Delaware |
6770 |
46-5723951 |
||||||||
(State
or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
David Alan Miller, Esq. Jeffrey M. Gallant, Esq. Graubard Miller The Chrysler Building 405 Lexington Avenue New York, New York 10174 (212) 818-8800 (212) 818-8881 Facsimile |
Douglas S. Ellenoff, Esq. Stuart Neuhauser, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, NY 10105 (212) 370-1300 (212) 370-7889 Facsimile |
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Large
accelerated filer o |
Accelerated filer o |
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Non-accelerated filer þ (Do not check if a smaller reporting company) |
Smaller reporting company o |
Title of each Class of Security being registered |
Proposed Maximum Aggregate Offering Price(1) |
Amount of Registration Fee |
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---|---|---|---|---|---|---|---|---|---|---|
Units, each
consisting of one share of common stock, par value $0.0001, and one Right entitling the holder to receive one-tenth (1/10) of a share of common
stock(2) |
$ | 115,000,000 | $ | 14,812 | ||||||
Common Stock
included as part of the Units(2) |
| | ||||||||
Rights included
as part of the Units(2) |
| | ||||||||
Common Stock
underlying Rights included as part of the Units |
| | ||||||||
Total
|
$ | 115,000,000 | $ | 14,812 | (3 ) |
(1) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). |
(2) |
Includes Units and shares of Common Stock and Rights underlying such Units which may be issued on exercise of a 45-day option granted to the Underwriters to cover over-allotments, if any. |
(3) |
The filing fee has previously been paid. |
PRELIMINARY
PROSPECTUS |
SUBJECT TO COMPLETION, SEPTEMBER 8, 2014 |
Public Offering Price |
Underwriting Discount and Commissions(1) |
Proceeds, Before Expenses, to Us |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Per unit
|
$ | 10.00 | $ | 0.55 | $ | 9.45 | ||||||||
Total
|
$ | 100,000,000 | $ | 5,500,000 | $ | 94,500,000 |
(1) |
Includes up to $0.30 per unit, or up to $3,000,000, as a deferred underwriting fee to be placed in the trust account described below. These funds will be released only on completion of our initial business combination, as described in this prospectus. Please see the section titled Underwriting for further information relating to the underwriting arrangements agreed to between us and the underwriters in this offering. |
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F-1 |
|
we, us or our company refers to Harmony Merger Corp.; |
|
initial stockholders refer to all of our stockholders immediately prior to the date of this prospectus, including all of our officers and directors to the extent they hold such shares; |
|
insider shares refer to the 2,875,000 shares of common stock held by our initial stockholders prior to this offering (including up to an aggregate of 375,000 shares subject to forfeiture to the extent that the underwriters over-allotment option is not exercised in full or in part); |
|
management team or our management refer to our officers and directors; |
|
private units refer to the units we are selling privately to our initial stockholders upon consummation of this offering and references to private shares and private rights refers to the shares of common stock and rights included within the private units; |
|
the term public stockholders means the holders of the shares of common stock which are being sold as part of the units in this public offering (whether they are purchased in the public offering or in the aftermarket), including any of our initial stockholders to the extent that they purchase such shares; and |
|
the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. |
Securities
offered |
10,000,000 units, at $10.00 per unit, each unit consisting of one share of common stock and one right, each right entitling the holder to
automatically receive one-tenth (1/10) of a share of common stock upon consummation of our initial business combination. |
|||||
This
is different from other offerings similar to ours whose units include one share and one warrant. Our management believes that investors in similarly
structured blank check offerings, and those likely to invest in this offering, have come to expect the units of such companies to include one share and
another security which would allow the holders to acquire additional shares. Without the ability to acquire such additional shares, our management
believes that the investors would not be willing to purchase units in such companies initial public offerings. In this offering, by offering
rights as part of the units that automatically entitle the holder to receive only one-tenth of a share, as opposed to warrants included in units of
similarly structured blank check offerings that most often entitle the holder to receive a full share, our management believes we have significantly
(although not entirely) reduced the number of shares that we would be obligated to issue after the offering. However, no additional consideration
will be required to be paid to us by holders of the rights to receive the additional shares upon consummation of our business combination unlike
the case when the units include warrants (which would require the payment of additional consideration to us in order to receive the shares
underlying such warrants). Our management believes our unit structure (with rights instead of warrants) will make us a more attractive
merger partner for target businesses as our capitalization structure will be simpler without the warrants present. However, our management may be
incorrect in this belief and our unit structure may cause our units to be worth less than if they included a warrant. |
||||||
Listing of our
securities and proposed symbols |
We
anticipate the units, and the common stock and rights once they begin separate trading, will be listed on Nasdaq under the symbols
HRMNU, HRMN and HRMNR, respectively. |
|||||
We
have agreed with Cantor Fitzgerald & Co. that each of the shares of common stock and rights may trade separately ten business days following the
earlier to occur of the expiration of the underwriters over-allotment |
option, its exercise in full or the announcement by the |
||||||
underwriters of their intention not to exercise all or any remaining portion of the over-allotment option. In no event will Cantor Fitzgerald
& Co. allow separate trading of the common stock and rights until we file an audited balance sheet reflecting our receipt of the gross proceeds of
this offering. |
||||||
Once
the common stock and rights commence separate trading, holders will have the option to continue to hold units or separate their units into the
component pieces. Holders will need to have their brokers contact our transfer agent in order to separate the units into separately trading common
stock and rights. |
||||||
We
will file a Current Report on Form 8-K with the SEC, including an audited balance sheet, promptly after the consummation of this offering, which is
anticipated to take place three business days from the date the units commence trading. The audited balance sheet will reflect our receipt of the
proceeds from the exercise of the over-allotment option if the over-allotment option is exercised on the date of this prospectus. If the over-allotment
option is exercised after the date of this prospectus, we will file an amendment to the Form 8-K or a new Form 8-K to provide updated financial
information to reflect the exercise of the over-allotment option. We will also include in the Form 8-K, or amendment thereto, or in a subsequent Form
8-K, information relating to the separate trading of the common stock and rights. |
||||||
Common
Stock: |
||||||
Number
outstanding before this offering |
2,875,000 shares1 |
|||||
Number to be
outstanding after this offering and sale of private units |
12,875,000 shares2 |
|||||
Rights: |
||||||
Number
outstanding before this offering |
0
rights |
|||||
Number to be
outstanding after this offering and sale of private units |
10,375,000 rights |
|||||
Terms of the
Rights |
Each
holder of a right will automatically receive one-tenth (1/10) of a share upon consummation of our initial business combination. If we are unable to
complete an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights will
not receive any of such funds for their rights and the rights will expire worthless. |
1 |
This number includes an aggregate of up to 375,000 shares of common stock held by our initial stockholders that are subject to forfeiture if the over-allotment option is not exercised by the underwriters in full. |
2 |
Assumes the over-allotment option has not been exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders have been forfeited. |
Offering
proceeds to be held in trust |
$96,250,000 of the net proceeds of this offering (or $110,875,000 if the over-allotment option is exercised in full), plus the $3,750,000 (or
$4,125,000 if the over-allotment option is exercised in full) we will receive from the sale of the private units, for an aggregate of $100,000,000 (or
an aggregate of $115,000,000 if the over-allotment option is exercised in full), or $10.00 per unit sold to the public in this offering will be placed
in a trust account at UBS Financial Services Inc. in the United States, maintained by Continental Stock Transfer & Trust Company, acting as trustee
pursuant to an agreement to be signed on the date of this prospectus. The remaining $750,000 of net proceeds of this offering will not be held in the
trust account. |
|||||
Except as set forth below, the proceeds in the trust account will not be released until the earlier of the completion of an initial business
combination within the required time period or our entry into liquidation if we have not completed a business combination in the required time period.
