Attached files
| file | filename |
|---|---|
| EX-31.1 - UAN CULTURAL & CREATIVE CO., LTD. | v166689_ex31-1.htm |
| EX-32.1 - UAN CULTURAL & CREATIVE CO., LTD. | v166689_ex32-1.htm |
| EX-17.1 - UAN CULTURAL & CREATIVE CO., LTD. | v166689_ex17-1.htm |
| EX-32.2 - UAN CULTURAL & CREATIVE CO., LTD. | v166689_ex32-2.htm |
| EX-31.2 - UAN CULTURAL & CREATIVE CO., LTD. | v166689_ex31-2.htm |
| EX-10.3 - UAN CULTURAL & CREATIVE CO., LTD. | v166689_ex10-3.htm |
FORM
10-Q
U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the
quarterly period ended September 30, 2009
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the
transition period from ________ to ________
Commission
file number 000-51693
Good Harbor Partners
Acquisition Corp.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
20-3303304
|
|
(State
or other jurisdiction
|
(I.R.S.
Employer Identification Number)
|
|
of
incorporation or organization)
|
79 Byron Road, Weston, MA
02493
(Address
of principal executive offices)
(781)
237-1014
(Registrant’s
telephone number, including area code)
No
change
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.
Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).Yes ¨ No ¨
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (Check one):
Large
accelerated filer ¨ Accelerated
filer
¨
Non-accelerated filer ¨ Smaller
reporting company x.
(Do
not check if a smaller reporting company)
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes x No ¨.
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes ¨ No ¨.
APPLICABLE
ONLY TO CORPORATE ISSUERS:
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: 35,950,100 shares of common stock, par
value $.0001 per share, outstanding, which does not include 1,200,000 shares of
common stock held in treasury, as of November 16, 2009.
GOOD
HARBOR PARTNERS ACQUISITION CORP.
(a
corporation in the development stage)
-
INDEX -
|
Page
|
|||
|
PART
I – FINANCIAL INFORMATION:
|
|||
|
Item
1.
|
Condensed
Financial Statements: Condensed Balance Sheets as of September 30, 2009
(unaudited) and December 31, 2008 (audited)
|
1
|
|
|
Condensed
Statements of Operations for the Three and Nine months
ended September 30, 2009 and 2008 and for the period from
inception (August 10, 2005) to September 30, 2009
(unaudited)
|
2
|
||
|
Condensed
Statement of Stockholders’ Equity (Deficit) for the period from August 10,
2005 (Inception) to December 31, 2008 (audited) and the Nine
months ended September 30, 2009 (unaudited)
|
3
|
||
|
Condensed
Statements of Cash Flows for the Nine months ended September 30,
2009 and 2008 and for the period from inception (August 10,
2005) to September 30, 2009 (unaudited)
|
4
|
||
|
Notes
to Condensed Financial Statements (unaudited)
|
5
|
||
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
15
|
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
19
|
|
|
Item
4.
|
Controls
and Procedures
|
19
|
|
|
PART
II – OTHER INFORMATION:
|
|||
|
Item
1.
|
Legal
Proceedings
|
20
|
|
|
Item
1A.
|
Risk
Factors
|
20
|
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
20
|
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
20
|
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
20
|
|
|
Item
5.
|
Other
Information
|
21
|
|
|
Item
6.
|
Exhibits
|
21
|
|
|
Signatures
|
22
|
||
PART I – FINANCIAL
INFORMATION
Item
1. Financial Statements.
Good
Harbor Partners Acquisition Corp.
(a
corporation in development stage)
Balance
Sheets
|
As
of
|
As
of
|
|||||||
|
September
30, 2009
|
December
31, 2008
|
|||||||
|
(Unaudited)
|
(Audited)
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 2,353 | $ | 42,810 | ||||
|
Total
assets
|
$ | 2,353 | $ | 42,810 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Accrued
expenses
|
$ | 7,194 | $ | 38,680 | ||||
|
Total
current liabilities
|
7,194 | 38,680 | ||||||
|
Long
Term Promissory Notes Payable (Note 6)
|
24,000 | - | ||||||
|
Commitments (Note
5)
|
||||||||
|
Stockholders' Equity
(Notes 2, 6, 7 and 8):
|
||||||||
|
Preferred
stock, par value $.0001 per share, 5,000 shares authorized, 0 shares
issued
|
- | - | ||||||
|
Common
stock, par value $.0001 per share, 80,000,000 shares authorized, 7,150,100
shares issued and outstanding which includes 1,200,000 shares
held in treasury on September 30, 2009. At December 31, 2008 there were
5,950,100 shares issued and outstanding.
