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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
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Delaware
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90-0632274 |
(State or other jurisdiction incorporation or organization) | (I.R.S. Employer Identification No.) |
Radnor Financial Center
150 North Radnor-Chester Road, Suite F-200 Radnor, Pennsylvania |
19087 |
(Address of principal executive office) | (Zip Code) |
_____________________________________________________________ |
No.
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Document Description
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1.1
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Underwriting Agreement, dated May 9, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and EarlyBirdCapital, Inc. as representative of the several underwriters named therein*
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1.2
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Merger and Investment Banking Agreement, dated May 9, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and EarlyBirdCapital, Inc.*
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3.1
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Restated Certificate of Incorporation*
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3.2
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Amended and Restated Bylaws*
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4.1
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Warrant Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Continental Stock Transfer & Trust Company*
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10.1
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Investment Management Trust Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Continental Stock Transfer and Trust Company*
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10.2
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Stock Purchase Agreement, dated May 13, 2011, by and among Universal Business Payment Solutions Acquisition Corporation, Bipin C. Shah and Peter Davidson*
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10.3
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Letter Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and UBPS Services, LLC*
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10.4
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Anna Hassold*
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10.5
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Arthur Ryan*
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10.6
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Bipin Shah*
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10.7
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Dipak Shah*
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10.8
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Douglas Anderson*
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10.9
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Douglas Rainey*
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10.10
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Eric Van Der Vlugt*
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10.11
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Fred Adams*
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10.12
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Frederick Hammer*
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10.13
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Ira Lubert*
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10.14
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and John Piasecki*
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10.15
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Jon Lubert*
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10.16
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Peter Davidson*
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10.17
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Richard Braddock*
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10.18
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Robert Palmer*
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10.19
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Roland Bullard*
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10.20
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Thomas McHugh*
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10.21
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Valerie Phillips*
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10.22
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Warrant Subscription Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and William Dougherty*
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10.23
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Warrant Subscription Agreement, dated May 13, 2011, by and among Universal Business Payment Solutions Acquisition Corporation, EarlyBirdCapital, Inc., Rodman and Renshaw, LLC, Cohen and Company Capital Markets, LLC, Maxim Group LLC and I-Bankers Securities, Inc.*
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10.24
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Charles Worthman*
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10.25
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Rodman and Renshaw, LLC*
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10.26
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Mike Powell*
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10.27
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and David Nussbaum*
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10.28
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Kevin Mangan*
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10.29
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Eric Lord*
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10.30
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Steven Levine*
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10.31
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Edward Kovary*
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10.32
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Amy Kaufmann*
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10.33
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Ramnarain Jaigobind*
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10.34
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Cohen and Company Capital Markets, LLC*
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10.35
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and I-Bankers Securities, Inc.*
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10.36
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and EarlyBirdCapital Inc.*
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10.37
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Maxim Group LLC*
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10.38
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Amy Kaufmann*
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10.39
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Unit Purchase Option, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Eileen Moore*
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10.40
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Insider Letter Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and Bipin Shah*
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10.41
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Insider Letter Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and the securityholders named therein*
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10.42
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Insider Letter Agreement, dated May 13, 2011, by and between Universal Business Payment Solutions Acquisition Corporation and the securityholders named therein*
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10.43
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Stock Escrow Agreement, dated May 13, 2011, by and among Universal Business Payment Solutions Acquisition Corporation, Continental Stock Transfer & Trust Company and the securityholders named therein*
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10.44
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Registration Rights Agreement, dated May 13, 2011, by and among Universal Business Payment Solutions Acquisition Corporation and the securityholders named therein*
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31.1
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Certification of the Principal Executive, Accounting and Financial Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
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32.1
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Certification of the Principal Executive, Accounting and Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).*
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101 |
The following financial information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed with the Securities and Exchange Commission on August 15, 2011, formatted in Extensible Business Reporting language (XBRL): (i) Condensed Balance Sheet, (ii) Condensed Statement of Operations, (iii) Condensed Statement of Changes in Stockholders’ Equity, (iv) Condensed Statement of Cash Flows and (v) Notes to the Condensed Financial Statements.