Therefore, unless and until an initial business combination is consummated, the proceeds held in the trust account will not be available for our use
for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the
negotiation of an agreement to acquire a target business. |
||||||
Notwithstanding the foregoing, there can be released to us from the trust account (i) any interest earned on the funds in the trust account
that we need to pay our income or other tax obligations and (ii) any remaining interest earned on the funds in the trust account that we need for our
working capital requirements. With these exceptions, expenses incurred by us may be paid prior to a business combination only from the net proceeds of
this offering not held in the trust account (estimated to initially be $750,000); provided, however, that in order to meet our working capital needs
following the consummation of this offering if the funds not held in the trust account and interest earned on the funds held in the trust account
available to us are insufficient, our initial stockholders, officers and directors or their 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 lenders 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
(which, for example, would result in the holders being issued 55,000 |
shares of common stock if $500,000 of notes were so converted since the 50,000 rights included in the private units would result in the
issuance of 5,000 shares of common stock upon the closing of our business combination). Our initial 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 would not be repaid. |
||||||
Limited
payments to insiders |
Prior
to the consummation of a business combination, there will be no fees, reimbursements or other cash payments paid to our initial stockholders, officers,
directors or their affiliates prior to, or for any services they render in order to effectuate, the consummation of a business combination (regardless
of the type of transaction that it is) other than: |
|||||
repayment at the closing of this offering of a $50,000 non-interest loan made by Eric S. Rosenfeld, our chairman and chief
executive officer; |
||||||
payment of $12,500 per month to Crescendo Advisors II, LLC, an entity controlled by Mr. Rosenfeld, for office space and
related services; and |
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reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as
identifying and investigating possible business targets and business combinations. |
||||||
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 available to us, such expenses
would not be reimbursed by us unless we consummate an initial business combination. Our audit committee will review and approve all reimbursements and
payments made to any initial stockholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments
made to members of our audit committee will be reviewed and approved by our Board of Directors, with any interested director abstaining from such
review and approval. |
||||||
Stockholder
approval of initial business combination |
In
connection with any proposed initial business combination, we will seek stockholder approval of such initial business combination at a meeting called
for such purpose at which stockholders may seek to have their shares converted, regardless of whether they vote for or against the proposed business
combination, for a pro rata share of the aggregate amount then on deposit in the trust |
account less any taxes then due but not yet paid (such conversion amount initially anticipated to be $10.00 per share). However, the
conversion price could be reduced by claims of creditors or if we increase the size of this offering, each as described in more detail in this
prospectus. |
||||||
We
will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of
the outstanding shares of common stock voted are voted in favor of the business combination. We have determined not to consummate any business
combination unless we have net tangible assets of at least $5,000,001 upon such consummation in order to avoid being subject to Rule 419 promulgated
under the Securities Act. |
||||||
Our
initial stockholders have agreed (i) to vote their insider shares, private shares and any public shares purchased in or after this offering in favor of
any proposed business combination and (ii) not to convert any shares (including the insider shares) in connection with a stockholder vote to approve a
proposed initial business combination. As a result, we would need only 3,562,501 of the 10,000,000 public shares sold in this offering to be
voted in favor of a transaction in order to have such transaction approved (assuming the over-allotment option is not exercised). None of
our officers, directors, initial stockholders or their affiliates has indicated any intention to purchase units in this offering or any units or shares
of common stock in the open market or in private transactions. However, if a significant number of stockholders vote, or indicate an intention to vote,
against a proposed business combination, our officers, directors, initial stockholders or their affiliates could make such purchases in the open market
or in private transactions in order to influence the vote. There is no limit on the amount of shares that may be purchased by the initial stockholders.
Any purchases would be made in compliance with federal securities laws, including the fact that all material information will be made public prior to
such purchase, and no purchases would be made if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules
designed to stop potential manipulation of a companys stock. |
||||||
Conversion
rights |
In
connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will have the right,
regardless of whether he is voting for or against such proposed business combination, to have his shares converted into a pro rata share of the trust
account upon consummation of the business combination. However, we will consummate our initial business combination only if we have
net |
tangible assets of at least $5,000,001 upon such consummation. As a result, we will not be able to consummate an initial
business combination if the value of the shares being sought to be converted reduces our net tangible value below $5,000,001.
Additionally, in connection with any proposed business combination, a target business could impose a working capital closing condition or
require us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination. As
a result, this may limit the number of shares that we can have converted and still consummate such business combination. |
||||||
Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or any other person with whom he is acting in concert
or as a group (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or
more of the shares of common stock sold in this offering. Accordingly, all shares purchased by a holder in excess of 20% of the shares sold in this
offering will not be converted for cash. We believe this restriction will prevent an individual stockholder or group from accumulating
large blocks of shares before the vote held to approve a proposed business combination and attempt to use the redemption right as a means to force us
or our management to purchase its shares at a significant premium to the then current market price. By restricting a stockholders ability to
convert more than 20% of the shares of common stock sold in this offering, we believe we have limited the ability of a small group of stockholders to
unreasonably attempt to block a transaction which is favored by our other public stockholders. |
||||||
We
may also require public stockholders, whether they are a record holder or hold their shares in street name, to either tender their
certificates to our transfer agent at any time through the vote on the business combination or to deliver their shares to the transfer agent
electronically using Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option, in order to have
their shares converted. The requirement for physical or electronic delivery prior to the meeting ensures that a holders election to
convert his shares is irrevocable once the business combination is approved. There is a nominal cost associated with this tendering process
and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45
and it would be up to the broker whether or not to pass this cost on to the converting holder. |
If
the business combination is not consummated for any reason, public stockholders will not be entitled to have their shares converted. Public
stockholders who convert their shares will continue to have the right to receive shares upon automatic conversion of the rights they may hold if the
business combination is consummated. |
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Liquidation if
no business combination |
If we
are unable to complete our initial business combination within 24 months from the consummation of this offering, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the
outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining holders of common stock and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii)
above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. |
|||||
In
connection with our redemption of 100% of our outstanding public shares for a portion of the funds held in the trust account, each holder will receive
a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not
previously released to us for our working capital requirements or necessary to pay our taxes payable on such funds (subject in each case to our
obligations under Delaware law to provide for claims of creditors). Holders of rights will receive no proceeds in connection with the
liquidation with respect to such rights, which will expire worthless. |
||||||
We
may not have funds sufficient to pay or provide for all creditors claims. Although we will seek to have all third parties (including any vendors
or other entities we engage after this offering) and any prospective target businesses enter into valid and enforceable agreements with us 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. There is also no guarantee that the third parties would not challenge the enforceability of these waivers and bring claims against the
trust account for monies owed them. |
||||||
The
holders of the insider shares and private units will not participate in any redemption distribution with respect to their insider shares, private
shares or private rights. |
||||||
If we
are unable to conclude our initial business combination and we expend all of the net proceeds of |
this
offering not deposited in the trust account, without taking into account any interest earned on the trust account, we expect that the initial per-share
redemption price will be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to claims of our creditors
that are in preference to the claims of our stockholders. In addition, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in
our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. Furthermore, the anticipated
redemption price could be reduced if we increase the size of this offering as described in more detail in this prospectus. Therefore, the
actual per-share redemption price may be less than $10.00. |
||||||
We
will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, Eric S.
