UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the period ended September 30, 2015

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                  

Commission file number: 333-164313

Cambridge Capital Acquisition Corporation (Exact Name of Registrant as Specified in Its Charter)
Delaware	46-3774077
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

525 South Flagler Drive, Suite 201, West Palm Beach, FL 33401

(Address of principal executive offices)

(561) 932-1600

(Issuer’s telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of November 12, 2015, there were 10,534,625 shares of Common Stock, $0.0001 par value per share, outstanding.

CAMBRIDGE CAPITAL ACQUISITION CORPORATION

FORM 10-Q FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1.  Financial Statements
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Operations	2
Condensed Consolidated Statements of Changes in Stockholders’ Equity	3
Condensed Consolidated Statements of Cash Flows	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	20
Item 4. Controls and Procedures	20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	21
Item 1A. Risk Factors	21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 6. Exhibits	25

Part I Financial Information

Item 1. Financial Statements

Cambridge Capital Acquisition Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	As of
	September 30, 2015			December 31, 2014
	(unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	47,947		$	47,185
Prepaid expenses		-			2,445
Total current assets		47,947			49,630
Restricted investments and cash equivalents held in trust account		81,310,750			81,339,095
Total assets	$	81,358,697		$	81,388,725
Liabilities, Redeemable Common Stock and Stockholders' Equity
Current Liabilities:
Accrued expenses		558,210			139,342
Accrued Delaware franchise tax		170,529			86,529
Note payable from stockholder		350,000			-
Accrued expenses - related party		139,199			9,598
Total liabilities		1,217,938			235,469
Commitments
Common stock, subject to possible conversion or tender, 7,439,153and7,536,766 shares at conversion value at September 30, 2015 and December 31, 2014, respectively		75,140,758			76,153,255
Stockholders' Equity:
Preferred stock, $.0001 par value; 1,000,000 shares authorized; none issued and outstanding		-			-
Common stock, $.0001 par value; 40,000,000 shares authorized; 3,095,472 shares issued and   outstanding (excluding 7,439,153 shares subject to possible conversion or tender) at September 30, 2015 and 2,997,859 shares issued and outstanding (excluding 7,536,766 shares subject to possible conversion or tender) at December 31, 2014		310			299
Additional paid-in capital		6,935,215			5,922,729
Accumulated deficit		(1,935,524	)		(923,027	)
Total stockholders' equity		5,000,001			5,000,001
Total liabilities, redeemable common stock and stockholders' equity	$	81,358,697		$	81,388,725

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Cambridge Capital Acquisition Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
Formation and operating costs
Legal and professional fees	$	293,049		$	49,834		$	528,809		$	257,724
General and administrative expenses		126,666			148,850			406,024			356,592
Office expense - related party		30,000			30,000			90,000			90,000
Loss from operations		(449,715	)		(228,684	)		(1,024,833	)		(704,316	)
Interest income		4,741			5,460			12,336			25,857
Net loss	$	(444,974	)	$	(223,224	)	$	(1,012,497	)	$	(678,459	)
Weighted average shares outstanding, basic and diluted(1)		3,051,466			2,949,447			3,026,916			2,926,336
Basic and diluted net loss per common share	$	(0.15	)	$	(0.08	)	$	(0.33	)	$	(0.23	)

(1) For the three and nine months ended September 30, 2015 and 2014, weighted average shares outstanding excluded 7,439,153 and 7,563,316, respectively, shares subject to possible conversion or tender.

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Cambridge Capital Acquisition Corporation and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders' Equity

					Additional					Total
	Common Stock				Paid-In		Deficit			Stockholders'
	Shares		Amount		Capital		Accumulated			Equity
Balance - December 31, 2014		2,997,859	$	299	$	5,922,729	$	(923,027	)	$	5,000,001
Change in net proceeds subject to possible redemption(1)		97,613		11		1,012,486		-			1,012,497
Net loss		-		-		-		(1,012,497	)		(1,012,497	)
Balance, September 30, 2015 (unaudited)		3,095,472	$	310	$	6,935,215	$	(1,935,524	)	$	5,000,001

(1) As a result of changes in the Company's net tangible assets, a total of 7,439,153 shares of common stock were subject to  possible conversion or tender at September 30, 2015.

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Cambridge Capital Acquisition Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Nine Months Ended September 30,
	2015			2014
Cash flows from operating activities:
Net loss	$	(1,012,497	)	$	(678,459	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of discount on investments held in trust		(11,753	)		(25,820	)
Changes in operating assets and liabilities:
Prepaid expenses		2,445			15,362
Accrued expenses		502,868			198,636
Accrued expenses - related party		129,601			4,906
Net cash used in operating activities		(389,336	)		(485,375	)
Cash flows from investing activities:
Purchases of restricted investments and cash equivalents  held in Trust Account		(406,514,172	)		(243,958,629	)
Proceeds from maturity of restricted investments and cash equivalents held in Trust Account		406,554,270			243,958,629
Net cash provided by investing activities		40,098			-
Cash flows from financing activities:
Proceeds from note payable from stockholder		350,000			-
Payment of offering costs		-			(46,292	)
Net cash provided by (used in) financing activities		350,000			(46,292	)
Net decrease in cash and cash equivalents		762			(531,667	)
Cash and cash equivalents - beginning		47,185			803,613
Cash and cash equivalents - ending	$	47,947		$	271,946

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Organization, Plan of Business Operations, Liquidity and Going Concern

Organization and Plan of Business Operations

Cambridge Capital Acquisition Corporation (“Cambridge” or the “Company”) was incorporated in Delaware on October 1, 2013 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities (a “Business Combination”). The Company’s efforts to identify a target business are not limited to a particular industry or geographic region.

On September 6, 2015, Cambridge entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) by and among Cambridge, Cambridge Holdco Corp., Cambridge’s wholly-owned subsidiary (“Holdco”), Ability Computer & Software Industries Ltd., an Israeli company (“Ability”) and Ability’s shareholders (the “Shareholders”). The Merger Agreement provides for a business combination transaction by means of (i) the merger of Cambridge with and into Holdco, with Holdco surviving and becoming a new public company and (ii) the subsequent exchange of 100% of the ordinary shares of Ability by the Shareholders for ordinary shares of Holdco (the “Merger”). Under the Merger Agreement, the Shareholders will receive their pro rata portion of: (i) 17,173,267 ordinary shares of Holdco; (ii) $18,150,000 in cash; and (iii) an additional number of ordinary shares of Holdco to be issued upon and subject to Ability achieving certain net income targets following the share exchange. See Note 4 – Merger Agreement for a further discussion of the Merger Agreement.

All activity through September 30, 2015 relates to the Company’s formation, the offering described below and the Company’s identification and investigation of prospective target businesses with which to consummate a Business Combination.