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UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
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Date: September 1, 2011
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By:
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/s/ Bipin C. Shah | |
Name: Bipin C. Shah | |||
Title: Chief Executive Officer | |||
(Principal Executive, Accounting and Financial Officer) |
CONDENSED BALANCE SHEET (Parenthetical) (USD $)
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Jun. 30, 2011
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Common Stock subject to possible redemption, shares at redemption value | 11,171,999 |
Preferred stock, par value | $ 0.001 |
Preferred stock, authorized | 1,000,000 |
Preferred stock, issued | 0 |
Common Stock, par value | $ 0.001 |
Common Stock, authorized | 100,000,000 |
Common Stock, issued | 3,828,001 |
Common Stock, outstanding | 3,828,001 |
CONDENSED STATEMENTS OF OPERATIONS (USD $)
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3 Months Ended | 7 Months Ended |
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Jun. 30, 2011
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Jun. 30, 2011
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Operating costs - Related expense | $ 15,000 | $ 15,000 |
Operating costs | 23,416 | 24,953 |
Total expense | 38,416 | 39,953 |
Net loss | $ (38,416) | $ (39,953) |
Weighted average shares outstanding, basic and diluted | 3,445,847 | 3,445,847 |
Basic and diluted net loss per share | $ (0.01) | Â |
Document and Entity Information
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3 Months Ended | |
---|---|---|
Jun. 30, 2011
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Aug. 15, 2011
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Document Information [Line Items] | Â | Â |
Document Type | 10-Q | Â |
Amendment Flag | false | Â |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q3 | Â |
Trading Symbol | UBPS | Â |
Entity Registrant Name | UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION | Â |
Entity Central Index Key | 0001507986 | Â |
Current Fiscal Year End Date | --09-30 | Â |
Entity Filer Category | Non-accelerated Filer | Â |
Entity Common Stock, Shares Outstanding | Â | 14,671,000 |
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Investment in Trust Account
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
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Investment in Trust Account |
Note 5 – Investment in Trust Account
Subsequent
to the Offering, the net proceeds of the Offering totaling
$72,720,000 were deposited into an interest-bearing trust account
and invested only in United States “government
securities” (within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940) having a maturity of 180 days or
less until the earlier of either (i) the consummation of a Business
Combination or (ii) liquidation of the Company.
As
of June 30, 2011, investment securities in the Company’s
Trust Account consisted of $62,719,400 in United States Treasury
Bills and $10,000,600 in a “held as cash” account. The
Company classifies its United States Treasury and equivalent
securities as held-to-maturity in accordance with FASB 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 sheets and adjusted for the amortization or
accretion of premiums or discounts. The carrying amount, excluding
accrued interest income, gross unrealized holding gains and fair
value of held-to-maturity securities at June 30, 2011 are as
follows:
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Organization, Business Operations and Going Concern
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
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Organization, Business Operations and Going Concern |
Note 1—Organization, Business Operations and
Going Concern
Universal
Business Payment Solutions Acquisition Corporation (the
‘‘Company’’) was incorporated in Delaware
on November 12, 2010 as a blank check company whose objective is to
acquire, through a merger, share exchange, asset acquisition, stock
purchase, plan of arrangement, recapitalization, reorganization or
other similar business combination, one or more operating
businesses (a “Business Combination”).
The
accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States
of America (‘‘US GAAP’’) for interim
financial information and the instructions to Form
10-Q. Accordingly, they do not include all of the
information and footnotes required by US 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 months ended June
30, 2011 and for the period from November 12, 2010 (inception) to
June 30, 2011 are not necessarily indicative of the results that
may be expected for the year ending September 30, 2011 or any other
period.
On
May 13, 2011 the Company completed its initial public offering of
shares of its common stock (the “Offering”). All
activity prior to May 13, 2011 relates to the Company's formation
and intial public offering described below. The Company has
selected September 30 as its fiscal year-end.
The
Company is considered to be a development stage company and as
such, its financial statements are prepared in accordance with the
Accounting Standards Codification (‘‘ASC’’)
topic 915 ‘‘Development Stage Entities.’’
The Company is subject to all of the risks associated with
development stage companies.