Rosenfeld, our Chairman and Chief Executive Officer, has agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no
more than approximately $15,000) and has agreed not to seek repayment for such expenses. |
May 31, 2014 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
As Adjusted(1) |
||||||||||
Balance
Sheet Data: |
|||||||||||
Working
capital |
$ | 2,007 | $ | 97,774,507 | (2) | ||||||
Total assets
|
97,485 | 100,774,507 | (3) | ||||||||
Total
liabilities |
72,978 | 3,000,000 | (4) | ||||||||
Value of
common stock subject to possible conversion |
0 | 91,999,990 | (5) | ||||||||
Stockholders equity |
24,507 | 5,774,517 |
May 31, 2014 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
As Adjusted |
||||||||||
Income
Statement Data: |
|||||||||||
Revenue
|
$ | 0 | $ | 0 | |||||||
Net loss
|
(493 | ) | (493 | ) | |||||||
Basic and
diluted net loss per share |
(0.00 | ) | (0.00 | ) |
(1) |
Includes the proceeds to be received from this offering as the offering is being made on a firm commitment basis and therefore the underwriters are obligated to purchase the units on the date of this prospectus. Also includes the $3,750,000 we will receive from the sale of the private units. |
(2) |
The as adjusted working capital is derived by adding total stockholders equity and the value of the common stock subject to possible conversion less up to $3,000,000 of deferred underwriting commissions. |
(3) |
The as adjusted total assets is derived by adding total stockholders equity and the value of common stock subject to possible conversion. |
(4) |
The as adjusted liabilities represents up to $3,000,000 of deferred underwriting commissions. |
(5) |
The as adjusted value of common stock subject to possible conversion is derived by taking 9,199,999 shares of common stock which may be converted, representing the maximum number of shares that may be converted while maintaining at least $5,000,001 in net tangible assets after the offering, multiplied by a conversion price of $10.00. |
|
may significantly reduce the equity interest of investors in this offering; |
|
may subordinate the rights of holders of common stock if we issue preferred stock with rights senior to those afforded to our common stock; |
|
may cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
|
may adversely affect prevailing market prices for our shares of common stock. |
|
default and foreclosure on our assets if our profits after a business combination are insufficient to repay our debt obligations; |
|
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
|
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and |
|
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding. |
|
a limited availability of market quotations for our securities; |
|
reduced liquidity with respect to our securities; |
|
a determination that our shares of common stock are penny stock which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock; |
|
a limited amount of news and analyst coverage for our company; and |
|
a decreased ability to issue additional securities or obtain additional financing in the future. |
|
solely dependent upon the performance of a single business, or |
|
dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
|
restrictions on the nature of our investments; and |
|
restrictions on the issuance of securities. |
|
registration as an investment company; |
|
adoption of a specific form of corporate structure; and |
|
reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations. |
|
the history and prospects of companies whose principal business is the acquisition of other companies; |
|
prior offerings of those companies; |
|
our prospects for acquiring an operating business at attractive values; |
|
our capital structure; |
|
an assessment of our management and their experience in identifying operating companies; and |
|
general conditions of the securities markets at the time of the offering. |
|
rules and regulations or currency redemption or corporate withholding taxes on individuals; |
|
tariffs and trade barriers; |
|
regulations related to customs and import/export matters; |
|
longer payment cycles; |
|
inflation; |
|
economic policies and market conditions; |
|
unexpected changes in regulatory requirements; |
|
challenges in managing and staffing international operations; |
|
tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
|
currency fluctuations; |
|
challenges in collecting accounts receivable; |
|
cultural and language differences; |
|
protection of intellectual property; and |
|
employment regulations. |
|
ability to complete our initial business combination; |
|
limited operating history; |
|
success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
|
potential ability to obtain additional financing to complete a business combination; |
|
pool of prospective target businesses; |
|
the ability of our officers and directors to generate a number of potential investment opportunities; |
|
potential change in control if we acquire one or more target businesses for shares; |
|
our public securities potential liquidity and trading; |
|
regulatory or operational risks associated with acquiring a target business; |
|
use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
|
financial performance following this offering; or |
|
listing or delisting of our securities from Nasdaq or the ability to have our securities listed on Nasdaq following our initial business combination. |
Without Over-Allotment Option |
Over-Allotment Option Exercised |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Gross
proceeds |
||||||||||
From offering
|
$ | 100,000,000 | $ | 115,000,000 | ||||||
From private
placement |
3,750,000 | 4,125,000 | ||||||||
Total gross
proceeds |
103,750,000 | 119,125,000 | ||||||||
Offering
expenses(1) |
||||||||||
Underwriting
discount (2.5% of gross proceeds from offering, excluding deferred fee of up to 3.0% of gross proceeds from offering) |
2,500,000 | (2) | 2,875,000 | (2) | ||||||
Legal fees
and expenses |
250,000 | 250,000 | ||||||||
Nasdaq
listing fee |
50,000 | 50,000 | ||||||||
Printing and
engraving expenses |
45,000 | 45,000 | ||||||||
Accounting
fees and expenses |
40,000 | 40,000 | ||||||||
FINRA filing
fee |
18,000 | 18,000 | ||||||||
SEC
registration fee |
15,000 | 15,000 | ||||||||
Miscellaneous
expenses |
82,000 | 82,000 | ||||||||
Total
offering expenses |
3,000,000 | 3,375,000 | ||||||||
Net
proceeds |
||||||||||
Held in trust
|
100,000,000 | 115,000,000 | ||||||||
Not held in
trust |
750,000 | 750,000 | ||||||||
Total net
proceeds |
$ | 100,750,000 | $ | 115,750,000 | ||||||
Use of net
proceeds not held in trust and amounts available from interest income earned on the trust account(3)(4) |
||||||||||
Legal,
accounting and other third party expenses attendant to the search for target businesses and to the due diligence investigation, structuring and
negotiation of a business combination |
$ | 200,000 | (23.5%) | |||||||
Due diligence
of prospective target businesses by officers, directors and initial stockholders |
50,000 | (3.5%) | ||||||||
Legal and
accounting fees relating to SEC reporting obligations |
100,000 | (11.8%) | ||||||||
Payment of
administrative fee to Crescendo Advisors II, LLC ($12,500 per month for up to 24 months) |
300,000 | (35.3%) | ||||||||
Corporate and
franchise taxes |
100,000 | (11.8%) | ||||||||
Working
capital to cover miscellaneous expenses, D&O insurance, general corporate purposes, liquidation obligations and reserves |
100,000 | (11.8%) | ||||||||
Total
|
$ | 850,000 | (100.0%) |
(1) |
A portion of the offering expenses, including the SEC registration fee, the FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees, have been paid from the funds we received from Eric S. Rosenfeld described below. These funds will be repaid out of the proceeds of this offering available to us. |
(2) |
The underwriting discount of 2.5% is payable at the closing of the offering. Additionally, a deferred underwriting fee of up to 3.0% is payable upon consummation of our initial business combination and will be held in the trust account until consummation of such business combination. No discounts or commissions will be paid with respect to the purchase of the private units. |