The registration statement for the Company’s initial public offering (“Public Offering”) was declared effective on December 17, 2013. On December 23, 2013, the Company consummated the Public Offering of 7,000,000 units (“Units”) at $10.00 per Unit and received net proceeds of $67,217,475 after payment of underwriters discount of $2,275,000 and offering expenses of $507,525 and simultaneously raised $4,275,000 through the issuance of 427,500 private units (“Private Units”) at $10.00 per unit to the Company’s initial stockholders (collectively, the “Sponsors”) and the underwriters (and/or their respective designees) in a private placement (See Note 5 – Public Offering and Private Placement). Subsequent to December 31, 2013, the Company paid $46,292 in additional offering expenses, for a total amount of offering expenses paid of $553,817.

On December 23, 2013, the underwriters exercised their over-allotment option and on December 30, 2013, the Company consummated the closing of the over-allotment option (the “Overallotment”). The Public Offering and the Overallotment are collectively referred to as the “Offering.” The Company sold 1,050,000 units pursuant to the Overallotment at an offering price of $10.00 per Unit, generating net proceeds of $10,158,750 after payment of underwriters’ discount of $341,250. In a private placement that took place simultaneously with the consummation of the exercise of the over-allotment option, certain of the Sponsors and the underwriters purchased an additional 44,625 Private Units at $10.00 per Private Unit generating gross proceeds of $446,250. The private placements consummated simultaneously with the Offering are collectively referred to as the “Private Placement.”

5

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Organization, Plan of Business Operations, Liquidity and Going Concern, continued

Organization and Plan of Business Operations, continued

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering and the Private Placement, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to effect the Merger or any other Business Combination successfully. The Company’s securities are listed on the Nasdaq Capital Markets (“NASDAQ”). Pursuant to the NASDAQ listing rules, the target business or businesses that the Company acquires must collectively have a fair market value equal to at least 80% of the balance of the funds in the Trust Account (defined below) at the time of the execution of a definitive agreement for its initial Business Combination, although the Company may acquire a target business whose fair market value significantly exceeds 80% of the Trust Account balance.

Following the closing of the Overallotment on December 30, 2013, an amount of $81,305,000 (or $10.10 per Unit sold in the Offering), including the proceeds of the Private Placement, was placed in trust (the “Trust Account”) and was subsequently invested in United States government treasury bills having a maturity of 180 days or less or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, that invest solely in U.S. treasuries until the earlier of the consummation of the initial Business Combination and the Company’s failure to consummate a Business Combination within the prescribed time. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The Company’s executive officers have agreed that they will be jointly and severally liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by the Company for services rendered, contracted for or products sold to the Company. However, they may not be able to satisfy those obligations should they arise. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. In addition, (1) interest income on the funds held in the Trust Account can be released to the Company to pay its income and other tax obligations and (2) interest income on the funds held in the Trust Account can be released to the Company to pay for its working capital requirements in connection with searching for a Business Combination.

The Company will seek shareholder approval of the Merger or any other Business Combination at a meeting called for such purpose at which shareholders may seek to convert their shares into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. The Company will proceed with the Merger or any other Business Combination only if it has net tangible assets of at least $5,000,001 upon consummation of the Merger or any other Business Combination and a majority of the outstanding shares of common stock of the Company voted are voted in favor of the Merger or any other Business Combination. In connection with any shareholder vote required to approve the Merger or any other Business Combination, the Sponsors agreed (i) to vote any of their respective shares, including the 2,012,500 shares of common stock sold to the Sponsors in connection with the organization of the Company (the “Sponsors’ Shares”), shares of common stock sold to Sponsors in connection with the Private Placement, and any shares of common stock which were initially issued in connection with the Offering, whether acquired in or after the effective date of the Offering, in favor of the initial Business Combination and (ii) not to convert such respective shares into a pro rata portion of the Trust Account.

The Company’s amended and restated Certificate of Incorporation provides that the Company will continue in existence only until December 23, 2015. If the Company has not completed a Business Combination by such date, the Company will, as promptly as possible but not more than ten business days thereafter, redeem from holders of the outstanding shares sold in the Offering (“Public Stockholders”) 100% of such shares for a pro rata portion of the funds held in the Trust Account and then seek to dissolve and liquidate. In the event of a liquidation, the Public Stockholders will be entitled to receive a full pro rata interest in the Trust Account (initially anticipated to be $10.10 per share after the closing of the Overallotment, plus any pro rata interest earned on the Trust Account not previously released to the Company). The Company’s Sponsors and purchasers of the Private Units have agreed not to participate in such redemption, except with respect to any shares of common stock which were issued in connection with the Offering.

6

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Organization, Plan of Business Operations, Liquidity and Going Concern, continued

Terminated Transaction

On December 1, 2014, the Company, together with two newly formed direct and indirect subsidiaries, entered into a Business Combination Agreement (“Parakou Agreement”) with Parakou Tankers, Inc., a Marshall Islands corporation (“Parakou”).

On May 6, 2015, the Company and Parakou terminated the Parakou Agreement and are no longer pursuing merger discussions.

Liquidity and Going Concern

As of September 30, 2015, the Company had $47,947 in its operating bank accounts and $81,310,750 in restricted cash and equivalents held in trust to be used for an initial Business Combination or to convert its common shares. As of September 30, 2015, the Company has withdrawn $40,108 from interest income on the trust account for its working capital and tax obligations. As of September 30, 2015, $5,750 of the amount on deposit in the trust account represents interest income, which was available to be withdrawn as described above.

Until consummation of its initial Business Combination, the Company will be using the funds not held in the trust account, plus the interest earned on the trust account balance (net of income, and other tax obligations) that may be released to the Company to fund its working capital requirements, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

The Company will need to raise additional capital through loans or additional investments from its shareholders, officers, directors, or third parties. None of the shareholders, officers or directors are under any obligation to advance funds to, or to invest in, the Company. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.

On March 6, 2015, June 8, 2015, August 3, 2015 and August 26, 2015, the Company issued promissory notes (the “Notes”) to Benjamin Gordon, the Company’s Chief Executive Officer, evidencing loans by Mr. Gordon of $70,000, $100,000, $100,000 and $80,000, respectively. See Note 6 – Commitments and Contingencies for a further discussion of the Notes.

Note 2 — Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. For further information refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with Securities and Exchange Commission on March 2, 2015.

7

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 — Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Cambridge, Holdco, and Merger Sub. All significant intercompany transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains cash balances that may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation limits. The Company maintains its cash deposits with major financial institutions.

Restricted Investments and Cash Equivalents Held in Trust Account

The amounts held in the Trust Account represent substantially all of the proceeds of the Offering and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination.