The
registration statement for the Offering was declared effective on
May 9, 2011. The Company consummated the Offering on May 13, 2011
and received proceeds net of transaction costs of $69,366,894 which
is discussed in Note 3 (“Public Offering”) and
$3,480,000 from the private placement of warrants to the initial
stockholders of the Company and the underwriters of the Offering
(‘‘Insider Warrants’’) which is described
in Note 4 (“Insider Warrants”). The
Company’s management has broad discretion with respect to the
specific application of the net proceeds of the Offering and
Insider Warrants, although substantially all of the net proceeds
are intended to be generally applied toward consummating a Business
Combination. The Company’s initial Business Combination must
be with a target business whose collective fair value is at least
equal to 80% of the balance in the Trust Account (as defined
herein) at the time of the execution of a definitive agreement for
such Business Combination. Furthermore, there is no assurance that
the Company will be able to effect a Business Combination
successfully. An amount of $72,720,000 (including the $3,480,000 of
proceeds from the sale of Insider Warrants) is being held in a
trust account (‘‘Trust Account’’) for the
benefit of the Company and invested in United States treasuries
having a maturity of 180 days or less until the earlier of (i) the
consummation of the Company’s first Business Combination,
(ii) the Company’s failure to consummate a Business
Combination within the prescribed time and (iii) such time as the
Company’s common stock (the “Common Stock”)
trades at or below $5.75 per share, subject to certain criteria
discussed below. In the event that the Common Stock trades at or
below $5.75 per share, there will be released to the Company from
the Trust Account amounts necessary for the Company to purchase up
to an average of $1,900,000 worth of shares each month up to an
aggregate amount of 50% of the shares sold in the Offering (or
6,000,000 shares). Such purchases were eligible to commence on July
10, 2011 pursuant to a 10b5-1 plan entered into between the Company
and Morgan Stanley & Co. Incorporated. The 10b5-1
plan between the Company and Morgan Stanley & Co. Incorporated
was terminated by mutual agreement of the parties on August
8, 2011 and a new 10b5-1 plan was simultaneously entered into
between the Company and Ladenburg Thalmann & Co. Inc. (the
“Share Repurchase Plan”). The Share
Repurchase Plan will end on the date on which the Company announces
the execution of a definitive agreement for a Business Combination.
Purchases will be made only in open market transactions pursuant to
the Share Repurchase Plan which requires the Company to maintain a
limit order for the shares at $5.75 per share during the purchase
period. This Share Repurchase Plan will remain in place until the
maximum number of shares has been purchased under such plan or the
Share Repurchase Plan expires
by its own terms.
Pursuant
to the Share Repurchase Plan, Ladenburg will endeavor to make
purchases of common stock in accordance with the provisions of
Rule 10b-18 as promulgated under the Securities Exchange Act of
1934, as amended. However, if for any reason, the Rule 10b-18 safe
harbor is unavailable at the time of purchases, Ladenburg shall
nonetheless continue to make purchases as required by the Share
Repurchase Plan.
All shares purchased by the Company will be cancelled and resume
the status of authorized but unissued shares of the Company. The
placing of 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, prospective target businesses or
other entities it engages, execute agreements with the Company
waiving any right, title, interest or claim of any kind in or to
any monies held in the Trust Account, there is no guarantee that
they will execute such agreements.
The Company’s Chief Executive Officer has
agreed that he will be 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, there can be no assurance
that he will 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. Additionally, the interest earned on the
Trust Account balance may be released to the Company to fund
working capital requirements as well as for any amounts that are
necessary to pay the Company’s tax obligations.
The
Company, after signing a definitive agreement for the acquisition
of a target business, is required to provide stockholders who
acquired shares in the Offering (‘‘Public
Stockholders’’) with the opportunity to redeem their
shares of common stock for a pro rata interest in the Trust
Account. In the event that stockholders owning 93.1% or more of the
shares sold in the Offering exercise their redemption rights (the
“Redemption Threshold”) described below or are sold to
the Company for cancellation under the Share Repurchase Plan, the
Business Combination will not be consummated. All of the
Company’s stockholders prior to the Offering, including all
of the officers and directors of the Company (‘‘Initial
Stockholders’’), have waived any redemption rights they
may have in connection with a Business Combination.