|
715 | 595 | ||||||
|
Common
stock, Class B, par value $.0001 per share, 12,000,000 shares authorized,
0 shares issued and outstanding
|
- | - | ||||||
|
Additional
paid-in-capital
|
2,020,040 | 1,990,160 | ||||||
|
Deficit
accumulated in the development stage
|
(2,019,596 | ) | (1,986,625 | ) | ||||
|
Treasury
Stock, 1,200,000 shares
|
(30,000 | ) | - | |||||
|
Total
stockholders' equity (deficit)
|
(28,841 | ) | 4,130 | |||||
|
Total
liabilities and stockholders' equity
|
$ | 2,353 | $ | 42,810 | ||||
See
Notes to Condensed Unaudited Financial Statements
1
Good
Harbor Partners Acquisition Corp.
(a
corporation in development stage)
Condensed
Statement of Operations (unaudited)
|
|
For
the three months ended
|
For
the nine months ended
|
Period
from inception
(August
10, 2005) to
|
|||||||||||||||||
|
|
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Revenue
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
|
|
||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
|
Professional
Fees
|
3,250 | 88,848 | 13,718 | 181,415 | 1,307,281 | |||||||||||||||
|
Delaware
franchise tax (Note 4)
|
- | - | 306 | 12,764 | 120,029 | |||||||||||||||
|
Other
general and administrative expenses (Note 5)
|
6,382 | 21,359 | 18,947 | 80,596 | 651,248 | |||||||||||||||
|
|
||||||||||||||||||||
|
Loss
from operations
|
(9,632 | ) | (110,207 | ) | (32,971 | ) | (274,775 | ) | (2,078,558 | ) | ||||||||||
|
|
||||||||||||||||||||
|
Interest
income
|
- | - | - | 142,378 | 3,290,326 | |||||||||||||||
|
|
||||||||||||||||||||
|
Income
(Loss) before provision for income taxes
|
(9,632 | ) | (110,207 | ) | (32,971 | ) | (132,397 | ) | 1,211,768 | |||||||||||
|
|
||||||||||||||||||||
|
Provision
for income taxes (Note 4)
|
- | - | - | - | - | |||||||||||||||
|
|
||||||||||||||||||||
|
Net
income (Loss)
|
$ | (9,632 | ) | $ | (110,207 | ) | $ | (32,971 | ) | $ | (132,397 | ) | $ | 1,211,768 | ||||||
|
|
||||||||||||||||||||
|
Accretion
relating to Class B common stock subject to conversion
|
- | - | - | - | (590,344 | ) | ||||||||||||||
|
|
||||||||||||||||||||
|
Net
income (Loss) attributable to common stockholders
|
$ | (9,632 | ) | $ | (110,207 | ) | $ | (32,971 | ) | $ | (132,397 | ) | 621,424 | |||||||
|
|
||||||||||||||||||||
|
Weighted
average Class B common shares outstanding subject to conversion,
basic and diluted
|
- | - | - | 294,325 | ||||||||||||||||
|
|
||||||||||||||||||||
|
Net
income (Loss) per Class B common share subject to conversion, basic
and diluted
|
$ | - | $ | - | $ | - | $ | - | ||||||||||||
|
|
||||||||||||||||||||
|
Weighted
average number of common shares outstanding, basic and
diluted
|
5,950,100 | 1,150,000 | 5,950,100 | 2,328,386 | ||||||||||||||||
|
|
||||||||||||||||||||
|
Net
income (Loss) per share, basic and
diluted
|
$ | (0.00 | ) | $ | (0.10 | ) | $ | (0.01 | ) | $ | (0.06 | ) | ||||||||
See
Notes to Condensed Unaudited Financial Statements
2
Good
Harbor Partners Acquisition Corp.