(3) |
The amount of proceeds not held in trust will remain constant at $750,000 even if the over-allotment is exercised. In addition, interest income earned on the amounts held in the trust account (after payment of taxes owed on such interest income) will be available to us to pay for our working capital requirements. We estimate the interest earned on the trust account will be approximately $100,000 over a 24-month period assuming an interest rate of approximately 0.05% per year. |
(4) |
These are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of that business combination. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would be deducted from our excess working capital. |
Public
offering price |
$ | 9.09 | ||||||||
Net tangible
book value before this offering |
$ | 0.00 | ||||||||
Increase
attributable to new investors and private sales |
1.22 | |||||||||
Pro forma net
tangible book value after this offering |
1.22 | |||||||||
Dilution to
new investors |
$ | 7.87 | ||||||||
Percentage of
dilution to new investors |
86.5 | % |
Shares Purchased |
Total Consideration |
Average Price per Share |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number |
Percentage |
Amount |
Percentage |
||||||||||||||||||||
Initial
stockholders |
2,912,500 | (1) | 20.9 | % | $ | 3,775,000 | 3.6 | % | $ | 1.30 | |||||||||||||
New investors
|
11,000,000 | (2) | 79.1 | % | 100,000,000 | 96.4 | % | $ | 9.09 | ||||||||||||||
13,912,500 | 100.0 | % | $ | 103,775,000 | 100.0 | % |
(1) |
Assumes the over-allotment option has not been exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders have been forfeited as a result thereof. Includes 375,000 private shares issued simultaneously with the consummation of this offering. Assumes the issuance of an additional 37,500 shares underlying the private rights. |
(2) |
Assumes the issuance of an additional 1,000,000 public shares underlying the public rights. |
Numerator: |
||||||
Net tangible
book value before the offering |
$ | 24,507 | ||||
Net proceeds
from this offering and private placement of private units |
100,750,000 | |||||
Less:
Deferred underwriters commission |
(3,000,000 | ) | ||||
Less:
Proceeds held in trust subject to possible conversion |
(91,999,990 | ) | ||||
$ | 5,774,517 | |||||
Denominator: |
||||||
Shares of
common stock outstanding prior to this offering |
2,500,000 | (1) | ||||
Shares of
common stock included in the units offered |
10,000,000 | |||||
Shares of
common stock to be sold in private placement |
375,000 | |||||
Shares of
common stock underlying the rights to be sold in this offering |
1,000,000 | |||||
Shares of
common stock underlying the rights to be sold in private placement |
37,500 | |||||
Less: Shares
subject to possible conversion |
(9,199,999 | ) | ||||
4,712,501 |
(1) |
Assumes the over-allotment option has not been exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders have been forfeited as a result thereof. |
May 31, 2014 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
As Adjusted(1) |
||||||||||
Note payable
to related party(2) |
$ | 50,000 | $ | | |||||||
Deferred
underwriting commissions |
| 3,000,000 | |||||||||
Shares of
common stock, par value $0.0001 per share, -0- and 9,199,999 shares which are subject to possible conversion |
| 91,999,990 | (4) | ||||||||
Stockholders equity: |
|||||||||||
Shares of
preferred stock, par value $0.0001 per share, 1,000,000 shares authorized; none issued or outstanding |
| | |||||||||
Shares of
common stock, par value $0.0001 per share, 16,000,000 shares authorized; 2,875,000 shares issued and outstanding, actual; 3,675,001 shares issued and
outstanding(3) (excluding 9,199,999 shares subject to possible conversion), as adjusted |
288 | 368 | |||||||||
Additional
paid-in capital |
24,712 | 5,774,642 | |||||||||
Deficit
accumulated during the development stage |
(493 | ) | (493 | ) | |||||||
Total
stockholders equity: |
$ | 24,507 | $ | 5,774,517 | |||||||
Total
capitalization |
$ | 74,507 | $ | 100,774,507 | (5) |
(1) |
Includes the proceeds to be received from this offering as the offering is being made on a firm commitment basis and therefore the underwriters are obligated to purchase the units on the date of this prospectus. Also includes the $3,750,000 we will receive from the sale of the private units. |
(2) |
Note payable to related party is a promissory note issued in the aggregate amount of $50,000 to Eric S. Rosenfeld. The note is non-interest bearing and is payable on the earliest to occur of (i) May 31, 2015, (ii) the consummation of this offering or (iii) the date on which we determine not to proceed with this offering. |
(3) |
Assumes the over-allotment option has not been exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders have been forfeited as a result thereof. Assumes shares underlying the rights to be sold in this offering as issued and outstanding. |
(4) |
Derived by taking 9,199,999 shares of common stock which may be converted, representing the maximum number of shares that may be converted while maintaining at least $5,000,001 in net tangible assets after the offering, multiplied by a conversion price of approximately $10.00. |
(5) |
Derived by adding total stockholders equity and the value of the common stock subject to possible conversion. |
|
may significantly reduce the equity interest of our stockholders; |
|
may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock; |
|
will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and |
|
may adversely affect prevailing market prices for our securities. |
|
default and foreclosure on our assets if our operating revenues after a business combination are insufficient to pay our debt obligations; |
|
acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant; |
|
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and |
|
our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding. |
|
$200,000 of expenses for the search for target businesses and for the legal, accounting and other third-party expenses attendant to the due diligence investigations, structuring and negotiating of a business combination; |
|
$50,000 of expenses for the due diligence and investigation of a target business by our officers, directors and initial stockholders; |
|
$100,000 of expenses in legal and accounting fees relating to our SEC reporting obligations; |
|
$300,000 for the payment of the administrative fee to Crescendo Advisors II, LLC (of $12,500 per month for up to 24 months); |
|
$100,000 for corporate and franchise taxes; and |
|
$100,000 for general working capital that will be used for miscellaneous expenses, liquidation obligations and reserves, including director and officer liability insurance premiums. |
|
staffing for financial, accounting and external reporting areas, including segregation of duties; |
|
reconciliation of accounts; |
|
proper recording of expenses and liabilities in the period to which they relate; |
|
evidence of internal review and approval of accounting transactions; |
|
documentation of processes, assumptions and conclusions underlying significant estimates; and |
|
documentation of accounting policies and procedures. |
million in 2013. In the merger, Rhapsody issued approximately 24.1 million shares of its common stock to Primoriss stockholders and provided for an additional 5.0 million contingent shares issuable if certain earnings targets were achieved for 2008 and 2009. All of such contingent shares were issued as Primoris was successful in achieving its earnings targets. The warrants issued in Rhapsodys initial public offering expired by their terms in October 2010. Primoriss common stock currently trades on the Nasdaq Capital Market under the symbol PRIM and its price has ranged from $3.25 to $33.35 following the completion of its business combination with Rhapsody, with a closing price of $____ on ________, 2014. Eric S. Rosenfeld served as a director of Primoris from the completion of its business combination in 2008 until May 2014. David D. Sgro served as a director of Primoris from 2008 to 2011.