With
respect to a Business Combination which is consummated, Public
Stockholders can demand that the Company redeem their shares of
common stock for a full pro rata interest in the Trust Account
(initially $6.06 per share). Accordingly, Public Stockholders
holding up to one share less than 93.1% of the aggregate number of
shares owned by all Public Stockholders or 11,171,999 shares may
seek redemption of their shares in the event of a Business
Combination. However, because the Company has exercised its right
to repurchase up to 50% of the shares sold in the Offering in
accordance with the Share Repurchase Plan, the Redemption Threshold
will be reduced in direct proportion to the percentage of shares
purchased by the Company. In addition, the Redemption Threshold may
be further limited by the terms and conditions of a proposed
initial Business Combination. In this event, the Company would
disclose the number of shares it purchased and the revised
Redemption Threshold in the materials distributed to its
stockholders in connection with the vote to approve a Business
Combination. Notwithstanding the foregoing, the Restated
Certificate of Incorporation of the Company provides that a Public
Stockholder, together with any affiliate or other person with whom
such Public Stockholder is acting in concert or as a
‘‘group’’ (within the meaning of Section 13
of the Securities Exchange Act of 1934, as amended), will be
restricted from seeking redemption with respect to an aggregate of
more than 10% of the shares sold in the Offering (but only with
respect to the amount over 10% of the shares sold in the Offering).
A ‘‘group’’ will be deemed to exist if
Public Stockholders (i) file a Schedule 13D or 13G indicating the
presence of a group or (ii) acknowledge to the Company that they
are acting, or intend to act, as a group.
If
the Company has not completed a Business Combination by November 9,
2012 or February 9, 2013 if a definitive agreement has been
executed by November 9, 2012 but a Business Combination has not
been consummated by February 9, 2013, the Company will liquidate
and distribute its remaining assets, including the Trust Account,
to the Public Stockholders and its corporate existence will cease
except for the purpose of winding up its affairs. In the event of a
liquidation, the Public Stockholders will be entitled to receive a
full pro rata interest in
the Trust Account (initially $6.06 per share), plus any pro rata
interest earned on the Trust Account not previously
released to the Company. The Company will pay the costs of
liquidation from remaining assets outside of the Trust Account. If
such funds are insufficient, the Company’s Chief Executive
Officer has agreed to advance the funds necessary to complete the
liquidation.
The
Company anticipates that in order to fund its working capital
requirements, the Company will need to use all of the remaining
funds not held in trust, the interest earned on the funds held in
the Trust Account, as well as entering into contingent fee
arrangements with its vendors. The Company may need to raise
additional capital through loans or additional investments from its
Initial Stockholders, officers, directors, or third parties. None
of the Initial Stockholders, officers or directors is 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
controlling 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 unaudited financial
statements do not include any adjustments that might result from
the outcome of these uncertainties.
|
Commitments
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
|
Commitments |
Note 7 —Commitments
The
Company granted the underwriters of the Offering a 45 day option to
purchase up to an additional 1,800,000 Units to cover
over-allotments, if any. The underwriters elected not to
exercise the over-allotment option and the over-allotment option
expired on June 27, 2011.
The
Company presently occupies office space provided by an affiliate of
the Company’s Chairman and Chief Executive Officer. Such
affiliates have agreed that, until the Company consummates a
Business Combination, they 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 affiliates an aggregate of $7,500 per month
for such services commencing on May 9, 2011.
Pursuant
to letter agreements executed May 13, 2011 among the Company and
the underwriters of the Offering, the Initial Stockholders have
waived their right to receive distributions with respect to their
founding shares upon the Company’s liquidation.
The
Company has engaged EBC on a non-exclusive basis to act as its
advisor and investment banker in connection with its initial
Business Combination. EBC will provide the Company with
assistance in negotiating and structuring the terms of its initial
Business Combination. The Company will pay EBC a cash fee of
$2,070,000 for such services upon the consummation of its initial
Business Combination.
|
Stockholders' Equity
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
|
Stockholders' Equity |
Note 8 —Stockholders’ Equity
Preferred Stock
The
Company is authorized to issue 1,000,000 shares of preferred stock
with a par value of $0.001 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 June 30, 2011, there are no shares of preferred stock issued or
outstanding.
Common Stock
The
Company is authorized to issue 100,000,000 shares of common stock
with a par value of $0.001 per share.
In
connection with the organization of the Company, on December 6,
2010, a total of 3,450,000 shares of the Company’s shares of
common stock were sold to the Initial Stockholders at a price of
$0.00725 per share for an aggregate of $25,000.