As of September 30, 2015, investment securities held in the Trust Account consisted of $81,305,459 in United States treasury securities, which matured on October 8, 2015, and $5,291 of cash equivalents. On October 8, 2015, upon the maturity of the Company’s U.S. Treasury Bills, the Company received $81,306,000 in proceeds. As of December 31, 2014, investment securities held in the Trust Account consisted solely of $81,339,095 of cash equivalents.

From time to time, the Company may invest the amounts held in the Trust Account in United States Treasury securities. The Company classifies its United States Treasury securities as held-to-maturity in accordance with ASC 320 “Investments – Debt and Equity Securities”. Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity.  Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheet and are adjusted for the accretion of discounts.

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations.  Interest income is recognized when earned.

The carrying amount, gross unrealized holding gains and fair value of held-to-maturity securities at September 30, 2015 are as follows:

Held-to-maturity:	Carrying Amount		Gross unrealized Holding Gains		Fair Value
U.S. Treasury Bills	$	81,305,459	$	541	$	81,306,000

8

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 — Significant Accounting Policies, continued

Common Stock Subject to Possible Conversion

The Company accounts for its common stock subject to possible conversion in accordance with the guidance provided in ASC 480 “Distinguishing Liabilities from Equity”.   Common stock subject to mandatory conversion (if any) is classified as a liability instrument and is measured at fair value. Conditionally convertible common stock (including common stock that features conversion rights that are either within the control of the holder or subject to conversion upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain conversion rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly at September 30, 2015 and December 31, 2014, the common stock subject to possible conversion is presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

Loss Per Share

Loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the periods. Common shares subject to possible redemption of 7,439,153 and 7,563,316 for the three months ended September 30, 2015 and 2014, respectively, and 7,439,153 and 7,563,316 for the nine months ended September 30, 2015 and 2014, respectively, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the trust earnings. The Company has not considered the effect of (i) warrants sold in the Public Offering and Private Placement to purchase 8,522,125 shares of the Company’s common stock and (ii) 420,000 shares of common stock and warrants to purchase 420,000 common shares included in the unit purchase option sold to the underwriter, in the calculation of diluted loss per share, since the exercise of the warrants is contingent on the occurrence of future events.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Material estimates include the Company’s estimate of the value of the unit purchase option issued to the underwriter of the Public Offering.

Income Taxes

The Company accounts for income taxes under ASC Topic 740 “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is required to file income tax returns in the United States (federal) and in various state and local jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Since the Company was incorporated on October 1, 2013, the evaluation was performed for the 2014 and 2013 tax years, which will be the only periods subject to examination. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position.

9

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 — Significant Accounting Policies, continued

Income Taxes, continued

The Company’s policy for recording interest and penalties associated with audits is to record such expense as a component of income tax expense. There were no amounts accrued for penalties or interest as of or for the nine months ended September 30, 2015. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of September 30, 2015 through the date which these financial statements were issued. Based upon the review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

Note 4 — Merger Agreement

On September 6, 2015, Cambridge, Holdco, Ability and the Shareholders entered into the Merger Agreement.

The Merger Agreement provides for (i) the merger of Cambridge with and into Holdco, with Holdco surviving and becoming a new public company and (ii) the subsequent exchange of 100% of the ordinary shares of Ability by the Shareholders for ordinary shares of Holdco. Under the Merger Agreement, the Shareholders will receive their pro rata portion of: (i) 17,173,267 ordinary shares of Holdco; (ii) $18,150,000 in cash; and (iii) an additional number of ordinary shares of Holdco to be issued upon and subject to Ability achieving certain net income targets following the share exchange, as describe below. Of the shares to be issued, 16,693,267 ordinary shares will be issued to the Shareholders (of which 480,000 will be placed in escrow to be used as consideration for the purchase of the joint venture partner) and 480,000 shares will be issued to Migdal Underwriting and Business Initiatives Ltd.

The Shareholders will be entitled to receive additional Holdco shares based on Ability’s achievement of specified net income targets in the fiscal years ending December 31, 2015, 2016, 2017 and 2018. The following table sets forth the net income targets and the number of Holdco shares issuable to the Shareholders upon the achievement of such targets:

Year ending December 31,	Net Income Target		Number of Holdco Shares
2015	$	27,000,000		3,600,000
2016	$	40,000,000		1,850,000
2017	$	60,000,000		2,000,000
2018	$	80,000,000		1,000,000

In the event that Holdco fails to satisfy the net income target for any fiscal year but net income for such fiscal year is ninety percent (90%) or more of the net income target for such fiscal year, then Holdco shall issue to the Shareholders, in the aggregate, such number of Holdco shares equal to the product obtained by (x) the number of Holdco shares that would have been issued to the Shareholders had the net income target been achieved multiplied by (y) the quotient obtained by (A) the net income for such fiscal year divided by (B) the net income target for such fiscal year. For illustration, if the net Income for the 2015 fiscal year equals $24,300,000, the number of Holdco shares issuable to the Shareholders for the 2015 net income target shall equal 3,240,000 Holdco shares.

10

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 4 — Merger Agreement, continued

In the event that Holdco fails to satisfy the 2015 net income target but satisfies the 2016 net income target, then Holdco shall issue to the Shareholders, in addition to the Holdco shares required to be issued by Holdco as a result of Holdco achieving the 2016 net income target, the Holdco shares relating to the net income target. In addition, (i) if Holdco fails to satisfy the 2015 net income target but net income for such fiscal year is ninety percent (90%) or more of the 2015 net income target and net income for 2016 is a higher percentage of the 2016 net income target, then Holdco shall issue to the Shareholders, in addition to the pro rata Holdco shares required to be issued for the 2016 net income target, such number of Holdco shares for 2015 based on the difference between the percentage of net income for 2016 as compared to the 2016 net income Target and the Net Income for 2015 as compared to the 2015 Net Income target, or (ii) if Holdco fails to satisfy the 2015 net income target and net income for such fiscal year is less than ninety percent (90%) of the 2015 net income target but net income for 2016 is ninety percent (90%) or more of the 2016 net income target, then Holdco shall issue to the Shareholders, in addition to the pro rata of the Holdco shares relating to the 2016 net income target, such number of Holdco shares for 2015 based on the same percentage of net income for 2016 as compared to the 2016 net income target.

Under the Merger Agreement, each of the Shareholders shall have the right, on one occasion during the 90 day period following the second anniversary of the closing of the merger, to put to Holdco all or part of his pro rata portion of 1,173,267 ordinary shares of Holdco he receives in the share exchange for an amount in cash equal to (1) (x) the number of shares being put multiplied by (y) $10.10 per share plus (2) his pro rata portion of interest, if any, and subject to the pre-ruling granted by the Israel Tax Authority, as generated in the put option escrow account as described below. $11,850,000 shall be deposited into an escrow account, referred to as the put option escrow account, by Holdco at closing of the merger to fund the payment of the purchase price for the put if it is exercised.