|
financial condition and results of operation; |
|
growth potential; |
|
brand recognition and potential; |
|
return on equity or invested capital; |
|
market capitalization or enterprise value; |
|
experience and skill of management and availability of additional personnel; |
|
capital requirements; |
|
competitive position; |
|
barriers to entry; |
|
stage of development of its products, processes or services; |
|
existing distribution and potential for expansion; |
|
degree of current or potential market acceptance of the products, processes or services; |
|
proprietary aspects of products and the extent of intellectual property or other protection for its products, processes, formulas or services; |
|
impact of regulation on the business; |
|
regulatory environment of the industry; |
|
costs associated with effecting the business combination; |
|
industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates; and |
|
macro competitive dynamics in the industry within which the company competes. |
|
subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and |
|
result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services. |
|
prior to the consummation of our initial business combination, we shall seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares of common stock, regardless of whether they vote for or against the proposed business combination, into a portion of the aggregate amount then on deposit in the trust account, subject to the limitations described herein; |
|
we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination; |
|
if our initial business combination is not consummated within 24 months of the consummation of this offering, then our existence will terminate and we will distribute all amounts in the trust account and any net assets remaining outside the trust account to all of our public holders of shares of common stock; |
|
we may not consummate any other business combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination; and |
|
prior to our initial business combination, we may not issue (i) any shares of common stock or any securities convertible into common stock, or (ii) any securities that participate in any manner in the proceeds of the trust account, or that vote as a class with the common stock sold in this offering on our initial business combination. |
|
our obligation to seek stockholder approval of a business combination may delay the completion of a transaction; |
|
our obligation to convert shares of common stock held by our public stockholders (but not our initial stockholders) may reduce the resources available to us for a business combination; |
|
Nasdaq may require us to file a new listing application and meet its initial listing requirements to maintain the listing of our securities following a business combination; |
|
our outstanding rights, and the potential future dilution they represent; |
|
our obligation to pay a deferred underwriting fee of up to 3% of the proceeds of this offering; |
|
our obligation to either repay or issue private units upon conversion of up to $500,000 of working capital loans that may be made to us by our initial stockholders, officers, directors or their affiliates; |
|
our obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any securities issued to our initial stockholders, officers, directors or their affiliates upon conversion of working capital loans; and |
|
the impact on the target business assets as a result of unknown liabilities under the securities laws or otherwise depending on developments involving us prior to the consummation of a business combination. |
Terms of the Offering |
Terms Under a Rule 419 Offering |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Escrow of
offering proceeds |
$100,000,000 of the net offering proceeds and proceeds from the sale of the private units will be deposited into an account at UBS Financial
Services Inc. in the United States, maintained by Continental Stock Transfer & Trust Company, acting as trustee |
$87,750,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or
in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the
account. |
||||||||
Investment
of net proceeds |
The
$100,000,000 of the net offering proceeds and proceeds from the sale of the private units held in trust will only be invested in United States
government treasury bills, bonds or notes with 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 United States government treasuries. |
Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940
or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. |
||||||||
Limitation
on fair value or net assets of target business |
The
initial target business that we acquire must have a fair market value equal to at least 80% of the balance in our trust account at the time of the
execution of a definitive agreement for our initial business combination. |
We
would be restricted from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the
maximum offering proceeds. |
||||||||
Trading of
securities issued |
The
units may commence trading on or promptly after the date of this prospectus. The shares of common stock and rights comprising the units will begin to
trade separately ten business days following the earlier to occur of the expiration of the underwriters over-allotment option, its exercise in
full or the announcement by the underwriters of its intention not to exercise all or any remaining portion of the over-allotment option, provided we
have filed with the SEC a Current Report on Form 8-K, which includes an audited balance sheet reflecting our receipt of the proceeds of this
offering. |
No
trading of the units or the underlying securities would be permitted until the completion of a business combination. During this period, the securities
would be held in the escrow or trust account. |
Terms of the Offering |
Terms Under a Rule 419 Offering | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Election to
remain an investor |
We
will give our stockholders the opportunity to vote on the business combination. We will send each stockholder a proxy statement containing information
required by the SEC. Under Delaware law and our bylaws, we must provide at least 10 days advance notice of any meeting of stockholders.
Accordingly, this is the minimum amount of time we would need to provide holders to determine whether to exercise their rights to convert their
shares into cash or to remain an investor in our company. |
A
prospectus containing information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the
company, in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective
amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment. If the company has
not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow
account would automatically be returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all of the deposited
funds in the escrow account must be returned to all investors and none of the securities will be issued. |
||||||||
Business
combination deadline |
Pursuant to our amended and restated certificate of incorporation, if we do not complete an initial business combination within 24 months from
the consummation of this offering, it will trigger our automatic winding up, dissolution and liquidation. |
If an
acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow
account would be returned to investors. |
||||||||
Interest
earned on the funds in the trust account |
There
can be released to us, from time to time, (i) any interest earned on the funds in the trust account that we may need to pay our tax obligations and
(ii) any remaining interest earned on the funds in the trust account that we need for our working capital requirements. The remaining interest earned
on the funds in the trust account will not be released until the earlier of the completion of a business combination and our entry into liquidation
upon failure to effect a business combination within the allotted time. |
All
interest earned on the funds in the trust account will be held in trust for the benefit of public stockholders until the earlier of the completion of a
business combination and our liquidation upon failure to effect a business combination within the allotted time. |
Terms of the Offering |
Terms Under a Rule 419 Offering | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Release of
funds |
Except for (i) interest earned on the funds held in the trust account that may be released to us to pay our income or other tax
obligations and (ii) any remaining interest that we may need for our working capital requirements that may be released to us from the interest
earned on the trust account balance described above, the proceeds held in the trust account will not be released until the earlier of the completion of
a business combination and the liquidation of our trust account upon failure to effect a business combination within the allotted
time. |
The
proceeds held in the escrow account would not be released until the earlier of the completion of a business combination or the failure to effect a
business combination within the allotted time. |
Name |
Age |
Position |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Eric S.