(a
corporation in development stage)
Statement
of Stockholders Equity (Deficit)
|
Earnings
(deficit)
|
||||||||||||||||||||||||||||||
|
Additional
|
accumulated
in
|
|||||||||||||||||||||||||||||
|
Common
Stock
|
Common
Stock, Class B
|
Paid
-In
|
Treasury
|
the
development
|
||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stock
|
stage
|
Total
|
|||||||||||||||||||||||
|
Balance,
August 10, 2005
(inception)
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
|
|
||||||||||||||||||||||||||||||
|
Issuance
of Common Stock to initial stockholder
|
100 | - | - | - | 500 |
|
- | 500 | ||||||||||||||||||||||
|
Value
of 4,950,000 Warrants at $0.05 Per Warrant
|
- | - | - | - | 247,500 |
|
- | 247,500 | ||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | (10,461 | ) | (10,461 | ) | |||||||||||||||||||||
|
Balance,
December 31,
2005
|
100 | - | - | - | 248,000 | (10,461 | ) | 237,539 | ||||||||||||||||||||||
|
Sale
of 575,000 Series A Units, 5,290,000 Series B Units through public
offering net of underwriter's discount and offering expenses and net
proceeds of $10,680,457 allocable to 2,114,942 shares of common stock,
Class B subject to possible conversion
|
1,150,000 | 115 | 10,580,000 | 1,058 | 44,250,025 |
|
- | 44,251,198 | ||||||||||||||||||||||
|
Proceeds
from sale of underwriters’ purchase option
|
- | - | - | - | 100 | - | 100 | |||||||||||||||||||||||
|
Accretion
relating to Class B common stock subject to possible
conversion
|
- | - | - | - | (264,156 | ) |
|
- | (264,156 | ) | ||||||||||||||||||||
|
Net
income
|
- | - | - | - | - | 905,501 | 905,501 | |||||||||||||||||||||||
|
Balance,
December 31,
2006
|
1,150,100 | 115 | 10,580,000 | 1,058 | 44,233,969 | 895,040 | 45,130,182 | |||||||||||||||||||||||
|
Accretion
relating to Class B common stock subject to possible
conversion
|
- | - | - | - | (326,188 | ) |
|
- | (326,188 | ) | ||||||||||||||||||||
|
Net
income for the period
|
- | - | - | - | - | 532,950 | 532,950 | |||||||||||||||||||||||
|
Net
income from inception to December 31, 2007 before reclassification of
interest earned on trust account
|
|
1,427,990 | ||||||||||||||||||||||||||||
|
Reclassification
of interest earned on trust account since inception to additional paid-in
capital
|
- | - | - | - | 3,092,819 |
|
(3,092,819 | ) | ||||||||||||||||||||||
|
Reclassification
of Class B common stock value subject to redemption to current
liability
|
- | - | - | - | (45,251,018 | ) |
|
- | (45,251,018 | ) | ||||||||||||||||||||
|
Balance,
December 31,
2007
|
1,150,100 | 115 | 10,580,000 | 1,058 | 1,749,582 | (1,664,829 | ) | 85,926 | ||||||||||||||||||||||
|
Net
loss for the period
|
- | - | - | - | - | (183,252 | ) | (183,252 | ) | |||||||||||||||||||||
|
Reclassification
of interest earned on trust account to additional paid-in capital (Note
1)
|
- | - | - | - | 138,544 | (138,544 | ) | - | ||||||||||||||||||||||
|
Reclassification
of Class B common stock value subject to redemption to current liability
(Note 1)
|
- | - | - | - | (138,544 | ) | - | (138,544 | ) | |||||||||||||||||||||
|
Sale
of common shares - Proceeds of $120,000 (Note 7)
|
2,400,000 | 240 | 119,760 | 120,000 | ||||||||||||||||||||||||||
|
Conversion
of notes to common stock - Proceeds of $120,000 (Note 7)
|
2,400,000 | 240 | 119,760 | 120,000 | ||||||||||||||||||||||||||
|
Return
and cancellation of Class B Common Stock
|
- | - | (10,580,000 | ) | (1,058 | ) | 1,058 | - | - | |||||||||||||||||||||
|
Balance,
December 31, 2008
(audited)
|
5,950,100 | $ | 595 | - | $ | - | $ | 1,990,160 | $ | (1,986,625 | ) | $ | 4,130 | |||||||||||||||||
|
Net
loss for the period
|
- | - | - | - | - | (32,971 | ) | (32,971 | ) | |||||||||||||||||||||
|
Sale
of common shares - Proceeds of $30,000 (Note 7)
|
1,200,000 | 120 | 29,880 | 30,000 | ||||||||||||||||||||||||||
|
Repurchase
of common shares - 1,200,000 shares (Note 7)
|
(30,000
|
) | (30,000 | ) | ||||||||||||||||||||||||||
|
Balance,
September 30, 2009
(Unaudited)
|
7,150,100 | $ | 715 | - | $ | - | $ | 2,020,040 | $ |
(30,000
|
) | $ | (2,019,596 | ) | $ | (28,841 | ) | |||||||||||||
See
Notes to Condensed Unaudited Financial Statements
3
Good
Harbor Partners Acquisition Corp.