Ability will declare and pay a dividend to the Shareholders of $11 million prior to the closing of the merger, which dividend shall be paid from the retained earnings of Ability.

Upon the consummation of the transactions described herein, assuming approval of Cambridge stockholders at a special meeting to be called for such purpose, Holdco will be the new public entity and will change its name to a name to be determined by the parties prior to closing.

11

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5 — Public Offering and Private Placement

On December 23, 2013 and December 30, 2013, the Company sold 7,000,000 and 1,050,000 Units, respectively, at an offering price of $10.00 per Unit generating gross proceeds of $70,000,000 and $10,500,000, respectively, in the Offering. Each Unit consisted of one share of common stock of the Company and one Warrant to purchase one share of common stock of the Company (“Warrant”). Each Warrant entitles the holder to purchase one share of common stock at a price of $11.50 upon the Company’s completion of its initial Business Combination and expiring on December 17, 2018. The Company may redeem the Warrants at a price of $0.01 per Warrant upon 30 days’ notice, only in the event that the last sale price of the shares of common stock is at least $17.50 per share for any 20 trading days within a 30-trading day period (“30-Day Trading Period”) ending on the third day prior to the date on which notice of redemption is given, provided there is a current registration statement in effect with respect to the shares of common stock underlying such Warrants commencing five business days prior to the 30-Day Trading Period and continuing each day thereafter until the date of redemption. If the Company redeems the Warrants as described above, management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In accordance with the warrant agreement relating to the Warrants sold and issued in the Offering, the Company is only required to use its best efforts to maintain the effectiveness of the registration statement covering the Warrants. If a registration statement is not effective within 90 days following the consummation of a Business Combination, Warrant holders may, beginning on the 91st day and until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis. In the event that a registration statement is not effective at the time of exercise, the holder of such Warrant shall not be entitled to exercise such Warrant for cash and in no event (whether in the case of a registration statement being effective or otherwise) will the Company be required to net cash settle the Warrant exercise.

On December 23, 2013 and December 30, 2013, the Company sold 427,500 and 44,625 Private Units, respectively, at an offering price of $10.00 per Private Unit generating gross proceeds of $4,275,000 and $446,250, respectively, in the Private Placement. The Private Units are identical to the Units sold in the Offering except the warrants included in the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, the holders of the Private Units have agreed (A) to vote the shares underlying their Private Units in favor of any proposed Business Combination, (B) not to propose, or vote in favor of, an amendment to the Company’s amended and restated certificate of incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of such a Business Combination, (C) not to convert any shares underlying the Private Units into the right to receive cash from the trust account in connection with a stockholder vote to approve an initial Business Combination or a vote to amend the provisions of the Company’s amended and restated certificate of incorporation relating to stockholders’ rights or pre-Business Combination activity and (D) that the shares underlying the Private Units shall not participate in any liquidating distribution upon winding up if a Business Combination is not consummated. The purchasers have also agreed not to transfer, assign or sell any of the private units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of the Company’s initial Business Combination.

12

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5 — Public Offering and Private Placement, continued

The Sponsors and purchasers of the Private Units are entitled to registration rights with respect to their initial shares and the Private Units purchased in the Private Placement. The holders of the majority of the initial shares are entitled to demand that the Company register these shares at any time commencing three months prior to the first anniversary of the consummation of a Business Combination. The holders of the Private Units (and underlying securities) are entitled to demand that the Company register these securities at any time after the Company consummates a Business Combination. In addition, the Sponsors and purchasers of the Private Units have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination.

Pursuant to an agreement with the underwriters of the Offering (the “Underwriting Agreement”), the Company paid 3.25% of the gross proceeds of the Offering or $2,616,250 as underwriting discounts and commissions. The Company has further engaged the representative of the underwriters (“Representative”) as an investment banker to provide the Company with merger and acquisition services in connection with its initial Business Combination. Pursuant to this arrangement, the Representative will, if requested, advise and assist the Company in reviewing potential targets with which the Company may consummate a Business Combination as well as structuring the terms of the Business Combination and negotiating the terms of the letter of intent and/or definitive agreement relating to such Business Combination (but not for purposes of finding and/or locating potential targets for its Business Combination).  If requested by the Company, the Representative will participate directly in negotiations, review marketing plans and projections of the target, analyze and advise on the financial implications of the transaction, and arrange meetings with and prepare materials for investors. The Company will pay the Representative a cash fee for such services upon the consummation of its initial Business Combination in an amount equal to $2,415,000 (representing 3.0% of the total gross proceeds raised in the Offering (exclusive of any applicable finders’ fees which might become payable)).

In connection with the closing of the Offering, the Company sold to the underwriter and its designees, for $100, unit purchase options to purchase up to a total of 420,000 units exercisable at $10.00 per unit (or an aggregate exercise price of $4,200,000) commencing on the consummation of a Business Combination. The unit purchase option expires on December 17, 2018. The units issuable upon exercise of these options are identical to the Units sold in the Offering. The holders of the unit purchase options have demand and “piggy back” registration rights for periods of five and seven years, respectively, from the effective date of the Public Offering, including securities directly and indirectly issuable upon exercise of the unit purchase option.

The Company has accounted for the fair value of the unit purchase options, inclusive of the receipt of a $100 cash payment, as an expense of the Offering resulting in a charge directly to stockholders’ equity. The Company has determined that the fair value of this unit purchase options was approximately $1,402,485 (or $3.34 per Unit) using the Black-Scholes option-pricing model. The fair value of the unit purchase options was estimated as of the date of grant using the following assumptions: (1) expected volatility of 35%, (2) risk-free interest rate of 1.68% and (3) expected life of five years. The unit purchase options may be exercised for cash or on a “cashless” basis, at the holders’ option (except in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described above), such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying Warrants and the market price of the Units and underlying shares of common stock) to exercise the unit purchase option without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the unit purchase options or the Warrants underlying the unit purchase options. The holders of the unit purchase options will not be entitled to exercise the unit purchase options or the Warrants underlying the unit purchase options unless a registration statement covering the securities underlying the unit purchase options is effective or an exemption from registration is available. If the holders are unable to exercise the unit purchase options or underlying Warrants, the unit purchase options or Warrants, as applicable, will expire worthless.

13

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 — Commitments and Contingencies

Office Space

The Company presently occupies office space provided by an affiliate of the Company’s Chief Executive Officer (the “Affiliate”). Such Affiliate has agreed that, until the Company consummates a Business Combination, it will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company has agreed to pay such Affiliate $10,000 per month for such services commencing on December 17, 2013. During the three and nine months ended September 30, 2015, the Company has accrued $30,000 and $90,000 to the aforementioned Affiliate, which is reflected in the Statement of Operations as Office Expense - Related Party. As of September 30, 2015, the Company included in Accrued Expenses – Related Party $139,199 due to the Affiliate representing the unpaid portion of the administrative fee along with unpaid reimbursable expenses.