Rosenfeld |
57 | Chairman of the Board and Chief Executive Officer |
||||||||
David D. Sgro
|
38 | Chief Operating Officer and Director |
||||||||
Thomas
Kobylarz |
37 | Chief Financial Officer |
||||||||
John P.
Schauerman |
57 | Director |
||||||||
Adam J. Semler
|
50 | Director |
||||||||
Leonard B.
Schlemm |
61 | Director |
|
reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K; |
|
discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
|
discussing with management major risk assessment and risk management policies; |
|
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
|
reviewing and approving all related-party transactions; |
|
inquiring and discussing with management our compliance with applicable laws and regulations; |
|
pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; |
|
appointing or replacing the independent auditor; |
|
determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
|
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and |
|
approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
|
should have demonstrated notable or significant achievements in business, education or public service; |
|
should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and |
|
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders. |
|
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officers compensation, evaluating our Chief Executive Officers performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officers based on such evaluation; |
|
reviewing and approving the compensation of all of our other executive officers; |
|
reviewing our executive compensation policies and plans; |
|
implementing and administering our incentive compensation equity-based remuneration plans; |
|
assisting management in complying with our proxy statement and annual report disclosure requirements; |
|
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
|
if required, producing a report on executive compensation to be included in our annual proxy statement; and |
|
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
|
None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities. |
|
In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. Our management has pre-existing fiduciary duties and contractual obligations and may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
|
Our officers and directors are now, and may in the future become, affiliated with entities, including other blank check companies, engaged in business activities identical to those intended to be conducted by our company. |
|
The insider shares owned by our officers and directors will be released from escrow only if a business combination is successfully completed and subject to certain other limitations. Additionally, our officers and directors will not receive distributions from the trust account with respect to any of their insider shares if we do not complete a business combination. Furthermore, the initial stockholders have agreed that the private units (and underlying securities) will not be sold or transferred by them until after we have completed our initial business combination. In addition, our officers and directors may loan funds to us after this offering and may be owed reimbursement for expenses incurred in connection with certain activities on our behalf which would only be repaid if we complete an initial business combination. For the foregoing reasons, the personal and financial interests of our directors and executive officers may influence their motivation in identifying and selecting a target business, completing a business combination in a timely manner and securing the release of their shares. |
|
the corporation could financially undertake the opportunity; |
|
the opportunity is within the corporations line of business; and |
|
it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Name of Affiliated Company |
Name of Individual(s) |
Priority/Preference relative to Harmony Merger Corp. |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
CPI
Aerostructures, Inc. |
Eric S. Rosenfeld |
Mr.
Rosenfeld will be required to present all business opportunities which are suitable for CPI Aerostructures to CPI Aerostructures prior to presenting
them to us. CPI Aerostructures is engaged in the contract production of structural aircraft parts principally for the United States Air Force and other
branches of the U.S. armed forces. |
||||||||
Absolute
Software |
Eric S. Rosenfeld |
Mr.
Rosenfeld will be required to present all business opportunities which are suitable for Absolute Software to Absolute Software provides persistent
endpoint security and management for computers, laptops, tablets and smartphone devices. |
||||||||
COM DEV
International |
David D. Sgro |
Mr.
Sgro will be required to present all business opportunities which are suitable for COM DEV International to COM DEV International prior to presenting
them to us. COM DEV International is a global designer and manufacturer of space hardware. |
||||||||
Cott
Corporation |
Eric S. Rosenfeld |
Mr.
Rosenfeld will be required to present all business opportunities which are suitable for the Cott Corporation to the Cott Corporation prior to
presenting them to us. Cott Corporation is a private label beverage company. |
||||||||
SAExploration
Holdings Inc. |
Eric S. Rosenfeld David D. Sgro |
Each
of Messrs. Rosenfeld and Sgro will be required to present all business opportunities which are suitable for SAExploration Holdings Inc. to
SAExploration Holdings Inc. prior to presenting them to us. SAE is a holding company of various subsidiaries which collectively form a geophysical
services company offering seismic data acquisition services to the oil and gas industry in North America, South America, and Southeast
Asia. |
Name of Affiliated Company |
Name of Individual(s) |
Priority/Preference relative to Harmony Merger Corp. | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Quartet Merger
Corp. |
Eric S. Rosenfeld David D. Sgro John P. Schauerman |
Quartet Merger Corp. is a blank check company formed in April 2013 in order to effect a merger, capital stock exchange, asset acquisition or
other similar business combination with one or more businesses or entities. Quartet has entered into a definitive agreement for an initial business
combination with Pangaea and is prohibited from reviewing alternative transactions. Accordingly, at this time, Messrs. Rosenfeld, Sgro and Schauerman
have no obligation to present business opportunities to Quartet prior to presenting them to us. If the business combination between Quartet and Pangaea
is not completed for any reason, then Quartet will have until May 1, 2015 (or November 1, 2015 if certain conditions are met) to complete another
business combination. Each of Messrs. Rosenfeld, Sgro and Schauerman would then be required to present all business opportunities which are suitable
for Quartet to Quartet prior to presenting them to us. Since Quartet can acquire a target business in any industry, the business opportunities required
to be presented to Quartet will overlap with those that we would be interested in. |
||||||||
Pangaea
Logistics Solutions Ltd. |
Eric S. Rosenfeld David D. Sgro |
Assuming the business combination between Quartet and Pangaea is consummated, each of Messrs. Rosenfeld and Sgro will become directors of
Pangaea. Accordingly, each of Messrs. Rosenfeld and Sgro will be required to present all business opportunities which are suitable for Pangaea to
Pangaea prior to presenting them to us. Pangaea is a Newport, Rhode Island-headquartered growth oriented global logistics company focused on providing
seaborne drybulk transportation services. If the business combination between Quartet and Pangaea is not consummated, Messrs. Rosenfeld and Sgro will
have no obligations to present business opportunities to Pangaea. |
||||||||
The Mansfield
Clubs |
Leonard B. Schlemm |
Mr.
Schlemm will be required to present all business opportunities which are suitable for The Mansfield Clubs to The Mansfield Clubs prior to presenting
them to us. The Mansfield Clubs are three high-end fitness centers in the Montreal area. |
Name of Affiliated Company |
Name of Individual(s) |
Priority/Preference relative to Harmony Merger Corp. | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Myca Health
Inc. |
Leonard B. Schlemm |
Mr.