(a
corporation in development stage)
Condensed
Statement of Cash Flows (unaudited)
|
For
the nine
months
ended
September
30,
2009
|
For
the nine
months
ended
September
30,
2008
|
Period
from
inception
(August
10,
2005) to
September
30,
2009
|
||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
|
Net
income (loss) for the period
|
$ | (32,971 | ) | $ | (132,397 | ) | $ | 1,211,767 | ||||
|
Adjustments
to reconcile net income to net cash used in operating
activities:
|
||||||||||||
|
Interest
earned on Trust Fund
|
- | (138,544 | ) | (3,231,364 | ) | |||||||
|
Income
related to stock repurchase
|
(2,082 | ) | - | (2,082 | ) | |||||||
|
Changes
in operating assets and liabilities:
|
||||||||||||
|
Decrease
in prepaid expenses and other
|
- | 27,900 | - | |||||||||
|
Increase
(decrease) in accrued expenses
|
(31,486 | ) | (67,862 | ) | 7,194 | |||||||
|
Net
cash used in operating activities
|
(66,539 | ) | (310,903 | ) | (2,014,485 | ) | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
|
Purchase
of Securities held in trust
|
- | - | (1,037,787,628 | ) | ||||||||
|
Maturity
of Securities held in trust
|
- | 56,660,364 | 1,041,018,992 | |||||||||
|
Net
cash provided by investing activities
|
- | 56,660,364 | 3,231,364 | |||||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
|
Proceeds
from issuance of common stock to initial stockholder
|
- | - | 500 | |||||||||
|
Proceeds
from subscription agreement deposit, common stock
|
120,000 | 120,000 | ||||||||||
|
Proceeds
from Convertible Notes
|
24,000 | 120,000 | 144,000 | |||||||||
|
Proceeds
from issuance of warrants
|
- | - | 247,500 | |||||||||
|
Proceeds
from sale of underwriters’ purchase option
|
- | - | 100 | |||||||||
|
Redemption
of Class B Common Stock
|
- | (56,660,364 | ) | (56,660,364 | ) | |||||||
|
Portion
of net proceeds from sale of Series B units through public offering
allocable to shares of common stock, Class B subject to possible
conversion to cash
|
- | - | 10,680,457 | |||||||||
|
Proceeds
from the issuance of common stock
|
30,000 | - | 30,000 | |||||||||
|
Repurchase
of Treasury Shares
|
(27,918 | ) | (27,918 | ) | ||||||||
|
Net
proceeds from sale of units though public offering allocable to
stockholders' equity
|
- | - | 44,251,199 | |||||||||
|
Net
cash provided (used in) financing activities
|
26,082 | (56,420,364 | ) | (1,214,526 | ) | |||||||
|
Net
increase (decrease) in cash and cash equivalents
|
(40,457 | ) | (70,903 | ) | 2,353 | |||||||
|
Cash
and cash equivalents
|
||||||||||||
|
Beginning
of period
|
42,810 | 189,382 | - | |||||||||
|
End
of period
|
$ | 2,353 | $ | 118,479 | $ | 2,353 | ||||||
|
Supplemental
disclosure of non-cash financing activities:
|
||||||||||||
|
Accretion relating to Class B
common stock subject
to possible conversion
|
$ | - | $ | - | $ | 590,344 | ||||||
|
Fair
value of underwriter purchase option included in offering
costs
|
$ | - | $ | - | $ | 810,000 | ||||||
See
Notes to Condensed Unaudited Financial Statements
4
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
NOTE
1—ORGANIZATION AND BUSINESS OPERATIONS
Good
Harbor Partners Acquisition Corp. (the “Company”) was incorporated in Delaware
on August 10, 2005 to serve as a vehicle to effect a merger, capital stock
exchange, asset acquisition or other similar business combination with an
operating business in the security industry (a “Target Business”). All activity
from inception (August 10, 2005) through the Company’s initial public offering
on March 15, 2006 was related to the Company's formation and capital
raising activities. Activities since the Company’s initial public offering
related to the identification and investigation of a Target
Business.