Legal Proceedings

On March 24, 2015, the Company, the members of the Company’s board of directors and Parakou were named as defendants in a putative class action and derivative lawsuit captioned Brian Levy v. Cambridge Capital Acquisition Corp., et al., No. 2015 CA 003339. The complaint was filed in the Circuit Court of the 15th Judicial Circuit of Palm Beach County, Florida (the “Action”) by a person identifying himself as a stockholder of Cambridge.

The complaint generally alleged, among other things, that the members of the Cambridge board of directors breached their fiduciary duties to Cambridge stockholders by approving the Parakou Mergers. The complaint also alleged that there were various conflicts of interest in the transaction and that such conflicts of interest were not adequately disclosed to stockholders in the definitive proxy statement/prospectus that the Company filed with the SEC on March 27, 2015 (the “Proxy Statement/Prospectus”). The Action sought injunctive relief, damages and reimbursement of costs, among other remedies.

On April 9, 2015, the plaintiff in the Action filed a motion for a preliminary injunction seeking to enjoin temporarily the closing of the Mergers. On April 15, 2015, the circuit judge set a hearing date of April 17, 2015 for an emergency hearing on the motion for preliminary injunction.

The Company, under the advice of legal counsel, believed that the Action was without merit and that no further disclosure was required to supplement the Proxy Statement/Prospectus under applicable laws. However, to eliminate certain burdens, expenses and uncertainties, on April 16, 2015, defendants in the Action entered into a Memorandum of Understanding regarding the settlement of claims asserted in the Action and on April 17, 2015, the plaintiff in the Action filed a notice of withdrawal of its emergency motion for preliminary injunction and unopposed motion to cancel the hearing. Shortly thereafter the Company terminated the Mergers with Parakou and the plaintiff took no further action.

On October 15, 2015, the plaintiff filed an amended complaint against Cambridge, Holdco, the members of Cambridge’s board of directors and Ability.

The amended complaint generally alleges, among other things, that the members of the Cambridge board of directors breached their fiduciary duties to Cambridge stockholders by approving the contemplated merger with Ability and that Ability is aiding and abetting the Cambridge board of directors in the alleged breaches of their fiduciary duties. The complaint also alleges that Cambridge was obligated to liquidate on June 23, 2015 and redeem the outstanding public shares from the funds held in the trust fund and that the efforts to violate Cambridge’s amended and restated certificate of incorporation are ultra vires and therefore void acts. The complaint further alleges that Cambridge’s directors have various conflicts of interest in the transaction and that such conflicts of interest are not adequately disclosed to stockholders in the definitive proxy statement/prospectus that the Company filed with the SEC on September 17, 2015 (the “Proxy Statement/Prospectus”). The Action seeks injunctive relief, damages and reimbursement of fees and costs, among other remedies.

The Company believes that it is reasonably possible that the Action could result in a material loss. However, the Company is not able to estimate the amount. At September 30, 2015, no amounts have been accrued on the Company’s condensed consolidated financial statements in connection with this Action.

14

CAMBRIDGE CAPITAL ACQUISITION CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 — Commitments and Contingencies, continued

Legal Matters

The Company has engaged a law firm to assist the Company with its legal matters in identifying, negotiating, and consummating a Business Combination as well as assisting with other legal matters. In connection with the engagement, the Company has agreed to pay the law firm $3,000 per month plus additional legal fees not to exceed $100,000 per calendar year. Of this amount, $148,000 has been included in accrued expenses as of September 30, 2015. The Company will also pay the law firm an additional cash fee for its services, contingent upon the consummation of a Business Combination. If a Business Combination does not occur, the Company will not be required to pay this contingent fee. As of September 30, 2015, the Company estimates the amount of this contingent fee to be approximately $700,000. There can be no assurance that the Company will complete the merger with Ability or any other Business Combination.

Promissory Notes

On March 6, 2015, June 8, 2015, August 3, 2015 and August 26, 2015, the Company issued the Notes to Benjamin Gordon to evidence loans of $70,000, $100,000, $100,000 and $80,000, respectively, made by Mr. Gordon to the Company. The Notes bear no interest and the principal balance is due and payable upon the consummation of a Business Combination. Furthermore, at the consummation of a Business Combination, Mr. Gordon has the option to convert any or all of the Notes into additional Private Units of the Company at a rate of $10.00 per Private Unit.

Note 7 — Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors.

As of September 30, 2015, there are no shares of preferred stock issued or outstanding.

Common Stock

The Company is authorized to issue 40,000,000 shares of common stock with a par value of $0.0001 per share.

In connection with the organization of the Company, on December 23, 2013, the Sponsors Shares, consisting of a total of 2,012,500 shares of the Company’s common stock were sold to the Sponsors at a price of approximately $0.01 per share for an aggregate of $25,000. This number included an aggregate of 262,500 shares that would have been subject to forfeiture if the over-allotment option had not been exercised in full by the underwriters. On December 23, 2013, the underwriters exercised their overallotment option and such option was fully closed on December 30, 2013. As a result, no shares remain subject to forfeiture.

At September 30, 2015, 3,095,472 shares of the Company’s common stock were issued and outstanding, excluding 7,439,153 shares subject to possible conversion or tender. At December 31, 2014, 2,997,859 shares of the Company’s common stock were issued and outstanding, excluding 7,536,766 shares subject to possible conversion. The Sponsors Shares were placed into an escrow account maintained by Continental Stock Transfer and Trust Company, acting as escrow agent. Subject to certain limited expectations, these shares will not be transferable during the escrow period. Such shares will be released from escrow on the first anniversary of the closing date of the initial Business Combination, or earlier upon the occurrence of certain events.

15

Item 2. Management’s Discussion and Analysis.

The following discussion should be read in conjunction with our financial statements and footnotes thereto contained in this report.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.  References to “Cambridge,” “we”, “us”, “our” or the “Company” are to Cambridge Capital Acquisition Corporation, except where the context requires otherwise.  The following discussion should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this report.

Overview

We are a Delaware blank check company incorporated on October 1, 2013 formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar Business Combination with one or more target businesses or entities (a “Business Combination”).

Merger Agreement

On September 6, 2015, we entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) with Cambridge Holdco Corp., our wholly-owned subsidiary (“Holdco”), Ability Computer & Software Industries Ltd., an Israeli company (“Ability”) and Ability’s shareholders.