As
of June 30, 2011, 15,000,000 shares of common stock were issued and
outstanding, following the cancellation of 450,000 shares which
were forfeited by the Initial Stockholders upon the
underwriters’ election not to exercise their over-allotment
option. In addition, 750,000 of such shares are subject to
forfeiture in the event that the Company does not satisfy the
conditions required to redeem any outstanding Warrants as described
in Note 3.
|
Notes Payable to Stockholders
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
|
Notes Payable to Stockholders |
Note 6 —Notes Payable to Stockholders
The
Company issued a $125,000 principal amount unsecured promissory
note to UBPS Services, LLC, an entity controlled by one of the
Initial Stockholders, on December 6, 2010. The note is non-interest
bearing and is payable on the earlier of December 6, 2011 or the
consummation of the Offering. The Company repaid this Note in full
on May 19, 2011.
|
CONDENSED STATEMENT OF CHANGES IN STOCKOLDERS' EQUITY (Parenthetical) (USD $)
|
7 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2011
|
||||
Common stock issued, per share | $ 0.00725 | [1] | ||
Issuance of warrants, per warrant | $ 0.50 | |||
Sale, per Unit | $ 6.00 | |||
Sale, offering costs | $ 2,633,106 | |||
Common stock issued
|
 | |||
Issuance date | Nov. 12, 2010 | [1] | ||
issuance of warrants
|
 | |||
Issuance date | May 13, 2011 | |||
Sale of Units
|
 | |||
Issuance date | May 13, 2011 | |||
issuance of unit purchase option
|
 | |||
Issuance date | May 13, 2011 | |||
|
Significant Accounting Policies
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies |
Note 2—Significant Accounting Policies
Cash and cash equivalents
The
Company considers all short-term investments with a maturity of
three months or less when purchased to be cash equivalents. The
Company maintains cash balances that at times 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 cash 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 or to
repurchase shares in accordance with the Share Repurchase
Plan.
Loss per share
Loss
per share is computed by dividing net loss by the weighted-average
number of shares of common stock outstanding during the period.
11,171,999
shares of common stock subject to possible redemption at June 30,
2011, 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 earnings on the Trust Account. Loss
per share assuming dilution would give effective to dilutive
options, warrants and other potential common shares outstanding
during the period. The Company has not considered the
effect of warrants to purchase 18,960,000 shares of common stock or
the effect of the unit purchase option in the calculation of
diluted loss per share, since the exercise of the warrants and the
unit purchase are contingent upon the occurrence of future
events.
Use of estimates
The
preparation of financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets or 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.
Securities held in
Trust Account
At
June 30, 2011, investment securities consisted of United States
Treasury securities. The Company classified its 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 and adjusted for the amortization or
accretion of premiums or 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.
Fair value measurements
Fair
value is defined as an exit price, representing the amount that
would be received upon the sale of an asset or payment to transfer
a liability in an orderly transaction between market participants.
Fair value is a market-based measurement that is determined based
on assumptions that market participants would use in pricing an
asset or liability. A three-tier fair value hierarchy is used to
prioritize the inputs in measuring fair value as
follows:
Assets
and liabilities measured at fair value are based on one or more of
three valuation techniques identified in the tables below. The
valuation techniques are as follows:
Assets
Measured at Fair Value on a Recurring Basis
Common stock subject to possible redemption
The
Company accounts for its common stock subject to possible
redemption in accordance with the guidance enumerated in ASC 480
“Distinguishing Liabilities from
Equity”. Common stock subject to mandatory
redemption (if any) is classified as liability instruments and is
measured at fair value. Conditionally redeemable common stock
(including common stock that features redemption rights that are
either within the control of the holder or subject to redemption
upon the occurrence of uncertain events not solely within the
Company’s control) are classified as temporary equity. At all
other times, common stock is classified as stockholders’
equity. The Company’s common stock features certain
redemption 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 June 30, 2011, the common stock subject to possible redemption
is presented as temporary equity, outside of the
stockholders’ equity section of the Company’s balance
sheet.
Income taxes
The
Company accounts for income taxes under ASC 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 period, 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 November 12, 2010, the evaluation was
performed for the 2010 tax year which will be the only period
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 changes
to its financial position.
The
Company’s policy for recording interest and penalties
associated with audits is to record such interest and penalties as
a component of income tax expense. There were no amounts accrued
for penalties or interest as of or during the period from November
12, 2010 (inception) through June 30, 2011. Management is currently
unaware of any issues under review that could result in significant
payments, accruals or material deviations from its
position.
Recent Accounting Pronouncements
Management
does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material
effect on the accompanying financial statements.
