Business combination
- Class A shares
- Combination deadline
- De-SPAC
- Deferred underwriting fee
- Definitive agreement
- Dilution
- Earnout
- Extension
- Form 25-NSE
- Form 424B4
- Form 425
- Form 8-K
- Form S-1
- Form S-4
- Founder shares
- Liquidation
- Minimum cash condition
- Overfunded trust
- PIPE
- Premium or discount to trust
- Private placement warrants
- Promote
- Proxy statement
- Redemption
- Rights
- Separation
- SIC code
- SPAC
- SPAC arbitrage
- Sponsor
- Super 8-K
- Trust account
- Trust per share
- Underwriter
- Unit
- Warrant
- Warrant coverage
Structure
At-risk capital
The money the sponsor puts in to cover offering costs and fund the trust above the IPO price, lost entirely if no deal closes.
Blank-check company
The SEC's own term for a development-stage company with no specific business plan, which is how SPACs are classified and found.
Founder shares
The class of shares the sponsor buys before the IPO at nominal cost, typically 20% of the post-IPO share count.
Promote
The sponsor's founder stake expressed as a share of the combined company, the compensation for putting the deal together.
SPAC
A shell company that raises cash in an IPO and then has a fixed window to merge with a private business, or return the money.
The trust
Overfunded trust
A trust funded above the $10.00 unit price, so redemption begins above the offering price rather than at it.
Trust account
The segregated account holding the IPO proceeds, invested in short-dated government securities and released only on a closing or a liquidation.
Trust per share
The trust balance divided by the public shares outstanding, which is the amount a redeeming holder receives.
Securities
Class A shares
The shares sold to the public, carrying the right to redeem for a pro-rata share of the trust.
Private placement warrants
Warrants the sponsor buys separately at fair value to fund the vehicle's costs.
Rights
A sweetener converting into a fraction of a share automatically at closing, common on smaller offerings.
Unit
What a SPAC actually sells in its IPO: one share bundled with a fraction of a warrant, and sometimes a right.
Warrant
A right to buy a share at a fixed price, usually $11.50, exercisable only after a combination closes.
Warrant coverage
How much of a warrant comes attached to each unit, a direct read on demand at pricing.
The deal
Business combination
The merger that turns the shell and a private company into one listed operating business.
De-SPAC
The process, and the resulting company, once a SPAC has completed its combination.
Definitive agreement
The signed, binding contract to combine, the point at which a target stops being a rumour.
Earnout
Extra shares issued to target holders or the sponsor only if the stock hits agreed levels after closing.
Minimum cash condition
A closing condition requiring a floor of cash to survive redemptions, and a common reason deals collapse.
PIPE
A private placement raised alongside the combination to replace cash lost to redemptions and validate the price.
Filings
Form 25-NSE
The exchange's notice removing a security from listing, which usually marks the end of a liquidation.
Form 424B4
The final prospectus, filed once the offering prices, confirming the terms that actually apply.
Form 425
A filed communication about a pending business combination, including press releases and investor decks.
Form 8-K
The current report, used to disclose anything material between periodic reports.
Form S-1
The registration statement for the IPO, and the first public sighting of a new SPAC.
Form S-4
The registration statement covering the shares issued in the merger, containing the full deal terms.
Proxy statement
The document soliciting a shareholder vote, and the place redemption mechanics are set out.
SIC code
The SEC's industry classification. Code 6770, blank checks, is how the SPAC universe is enumerated.
Super 8-K
The 8-K filed on completion, containing the information an IPO prospectus would have carried.
People
Anchor investor
An institution that commits to a large portion of the IPO in exchange for founder shares.
Deferred underwriting fee
The part of the underwriting commission held back and paid only if a combination closes.
Sponsor
The entity that forms the SPAC, funds its costs, and holds the founder shares that pay off only if a deal closes.
Underwriter
The bank or banks that market and place the IPO, credited on the prospectus cover.
Outcomes
Combination deadline
The date in the charter by which a combination must close, or the trust is returned.
Extension
A shareholder-approved amendment giving the sponsor more time to close, almost always with a redemption window attached.
Liquidation
Returning the trust to public shareholders when no combination closes in time.
Redemption
A public shareholder's right to hand back shares for their pro-rata share of the trust, exercisable at a vote.
Trading
Dilution
The reduction in each share's claim on the combined company caused by founder shares, warrants and rights.
Premium or discount to trust
The difference between the market price and the trust per share, expressed as a percentage.
Separation
The point, usually 52 days after the IPO, when units split into their component securities.
SPAC arbitrage
Buying pre-deal SPACs below trust value to collect the spread and the interest, with redemption as the exit.
Where these definitions come from
Every entry describes how the term is actually used in SEC filings and on desks, not how a marketing page defines it. Where a figure is conventional rather than universal, the entry says so. Nothing here is investment advice, and none of it replaces reading the document in front of you. Start with what a SPAC is if you are new to the structure.