The Merger Agreement provides for (i) the merger of Cambridge with and into Holdco, with Holdco surviving and becoming a new public company and (ii) the subsequent exchange of 100% of the ordinary shares of Ability by its shareholders for ordinary shares of Holdco. Under the Merger Agreement, the Ability shareholders will receive their pro rata portion of: (i) 17,173,267 ordinary shares of Holdco; (ii) $18,150,000 in cash; and (iii) an additional number of ordinary shares of Holdco to be issued upon and subject to Ability achieving certain net income targets following the share exchange, as describe below. Of the shares to be issued, 16,693,267 ordinary shares will be issued to the Ability shareholders (of which 480,000 will be placed in escrow to be used as consideration for the purchase of the joint venture partner) and 480,000 shares will be issued to Migdal Underwriting and Business Initiatives Ltd.

The Ability shareholders will be entitled to receive additional Holdco shares based on Ability’s achievement of specified net income targets in the fiscal years ending December 31, 2015, 2016, 2017 and 2018. The following table sets forth the net income targets and the number of Holdco shares issuable to the Ability shareholders upon the achievement of such targets:

Year ending December 31,	Net Income Target		Number of Holdco Shares
2015	$	27,000,000		3,600,000
2016	$	40,000,000		1,850,000
2017	$	60,000,000		2,000,000
2018	$	80,000,000		1,000,000

In the event that Holdco fails to satisfy the net income target for any fiscal year but net income for such fiscal year is ninety percent (90%) or more of the net income target for such fiscal year, then Holdco shall issue to the Ability Shareholders, in the aggregate, such number of Holdco shares equal to the product obtained by (x) the number of Holdco shares that would have been issued to the Ability Shareholders had the net income target been achieved multiplied by (y) the quotient obtained by (A) the net income for such fiscal year divided by (B) the net income target for such fiscal year. For illustration, if the net Income for the 2015 fiscal year equals $24,300,000, the number of Holdco shares issuable to the Ability Shareholders for the 2015 net income target shall equal 3,240,000 Holdco shares.

16

In the event that Holdco fails to satisfy the 2015 net income target but satisfies the 2016 net income target, then Holdco shall issue to the Ability Shareholders, in addition to the Holdco shares required to be issued by Holdco as a result of Holdco achieving the 2016 net income target, the Holdco shares relating to the net income target. In addition, (i) if Holdco fails to satisfy the 2015 net income target but net income for such fiscal year is ninety percent (90%) or more of the 2015 net income target and net income for 2016 is a higher percentage of the 2016 net income target, then Holdco shall issue to the Ability Shareholders, in addition to the pro rata Holdco shares required to be issued for the 2016 net income target, such number of Holdco shares for 2015 based on the difference between the percentage of net income for 2016 as compared to the 2016 net income Target and the Net Income for 2015 as compared to the 2015 Net Income target, or (ii) if Holdco fails to satisfy the 2015 net income target and net income for such fiscal year is less than ninety percent (90%) of the 2015 net income target but net income for 2016 is ninety percent (90%) or more of the 2016 net income target, then Holdco shall issue to the Ability Shareholders, in addition to the pro rata of the Holdco shares relating to the 2016 net income target, such number of Holdco shares for 2015 based on the same percentage of net income for 2016 as compared to the 2016 net income target.

Under the Merger Agreement, each of the Ability shareholders shall have the right, on one occasion during the 90 day period following the second anniversary of the closing of the merger, to put to Holdco all or part of his pro rata portion of 1,173,267 ordinary shares of Holdco he receives in the share exchange for an amount in cash equal to (1) (x) the number of shares being put multiplied by (y) $10.10 per share plus (2) his pro rata portion of interest, if any, and subject to the pre-ruling granted by the Israel Tax Authority, as generated in the put option escrow account as described below. $11,850,000 shall be deposited into an escrow account, referred to as the put option escrow account, by Holdco at closing of the merger to fund the payment of the purchase price for the put if it is exercised.

Ability will declare and pay a dividend to the Ability shareholders of $11 million prior to the closing of the merger, which dividend shall be paid from the retained earnings of Ability.

Upon the consummation of the transactions described herein, assuming approval of our stockholders at a special meeting to be called for such purpose, Holdco will be the new public entity and will change its name to a name to be determined by the parties prior to closing.

The consummation of the transactions is subject to the receipt of required approval by our stockholders, as well as the fulfillment of certain other customary conditions. There can be no assurance that the transaction will be consummated.

17

Critical Accounting Policy

Common Stock Subject to Possible Conversion

The Company accounts for its common stock subject to possible conversion in accordance with the guidance provided in ASC 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory conversion (if any) is classified as a liability instrument and is measured at fair value. Conditionally convertible common stock (including common stock that features conversion rights that are either within the control of the holder or subject to conversion upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain conversion rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly at September 30, 2015 and December 31, 2014, the common stock subject to possible conversion is presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

Status as Emerging Growth Company

We are an emerging growth company as defined in the JOBS Act. As an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.

Results of Operations

We have not generated any revenues to date. Our entire activity from inception up to the closing of our Offering on December 23, 2013 was in preparation for that event. Subsequent to the Offering, our activity has been limited to the evaluation of Business Combination candidates, and we will not be generating any operating revenues until the closing and completion of our initial Business Combination. We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (treasury securities). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after this period.

We incurred net losses of $444,974 and $223,224 for the three months ended September 30, 2015 and 2014, respectively, and net losses of $1,012,497 and $678,459 for the nine months ended September 30, 2015 and 2014, respectively. Costs incurred during the reporting periods consisted primarily of legal and professional fees associated with compliance with our reporting obligations as a public company, our efforts to locate a suitable target Business Combination candidate, and performing due diligence on such candidates. During the three months ended September 30, 2015 and 2014, we also incurred $30,000 and $30,000, respectively, and $90,000 and $90,000 for the nine months ended September 30 2015 and 2014, respectively, of office expenses payable to Cambridge Capital LLC, a related party. Until we consummate a Business Combination, we will not have revenues.

Liquidity and Capital Resources

The net proceeds from our IPO and Private Placement, after deducting underwriting discounts of $2,616,250 and offering expenses of $507,525, were $82,097,475. Of this amount, $81,305,000 was placed in the trust account. The remaining $792,475 of net proceeds not in trust have been, and will continue to be, used for working capital purposes.

We intend to use the net proceeds of our initial public offering and Private Placement, including the funds held in the trust account, to acquire a target business and to pay our expenses relating thereto, including $2,415,000, representing 3.0% of the gross proceeds of the offering, to engage the underwriter to advise and assist the Company in reviewing potential targets with which the Company may consummate a Business Combination, as well as structuring the terms of the Business Combination and negotiating the terms of the letter of intent and/or definitive agreement relating to such Business Combination only upon completion of our initial Business Combination. To the extent that our capital stock is used in whole or in part as consideration to effect a Business Combination, the remaining proceeds held in the trust account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees, which we had incurred prior to the completion of our Business Combination if the funds available to us outside of the trust account were insufficient to cover such expenses.