The
Company is considered to be a development stage company and as such the
financial statements presented herein are presented in accordance with FASB ASC
topic regarding Accounting and Reporting by Development State
Enterprises.
Organization
The
registration statement for the Company’s initial public offering (“Offering”)
was declared effective on March 8, 2006. The Company consummated the
Offering of 500,000 series A Units (the “Series A Units” or a “Series A Unit”)
and 4,600,000 Series B Units (the “Series B Units” or a “Series B Unit”) on
March 15, 2006. On March 20, 2006, the Company consummated the closing
of an additional 75,000 Series A Units and 690,000 Series B Units which were
subject to the over-allotment option. The Offering generated total net proceeds
of approximately $54.9 million of which $53,429,000 was placed in Trust. The
Company’s management had broad authority with respect to the application of the
proceeds of such offering although substantially all of the proceeds of such
offering were intended to be applied generally toward consummating a merger,
capital stock exchange, asset acquisition or other similar transaction with a
Target Business (a “Business Combination”). Pending such a Business Combination,
substantially all of the proceeds of any initial public offering would be held
in trust (“Trust Fund”) to be returned to the holders of Class B common stock if
a Business Combination was not contracted in 18 months (September 15,
2007), or consummated in 24 months (March 15, 2008), subsequent to the
initial public offering (the “Target Business Acquisition Period).
Both the
Company’s common stock and Class B common stock had one vote per share. However,
the Class B stockholders could, and the common stockholders could not, vote in
connection with a Business Combination. Since a Business Combination was not
consummated during the Target Business Acquisition Period, the Trust Fund was
distributed pro-rata to all of the Class B common stockholders and their Class B
common shares were cancelled and returned to the status of authorized but
unissued shares. Common stockholders did not receive any of the proceeds from
the Trust Fund.
On
November 15, 2007, the Company announced its termination of its previously
announced letters of intent for business combinations in the security industry.
As a result the Company instituted plans to distribute the amount held in the
Trust Fund to its Class B stockholders and $11,270,801 of Class B common stock
subject to conversion (including accretion of $326,188 during 2007) was
reclassified to current liabilities.
At a
Special Meeting held on January 31, 2008, the Company’s stockholders voted
to distribute the Trust Fund for the benefit of its Class B Common Stockholders
of record as of January 31, 2008 as soon as possible. The vote had the
automatic effect of immediately canceling all Class B shares and converting them
into rights to receive a pro rata share of the Trust Fund distribution.
Accordingly, the Company’s Class B Units were mandatorily separated into their
component parts: two warrants to purchase Common Stock and rights to receive the
distribution on two Class B shares. On February 7, 2008, an amount of
$56,660,364 comprised of $53,429,000 of proceeds from the Company’s initial
public offering placed in Trust and $3,231,364 of interest earned
thereon, ($5.36 per Class B share) was distributed to Class B shareholders.
Effective as of the close of business February 8, 2008, the Company’s Class B
Common Stock and Class B Units were no longer quoted on the OTC BB and were no
longer traded or be tradable.
5
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
In
addition, the Company’s remaining Common stockholders voted to remove the blank
check company restrictions from the Company’s charter, allowing the Company to
continue its corporate existence beyond its scheduled termination date of
March 15, 2008. The Company will continue to seek acquisitions. The
company’s plan is to identify a quality investment opportunity in an operating
business, not limited to the security industry, which can benefit from a reverse
merger transaction to become a publicly traded company and to subsequently
utilize the public equity markets to finance its growth strategy. During the
first nine months of 2008, the Company began the process of identifying
candidates meeting those criteria and expanded its search beyond the security
industry. The Company’s principal business objective for the next 12 months and
beyond such time will be to achieve long-term growth potential through a
combination with an operating business.