Subsequent Events
Management
evaluates events that have occurred after the balance sheet date
but before the financial statements are issued. Based upon the
review, Management did not identify any recognized or
non-recognized subsequent events, other than those discussed in
Note 9 - Subsequent Events, that would have required adjustment or
disclosure in the financial statement (see
Note
9 - Subsequent Events).
|
Public Offering
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
|
Public Offering |
Note 3—Public Offering
On
May 13, 2011 the Company sold 12,000,000 units
(“Units”) at a price of $6.00 per unit in the Offering.
Each unit consists of one share of the Company’s common
stock, par value $0.001, and one warrant
(‘‘Warrants’’). Each Warrant entitles the
holder to purchase one share of the Company’s common stock at
a price of $6.90 commencing on the later of the Company’s
completion of a Business Combination and May 9, 2012 and expires on
the earlier of (i) five years from the completion of a Business
Combination, (ii) the liquidation of the Trust Account if the
Company has not completed a business combination within the
required time period or (iii) earlier redemption of the
Warrant. The Company may redeem the Warrants at a price
of $0.01 per Warrant upon 30 days notice while the Warrants are
exercisable, only in the event that the last sale price of the
shares of common stock is at least $9.50 per share for any 20
trading days within a 30 trading day period ending on the third day
prior to the date on which notice of redemption is given and 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 any holder that wishes to exercise his Warrant to
do so on a ‘‘cashless basis.’’ In such
event, the holder would pay the exercise price by surrendering his
Warrants for that number of shares of common stock equal to the
quotient obtained by dividing (x) the product of (i) the number of
shares of common stock underlying the Warrants, and (ii) the
difference between the exercise price of the Warrants and the
‘‘fair market value’’ (defined below) by
(y) the fair market value. The ‘‘fair market
value’’ shall mean the average
reported last sale price of the shares of common stock for the five
trading days ending on the third trading day prior to the date on
which the notice of redemption is sent to holders of
Warrants. 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.
The Company will not be obligated to deliver securities, and there
are no contractual penalties for failure to deliver securities, if
a registration statement is not effective at the time of exercise.
Additionally, 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 and in no event (whether
in the case of a registration statement not being effective or
otherwise) will the Company be required to net cash settle the
Warrant exercise. Consequently, the Warrants may expire unexercised
and unredeemed. Notwithstanding the foregoing, if the Company has
not filed with the Securities and Exchange Commission a
registration statement covering the shares issuable upon exercise
of the Warrants by the 6-month anniversary of the consummation of
its initial Business Combination, commencing on that day, Warrant
holders may, until such time as there is an effective registration
statement, exercise Warrants on a cashless basis, provided that
such cashless exercise is exempt from the registration requirements
of the Securities Act of 1933, as amended (the “Securities
Act”). The Company does not believe that such an
exemption is currently available.
The
Company entered into an agreement with EarlyBirdCapital, Inc.
(‘‘EBC’’) as representative of the several
the underwriters of the Offering (the “Underwriting
Agreement”). Pursuant to the Underwriting
Agreement, the Company paid the underwriters of the Offering an
underwriting discount of 3.0% of the gross proceeds of the Offering
($2,160,000). The Company also issued a unit purchase option, for
an aggregate amount of $100, to each underwriter and certain of its
affiliates or its designees to purchase an aggregate of 600,000
units at an exercise price of $6.60 per unit. The units issuable
upon exercise of this option are identical to the units sold in the
Offering, with the exception of containing a provision allowing for
cashless exercise by the holder of the unit purchase option. The
Company has accounted for the fair value of the unit purchase
option, inclusive of the receipt of the $100 cash payment, as an
expense of the Offering resulting in a charge directly to
stockholders’ equity. The Company estimates that the fair
value of this unit purchase option is approximately $1,053,551 (or
$1.76 per unit) using a Black-Scholes option-pricing model. The
fair value of the unit purchase option granted to the underwriters
is estimated as of the date of grant using the following
assumptions: (1) expected volatility of 35.0%, (2) risk-free
interest rate of 2.07% and (3) expected life of five years. The
unit purchase option may be exercised for cash or on a
‘‘cashless’’ basis, at the holder’s
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 option or the Warrants underlying the unit
purchase option. The holder of the unit purchase option will not be
entitled to exercise the unit purchase option or the Warrants
underlying the unit purchase option unless a registration statement
covering the securities underlying the unit purchase option is
effective or an exemption from registration is available. If the
holder is unable to exercise the unit purchase option or underlying
Warrants, the unit purchase option or Warrants, as applicable, will
expire worthless.