Schlemm will be required to present all business opportunities which are suitable for Myca Health Inc. to Myca Health Inc. prior to presenting them to
us. Myca Health Inc. is a medical software company focused on primary care practices across the United States. |
||||||||
The Atwater
Club |
Leonard B. Schlemm |
Mr.
Schlemm will be required to present all business opportunities which are suitable for The Atwater Club to The Atwater Club prior to presenting them to
us. The Atwater Club is a private racquet club in Montreal. |
|
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
|
each of our officers and directors; and |
|
all of our officers and directors as a group. |
Prior to Offering |
After Offering(2) |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and Address of Beneficial Owner(1) |
Amount and Nature of Beneficial Ownership |
Approximate Percentage of Outstanding Shares of common stock |
Amount and Nature of Beneficial Ownership(3) |
Approximate Percentage of Outstanding Shares of common stock |
|||||||||||||||
Eric S.
Rosenfeld |
2,182,000 | 76.0 | % | 1,929,001 | 14.9 | % | |||||||||||||
David D. Sgro
|
0 | 0 | % | 0 | 0 | % | |||||||||||||
Thomas
Kobylarz |
0 | 0 | % | 0 | 0 | % | |||||||||||||
John P.
Schauerman |
0 | 0 | % | 0 | 0 | % | |||||||||||||
Adam J.
Semler |
0 | 0 | % | 0 | 0 | % | |||||||||||||
Leonard B.
Schlemm |
0 | 0 | % | 0 | 0 | % | |||||||||||||
Polar
Securities Inc.(4) |
231,000 | 8.0 | % | 315,333 | 2.4 | % | |||||||||||||
DKU 2013
LLC(5) |
231,000 | 8.0 | % | 315,333 | 2.4 | % | |||||||||||||
The K2
Principal Fund L.P.(6) |
231,000 | 8.0 | % | 315,333 | 2.4 | % | |||||||||||||
All directors
and executive officers as a group (six individuals) |
2,182,000 | 76.0 | % | 1,929,001 | 14.9 | % |
* |
Less than 1%. |
(1) |
Unless otherwise indicated, the business address of each of the individuals is c/o Harmony Merger Corp., 777 Third Avenue, 37th Floor, New York, New York 10017 |
(2) |
Assumes no exercise of the over-allotment option and, therefore, the forfeiture of an aggregate of 375,000 shares of common stock held by our initial stockholders. |
(3) |
Does not include beneficial ownership of any shares of common stock issuable to holders of outstanding rights as such shares are not issuable within 60 days of the date of this prospectus. |
(4) |
The business address of Polar Securities Inc. is 401 Bay Street, Suite 1900 P.O. Box 19 ¦ Toronto, Ontario M5H 2Y4. Represents shares held by NPIC Limited, a fund for which Polar Securities, Inc. serves as investment manager. |
(5) |
The business address of DKU 2013, LLC is 405 Park Avenue, 6th Floor, New York, NY 10022. Jeff Keswin has ultimate voting and dispositive power over the shares held by DKU 2013, LLC. |
(6) |
The business address of The K2 Principal Fund L.P. is 2 Bloor Street West, Suite 801, Toronto, Ontario, Canada M4W 3E2. Shawn Kimel has ultimate voting and dispositive power over the shares held by The K2 Principal Fund L.P. as he is President of K2 Genpar 2009 Inc., the General Partner of K2 Genpar L.P., the General Partner of The K2 Principal Fund L.P. |
Name |
Number of Shares |
Relationship to Us |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Polar
Securities Inc. |
231,000 | Initial Stockholder |
||||||||
DKU
2013 LLC |
231,000 | Initial Stockholder |
||||||||
The K2
Principal Fund L.P. |
231,000 | Initial Stockholder |
|
1% of the number of shares of common stock then outstanding, which will equal 128,750 shares immediately after this offering (or 147,875 if the over-allotment option is exercised in full); and |
|
the average weekly trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
|
the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
|
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
|
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
|
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
Underwriters |
Number of Units |
|||||
---|---|---|---|---|---|---|
Cantor
Fitzgerald & Co. |
||||||
Total
|
10,000,000 |
|
receipt and acceptance of the units by the underwriters; and |
|
the underwriters right to reject orders in whole or in part. |
Per Unit |
Without Over-allotment |
With Over-allotment |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Public
offering price |
$ | 10.00 | $ | 100,000,000 | $ | 115,000,000 | ||||||||
Discount(1) |
$ | 0.55 | $ | 5,500,000 | $ | 6,325,000 | ||||||||
Proceeds
before expenses(2) |
$ | 9.45 | $ | 94,500,000 | $ | 108,675,000 |
(1) |
The underwriting discount of 2.5% is payable at the closing of the offering. Additionally, pursuant to the underwriting agreement, a deferred underwriting fee of up to 3.0% is payable upon consummation of our initial business combination and will be held in the trust account until consummation of such business combination. |
(2) |
The offering expenses are estimated at $500,000. |
|
the history and prospects of companies whose principal business is the acquisition of other companies; |
|
prior offerings of those companies; |
|
our prospects for acquiring an operating business at attractive values; |
|
our capital structure; |
|
the per share amount of net proceeds being placed into the trust account; |
|
an assessment of our management and their experience in identifying operating companies; |
|
general conditions of the securities markets at the time of the offering; and |
|
other factors as were deemed relevant. |
|
Stabilizing Transactions. The underwriters may make bids or purchases for the purpose of preventing or retarding a decline in the price of our units, as long as stabilizing bids do not exceed the offering price of $10.00 and the underwriters comply with all other applicable rules. |
|
Over-Allotments and Syndicate Coverage Transactions. The underwriters may create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus up to the amount of the over-allotment option. This is known as a covered short position. The underwriters may also create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus and the units allowed by the over-allotment option. This is known as a naked short position. If the underwriters create a short position during the offering, the representative may engage in syndicate covering transactions by purchasing our units in the open market. The representative may also elect to reduce any short position by exercising all or part of the over-allotment option. Determining what method to use in reducing the short position depends on how the units trade in the aftermarket following the offering. If the unit price drops following the offering, the short position is usually covered with shares purchased by the underwriters in the aftermarket. However, the underwriters may cover a short position by exercising the over-allotment option even if the unit price drops following the offering. If the unit price rises after the offering, then the over-allotment option is used to cover the short position. If the short position is more than the over-allotment option, the naked short must be covered by purchases in the aftermarket, which could be at prices above the offering price. |