18

Generally, the proceeds held in the trust account will not be released to us until the earlier of our completion of an initial Business Combination and our redemption of 100% of the outstanding public shares upon our failure to consummate a Business Combination prior to December 23, 2015. Notwithstanding the foregoing, there can be released to us from the trust account (1) any interest earned on the funds in the trust account that we need to pay our income or other tax obligations and (2) any remaining interest earned on the funds in the trust account that we need for our working capital requirements.

As of September 30, 2015, we had $47,947 in our operating bank accounts and $81,310,750 in restricted investments and cash equivalents held in trust to be used for an initial Business Combination or to repurchase or convert our common shares. As of September 30, 2015, $5,750 of the amount on deposit in the trust account represents interest income, which was available to be withdrawn by us as described above. Through November 11, 2015, we have withdrawn $40,108 from the interest income on the trust account to fund our working capital and tax obligations.

Until consummation of our initial Business Combination, we will be using the funds not held in the trust account, plus the interest earned on the trust account balance (net of income, and other tax obligations) that may be released to us to fund our working capital requirements, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

We will need to raise additional capital through loans or additional investments from our shareholders, officers, directors, or third parties. None of our shareholders, officers or directors are under any obligation to advance funds to, or to invest in, the Company. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern.

In order to finance transaction costs in connection with an intended initial Business Combination, our sponsors, officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we consummate our initial Business Combination, we would repay such loaned amounts. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. Such loans may be convertible into shares of common stock of the post Business Combination entity or additional Private Units at a price of $10.00 per share or Private Unit at the option of the lender. We believe the $10.00 purchase price of these shares will approximate the fair value of such shares when issued. However, if it is determined, at the time of issuance, that the fair value of such shares exceeds the $10.00 purchase price, we would record compensation expense for the excess of the fair value of the shares on the day of issuance over the $10.00 purchase price in accordance with ASC 718 — Compensation — Stock Compensation.

Commencing on December 17, 2013 and ending upon the consummation of a Business Combination or our liquidation, we began incurring a fee payable to Cambridge Capital LLC of $10,000 per month for providing us with office space and certain general and administrative services. During the three and nine months ended September 30, 2015, the Company has accrued $30,000 and $90,000 to the aforementioned affiliate, which is reflected in the Statement of Operations as Office Expense - Related Party.

We have engaged a law firm to assist us with our legal matters in identifying, negotiating, and consummating a Business Combination as well as assisting with other legal matters. In connection with the engagement, we have agreed to pay the law firm $3,000 per month plus additional legal fees not to exceed $100,000 per calendar year. Of this amount, $148,000 is included in accrued expenses as of September 30, 2015. We will also pay the law firm an additional cash fee contingent upon the consummation of a Business Combination. If a Business Combination does not occur, we will not be required to pay this fee. As of September 30, 2015, we estimate the amount of this fee to be approximately $700,000. There can be no assurance that we will complete the merger with Ability or any other Business Combination.

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Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2015.

Contractual Obligations

	Payments due by period
	Total		Less than 1 year		1+ Years
Fee payable to Cambridge Capital LLC for office space and general and administrative services	$	30,000	$	30,000	$	-
TOTAL	$	30,000	$	30,000	$	-

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The proceeds in our trust account will be invested in United States government treasury bills, bonds or notes having a maturity of 180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

For the fiscal quarter ended September 30, 2015, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

Other than as described below, there is no material litigation, arbitration, governmental proceeding or any other legal proceeding currently pending or known to be contemplated against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding in the 10 years preceding the date of this quarterly report.

On March 24, 2015, the Company, the members of the Company’s board of directors and Parakou were named as defendants in a putative class action and derivative lawsuit captioned Brian Levy v. Cambridge Capital Acquisition Corp., et al., No. 2015 CA 003339. The complaint was filed in the Circuit Court of the 15th Judicial Circuit of Palm Beach County, Florida (the “Action”) by a person identifying himself as a stockholder of Cambridge.

The complaint generally alleged, among other things, that the members of the Cambridge board of directors breached their fiduciary duties to Cambridge stockholders by approving the Mergers. The complaint also alleged that there were various conflicts of interest in the transaction and that such conflicts of interest were not adequately disclosed to stockholders in the definitive proxy statement/prospectus that the Company filed with the SEC on March 27, 2015 (the “Proxy Statement/Prospectus”). The Action sought injunctive relief, damages and reimbursement of costs, among other remedies.

On April 9, 2015, the plaintiff in the Action filed a motion for a preliminary injunction seeking to enjoin temporarily the closing of the Mergers. On April 15, 2015, the circuit judge set a hearing date of April 17, 2015 for an emergency hearing on the motion for preliminary injunction.

The Company, under the advice of legal counsel, believed that the Action was without merit and that no further disclosure was required to supplement the Proxy Statement/Prospectus under applicable laws. However, to eliminate certain burdens, expenses and uncertainties, on April 16, 2015, defendants in the Action entered into a Memorandum of Understanding regarding the settlement of claims asserted in the Action and on April 17, 2015, the plaintiff in the Action filed a notice of withdrawal of its emergency motion for preliminary injunction and unopposed motion to cancel the hearing. Shortly thereafter the Company terminated the Mergers with Parakou and the plaintiff took no further action.

On October 15, 2015, the plaintiff filed an amended complaint against Cambridge, Holdco, the members of Cambridge’s board of directors and Ability.

The amended complaint generally alleges, among other things, that the members of the Cambridge board of directors breached their fiduciary duties to Cambridge stockholders by approving the contemplated merger with Ability and that Ability is aiding and abetting the Cambridge board of directors in the alleged breaches of their fiduciary duties. The complaint also alleges that Cambridge was obligated to liquidate on June 23, 2015 and redeem the outstanding public shares from the funds held in the trust fund and that the efforts to violate Cambridge’s amended and restated certificate of incorporation are ultra vires and therefore void acts. The complaint further alleges that Cambridge’s directors have various conflicts of interest in the transaction and that such conflicts of interest are not adequately disclosed to stockholders in the definitive proxy statement/prospectus that the Company filed with the SEC on September 17, 2015 (the “Proxy Statement/Prospectus”). The Action seeks injunctive relief, damages and reimbursement of fees and costs, among other remedies.

The Company believes that it is reasonably possible that the Action could result in a material loss. However, the Company is not able to estimate the amount. At September 30, 2015, no amounts have been accrued on the Company’s condensed consolidated financial statements in connection with this Action.