|
Insider Warrants
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
|
Insider Warrants |
Note 4 – Insider Warrants
Simultaneously
with the Offering, certain of the Initial Stockholders and the
underwriters of the Offering purchased 6,960,000 Insider Warrants
at $0.50 per warrant (for an aggregate purchase price of
$3,480,000) from the Company. All of the proceeds received from
these purchases were placed in the Trust Account. The Insider
Warrants are identical to the warrants underlying the Units sold in
the Offering except that: (i) the Insider Warrants were purchased
pursuant to an exemption from the registration requirements of the
Securities Act, (ii) the Insider Warrants are non-redeemable, (iii)
the Insider Warrants are exercisable on a
‘‘cashless’’ basis, in each case, if held
by the initial holders or permitted assigns and
(iv) the Insider Warrants are subject to restrictions on transfer
by the holders thereof. The transfer restriction does not
apply to transfers made pursuant to an effective registration
statement or an exemption that is occasioned by operation of law or
for estate planning purposes, while remaining in
escrow.
The
Initial Stockholders and the holders of the Insider Warrants (or
underlying shares of common stock) are entitled to registration
rights with respect to their founding shares and the Insider
Warrants (or underlying shares of common stock) pursuant to
agreements signed May 13, 2011. The holders of the majority of the
founding 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 Insider Warrants (or underlying shares of common
stock) are entitled to demand that the Company register these
securities at any time after the Company consummates a Business
Combination. Pursuant to the terms of the unit purchase
option, the holders of the unit purchase option will be entitled to
registration rights with respect to the securities. In addition,
the Initial Stockholders and holders of the Insider Warrants (or
underlying shares of common stock) have certain "piggy-back"
registration rights on registration statements filed after the
Company’s consummation of a Business
Combination.
|
CONDENSED STATEMENT OF CASH FLOWS (USD $)
|
7 Months Ended |
---|---|
Jun. 30, 2011
|
|
Operating Activities | Â |
Net loss | $ (39,953) |
Change in operating assets and liabilities | Â |
Accounts payable and accrued expenses | 14,401 |
Net cash used in operating activities | (25,552) |
Investing Activities | Â |
Investment in resticted cash and cash equivalents | (72,720,000) |
Financing Activities | Â |
Proceeds from sale of common stock to initial stockholders | 25,000 |
Proceeds from note payable to affiliate | 125,000 |
Repayment of note payable to affiliate | (125,000) |
Proceeds from public offering | 72,000,000 |
Proceeds from issuance of warrants | 3,480,000 |
Proceeds from sale of underwriter purchase option | 100 |
Payment of offering costs | (2,633,106) |
Net cash provided by financing activities | 72,871,994 |
Net increase in cash and cash equivalents | $ 126,442 |
Subsequent Events
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
|
Subsequent Events |
Note 9 —Subsequent Events
The
common stock and warrants began separate trading on August 10,
2011.
In
accordance with the Share Repurchase Plan, the Company repurchased
329,000 shares of common stock on August 10, 2011 at a
purchase price of $5.75 per share. The Company paid an
aggregate of $ 1,898,352 including $6,780 in commissions and
fees. As a result of these repurchases, the Redemption
Threshold has decreased to 90.37% and the redemption price per
share has increased to approximately $6.07. The Company
continues to purchase shares on a regular basis pursuant to the
Share Repurchase Plan.
|
CONDENSED BALANCE SHEET (USD $)
|
Jun. 30, 2011
|
---|---|
Assets | Â |
Current assets - Cash and cash equivalents | $ 126,442 |
Cash and cash equivalents held in Trust | 72,720,000 |
Total assets | 72,846,442 |
Current Liabilities | Â |
Accounts payable and accrued expenses | 14,401 |
Total current liabilities | 14,401 |
Common Stock, subject to possible redemption, 11,171,999 shares at redemption value | 67,702,314 |
Commitments and Contingencies | |
Stockholders' Equity | Â |
Preferred stock, $0.001 par value Authorized 1,000,000 shares, none issued | |
Common Stock, $0.001 par value Authorized 100,000,000 shares; issued and outstanding 3,828,001 (which excludes 11,171,999 shares subject to possible redemption) | 3,828 |
Additional paid-in capital | 5,165,852 |
Deficit accumulated during the development stage | (39,953) |
Total Stockholders' Equity | 5,129,727 |
Total Liabilities and Stockholders' Equity | $ 72,846,442 |