|
Penalty Bids. The representative may reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
F-2 |
||||||
F-3 |
||||||
F-4 |
||||||
F-5 |
||||||
F-6 |
||||||
F-7 F-12 |
ASSETS |
||||||
Current
assets Cash and cash equivalents |
$ | 74,985 | ||||
Deferred
offering costs associated with initial public offering |
22,500 | |||||
Total
assets |
$ | 97,485 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||
Current
liabilities: |
||||||
Accounts
payable |
$ | 478 | ||||
Deferred
offering costs payable |
22,500 | |||||
Note payable
to stockholder |
50,000 | |||||
Total
current liabilities |
72,978 | |||||
Commitments |
||||||
Stockholders equity |
||||||
Preferred
stock, $.0001 par value |
| |||||
Authorized
1,000,000 shares; none issued |
| |||||
Common stock,
$.0001 par value |
| |||||
Authorized
16,000,000 shares, 2,875,000 shares issued and outstanding(1) |
288 | |||||
Additional
paid-in capital |
24,712 | |||||
Accumulated
deficit |
(493 | ) | ||||
Total
stockholders equity |
24,507 | |||||
Total
liabilities and stockholders equity |
$ | 97,485 |
(1) |
Includes an aggregate of 375,000 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Formation and
operational costs |
$ | 493 | ||||
Net
loss |
$ | (493 | ) | |||
Weighted
average shares outstanding(1) |
2,500,000 | |||||
Basic and
diluted net loss per share |
$ | (0.00 | ) |
(1) |
Excludes an aggregate of 375,000 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Common Stock |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares(1) |
Amount |
Additional Paid-In Capital |
Accumulated deficit |
Shareholders Equity |
||||||||||||||||||
Common shares
issued to initial stockholders |
2,875,000 | $ | 288 | $ | 24,712 | $ | | $ | 25,000 | |||||||||||||
Net Loss
|
| | | (493 | ) | (493 | ) | |||||||||||||||
Balance at
May 31, 2014 |
2,875,000 | $ | 288 | $ | 24,712 | $ | (493 | ) | $ | 24,507 |
(1) |
Includes an aggregate of 375,000 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Cash flow
from operating activities |
||||||
Net loss
|
$ | (493 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating activities: |
||||||
Change in
operating assets and liabilities: |
||||||
Increase in
accounts payable |
478 | |||||
Net cash
used in operating activities |
(15 | ) | ||||
Cash flows
from financing activities |
||||||
Proceeds from
sale of shares of common stock to initial stockholders |
25,000 | |||||
Proceeds from
note payable, stockholder |
50,000 | |||||
Net cash
provided by financing activities |
75,000 | |||||
Net
increase in cash and cash equivalents |
74,985 | |||||
Cash and cash
equivalents at beginning of period |
| |||||
Cash and
cash equivalents at end of period |
$ | 74,985 | ||||
Non-cash
Financial Activities |
||||||
Accrual of
deferred offering costs |
$ | 22,500 |
Initial
Trustees fee |
$ | 1,000 | (1) | |||
SEC
Registration Fee |
15,000 | |||||
FINRA filing
fee |
18,000 | |||||
Accounting
fees and expenses |
40,000 | |||||
Nasdaq listing
fees |
50,000 | |||||
Printing and
engraving expenses |
45,000 | |||||
Directors
& Officers liability insurance premiums |
75,000 | (2) | ||||
Legal fees and
expenses |
250,000 | |||||
Miscellaneous
|
81,000 | (3) | ||||
Total
|
$ | 575,000 |
(1) |
In addition to the initial acceptance fee that is charged by Continental Stock Transfer & Trust Company, as trustee, the registrant will be required to pay to Continental Stock Transfer & Trust Company $16,100 for acting as trustee, as transfer agent of the registrants shares of common stock, as right agent for the registrants rights and as escrow agent. |
(2) |
This amount represents the approximate amount of director and officer liability insurance premiums the registrant anticipates paying following the consummation of its initial public offering and until it consummates a business combination. |
(3) |
This amount represents additional expenses that may be incurred by the Company in connection with the offering over and above those specifically listed above, including distribution and mailing costs. |
Exhibit No. |
Description |
|||||
---|---|---|---|---|---|---|
1.1 | Form
of Underwriting Agreement.* |
|||||
3.1 | Certificate of incorporation. ** |
|||||
3.2 | Amended and Restated Certificate of incorporation.* |
|||||
3.3 | Bylaws. ** |
|||||
4.1 | Specimen Unit Certificate.* |
|||||
4.2 | Specimen Common Share Certificate.* |
|||||
4.3 | Specimen Right Certificate.* |
|||||
4.4 | Form
of Rights Agreement between Continental Stock Transfer & Trust Company and the Registrant.* |
|||||
5.1 | Opinion of Graubard Miller.* |
|||||
10.1 | Form
of Letter Agreement among the Registrant, Cantor Fitzgerald & Co. and the Companys officers, directors and stockholders.* |
|||||
10.2 | Form
of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.* |
|||||
10.3 | Form
of Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders.* |
|||||
10.4 | Form
of Promissory Note issued to Eric S. Rosenfeld. ** |
|||||
10.5 | Form
of Registration Rights Agreement among the Registrant and the Initial Stockholders.* |
|||||
10.6 | Form
of Subscription Agreements among the Registrant, Graubard Miller and the Initial Stockholders.* |
|||||
14 | Form
of Code of Ethics.* |
|||||
23.1 | Consent of Marcum LLP. |
|||||
23.2 | Consent of Graubard Miller (included in Exhibit 5.1).* |
|||||
24 | Power
of Attorney (included on signature page of this Registration Statement). |
|||||
99.1 | Form
of Audit Committee Charter.* |
Exhibit No. |
Description | |||||
---|---|---|---|---|---|---|
99.2 | Form
of Nominating Committee Charter.* |
|||||
99.3 | Form
of Compensation Committee Charter.* |
* |
To be filed by amendment. |
** |
Previously filed. |
(a) |
The undersigned registrant hereby undertakes: |
HARMONY MERGER CORP. |
||||||||||
By: |
/s/ Eric S. Rosenfeld |
|||||||||
Name: |
Eric
S. Rosenfeld |
|||||||||
Title: |
Chief
Executive Officer |
Name |
Position |
Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ Eric
S. Rosenfeld Eric S. Rosenfeld |
Chairman of the Board and Chief Executive Officer (Principal executive officer) |
September 8, 2014 |
||||||||
/s/ Thomas
Kobylarz Thomas Kobylarz |
Chief
Financial Officer (Principal financial and accounting officer) |
September 8, 2014 |
||||||||
/s/ David
D. Sgro David D. Sgro |
Chief
Operating Officer and Director |
September 8, 2014 |
||||||||
/s/ John
P. Schauerman John P. Schauerman |
Director |
September 8, 2014 |
||||||||
/s/ Adam
J. Semler Adam J. Semler |
Director |
September 8, 2014 |
||||||||
/s/
Leonard B. Schlemm Leonard B. Schlemm |
Director |
September 8, 2014 |
Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of Harmony Merger Corp. (the “Company”) on Amendment No. 1 to Form S-1, File No. 333-197330, of our report dated July 9, 2014, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audit of the financial statements of Harmony Merger Corp. as of May 31, 2014 and for the period from May 21, 2014 (inception) through May 31, 2014, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
New York ,NY
September 8, 2014