Item 1A.  Risk Factors

Risk factors that affect our business and financial results are discussed under the heading “Risk Factors” in our annual report. Those risk factors are incorporated herein by reference. There have been no material changes to the disclosures relating to this item from those set forth in the annual report.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In October 2013, we issued 2,012,500 shares of common stock to our sponsors for $25,000 in cash, at a purchase price of approximately $0.01 share, in connection with our organization, as follows:

Name	Number of Shares		Relationship to Us
Gordon Family 2007 Trust		1,610,000	Affiliate of Chief Executive Officer
Cambridge Capital LLC		402,500	Affiliate of Chief Executive Officer

 In November 2013, Cambridge Capital LLC and the Gordon Family 2007 Trust transferred an aggregate of 445,000 insider shares to the individuals and entities as set forth below at the same purchase price originally paid for such shares by Cambridge Capital LLC and the Gordon Family 2007 Trust:

Name	Number of Shares		Relationship to Us
Mitchell Gordon		60,000	President, Chief Financial Officer and Director
Michael Durham		40,000	Director
Nathan Gantcher		60,000	Director
Scott Laurans		60,000	Director
Sidney Brown		10,000	Special Advisor
David Brodsky		25,000	Special Advisor
Herb Shear		25,000	Special Advisor
Bob Hammel		50,000	Special Advisor
Jonathan Morris		5,000	Stockholder and Trustee of the Gordon Family 2007 Trust
Elliott Brodsky		10,000	Stockholder
Alex Sagan		10,000	Stockholder
Ramon Suazo		15,000	Stockholder
Raymond Avon Ventures, LLC		25,000	Stockholder
Jonathan Meeks		50,000	Stockholder

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In order to meet our working capital requirements, our sponsors, officers and directors, special advisors and their respective affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial Business Combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our Business Combination into additional private units at a price of $10.00 per unit. Our stockholders have approved the issuance of the units and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial Business Combination. If we do not complete a Business Combination, the loans will not be repaid.

The holders of our issued and outstanding insider shares, as well as the holders of the private units (and underlying securities) and any securities our sponsors, officers, directors, special advisors or their respective affiliates may be issued in payment of working capital loans made to us, are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the private units or securities issued in payment of working capital loans made to us can elect to exercise these registration rights at any time after we consummate a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of our initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

On October 2, 2013, the Company issued a $100,000 principal amount unsecured promissory note to Cambridge Capital LLC (“Affiliate”), an affiliate of the Company’s Chief Executive Officer. The note was non-interest bearing and was payable on the earlier to occur of (i) October 2, 2014, (ii) the consummation of the Offering or (iii) the date on which the Company determined not to proceed with the Offering. Due to the short-term nature of the note, the fair value of the note approximates the carrying amount. This note was repaid in full on December 24, 2013.

On December 17, 2013, Affiliate advanced the Company an aggregate of $70,000 for the payment of offering costs. This amount was repaid in full on December 24, 2013.

Cambridge Capital LLC has agreed that, commencing on December 17, 2013 through the earlier of our consummation of our initial Business Combination or our liquidation, it will make available to us certain general and administrative services, including office space, utilities and administrative support, as we may require from time to time. We have agreed to pay Cambridge Capital LLC $10,000 per month for these services. Mr. Gordon is the majority holder of Cambridge Capital LLC. Accordingly, Mr. Gordon will benefit from the transaction to the extent of his interest in Cambridge Capital LLC. However, this arrangement is solely for our benefit and is not intended to provide Mr. Gordon compensation in lieu of a salary. We believe, based on rents and fees for similar services in West Palm Beach, Florida, that the fee charged by Cambridge Capital LLC is at least as favorable as we could have obtained from an unaffiliated person.

Other than the fees described above, no compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of our sponsors, officers, directors, special advisors or their respective affiliates, for services rendered to us prior to, or in connection with the consummation of our initial Business Combination (regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and Business Combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust account, such expenses would not be reimbursed by us unless we consummate an initial Business Combination.

After our initial Business Combination, members of our management team who remain with us may be paid consulting, board, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider our initial Business Combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC.

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All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our uninterested independent directors, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

Use of Proceeds

On October 23, 2013, we filed a registration statement on Form S-1 (File No. 333-191868) for our initial public offering, which was declared effective on December 17, 2013. On December 23 and 30, 2013, we closed our initial public offering of 7,000,000 and 1,050,000 units, respectively at an offering price of $10.00 per share, generating aggregate, total gross proceeds of $80,500,000. EarlyBirdCapital, Inc. acted as the representative of the underwriters for the initial public offering. Simultaneously with the offering, on December 23 and 30, 2013, we consummated the private placement of 427,500 and 44,625 sponsors’ units, respectively, at $10.00 per share, generating total proceeds of $4,721,250.

We paid a total of $2,616,250 in underwriting discounts and $507,525 for other costs and expenses related to the offering. After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds to us from the offering were $82,097,475 (which includes the $4,721,250 we received from the private placement), of which $81,305,000 was deposited into the trust account. The remaining proceeds of $792,475 became available to be used as working capital to provide for business, legal and accounting due diligence on prospective Business Combinations and continuing general and administrative expenses. Additionally, we incur $10,000 per month to Cambridge Capital LLC for general and administrative services. As of September 30, 2015, we had accrued $139,199 due to Cambridge Capital LLC representing the unpaid portion of the administrative fee and unpaid reimbursable expenses.

Generally, the proceeds held in the trust account will not be released to us until the earlier of our completion of an initial Business Combination or our redemption of 100% of the outstanding public shares upon our failure to consummate a Business Combination within the required time period. Notwithstanding the foregoing, there can be released to us from the trust account (1) any interest earned on the funds in the trust account that we need to pay our income or other tax obligations and (2) any remaining interest earned on the funds in the trust account that we need for our working capital requirements.

Through November 11, 2015, we have withdrawn $40,108 from the interest income earned on the trust account for our working capital and tax obligations.

On March 6, 2015, June 8, 2015, August 3, 2015 and August 26, 2015 the Company issued Notes to Benjamin Gordon, our Chief Executive Officer, to evidence loans of $70,000, $100,000, $100,000 and $80,000, respectively, made by Mr. Gordon to us, to be either repaid or converted to sponsors’ Units upon a Business Combination.

Subject to the foregoing, our management has broad discretion with respect to the specific application of the proceeds in our trust account, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination with one or more businesses or entities. To the extent that our capital stock is used in whole or in part as consideration to effect a Business Combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business.

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Item 6. Exhibits.

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 13, 2015	CAMBRIDGE CAPITAL ACQUISITION CORPORATION
	By:	/s/ Benjamin Gordon
	Name:	Benjamin Gordon
	Title:	Chief Executive Officer and Director

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