Going
concern consideration
At
September 30, 2009, the Company had $2,353 in cash and a working capital deficit
of $4,841. Further, the Company has incurred and expects to continue to
incur costs in pursuit of its acquisition plans. The Company intends to
raise additional operating funds from existing stockholders in the near future
to fund its plan to acquire a Target Businesses, which includes necessary due
diligence investigations and negotiations. These factors, among others, indicate
that the Company may be unable to continue operations as a going concern
unless further financing is consummated. There is no assurance that the
Company’s plans to raise capital or to consummate a transaction will be
successful.
Interim
financial statements
The
accompanying unaudited condensed financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
(“SEC”) and should be read in conjunction with the Company’s audited financial
statements and footnotes thereto for the year ended December 31, 2008 included
in the Company’s Form 10-K filed on March 31, 2009. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been omitted pursuant to such rules and regulations. However, the
Company believes that the disclosures are adequate to make the information
presented not misleading. The financial statements reflect all adjustments
(consisting primarily of normal recurring adjustments) that are, in the opinion
of management necessary for a fair presentation of the Company’s financial
position and results of operations. The operating results for the three and nine
months ended September 30, 2009 are not necessarily indicative of the results to
be expected for any other interim period of any future year.
NOTE
2—OFFERING
In the
Offering, effective March 8, 2006, the Company sold to the public an
aggregate of 575,000 Series A Units and 5,290,000 Series B Units at a price of
$8.50 and $10.10 per unit, respectively. Proceeds from the initial public
offering totaled approximately $54.9 million, which was net of approximately
$3.4 million in underwriting and other expenses. Each Series A Unit consists of
two shares of the Company's common stock, and ten Class Z Warrants (a “Class Z
Warrant”). Each Series B Unit consists of two shares of the Company's Class B
common stock, and two Class W Warrants (a “Class W Warrant”).
6
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
The Class
Z Warrants will expire on March 7, 2013 or earlier upon redemption. The Company
may redeem the outstanding Class W Warrants and/or Class Z Warrants with the
prior consent of HCFP/Brenner Securities LLC (“HCFP”), the representative of the
underwriters of the Offering, in whole and not in part, at a price of $.05 per
warrant at any time after the warrants become exercisable, upon a minimum of 30
days' prior written notice of redemption, and if, and only if, the last sale
price of the Company’s common stock equals or exceeds $7.50 per share and $8.75
per share, for a Class W Warrant and Class Z Warrant, respectively, for any 20
trading days within a 30 trading day period ending three business days before
the Company sent the notice of redemption.
At the
closing of this offering, the Company sold to HCFP the underwriters for an
aggregate of $100, an option (the “Underwriter's Purchase Option” or “UPO”) to
purchase up to a total of 25,000 additional Series A Units
and/or 230,000 additional Series B Units.
NOTE
3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH
EQUIVALENTS—Included in cash and cash equivalents are deposits with
financial institutions as well as short-term money market instruments with
maturities of three months or less when purchased.
CONCENTRATION OF CREDIT
RISK—Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist primarily of cash and cash
equivalents. The Company maintains deposits in federally insured financial
institutions in excess of federally insured limits. However, management believes
the Company is not exposed to significant credit risk due to the financial
position of the depository institutions in which those deposits are
held.
INVESTMENTS HELD IN TRUST—The
Company’s restricted investments held in the Trust Fund had been comprised of
Commonwealth of Virginia or Commonwealth of Maryland securities with maturities
of up to 30 days. Such securities generate current income which is exempt from
federal income tax and the income tax imposed by the Commonwealth of Virginia or
Commonwealth of Maryland and therefore no provision for income taxes has been
required for the years ended December 31, 2008 and 2007 or the period from
inception (August 10, 2005) to December 31, 2008. The Trust Fund was
liquidated on February 7, 2008.
NET INCOME PER SHARE—Net
income (loss) per share is computed based on the weighted average number of
shares of common stock and Class B common stock outstanding.
Basic
earnings (loss) per share is computed by dividing income (loss) available to
common stockholders by the weighted average common shares outstanding for the
period. Basic net income per share, subject to possible conversion, is
calculated by dividing accretion relating to Class B common stock subject
to possible conversion by the number of Class B common shares outstanding
subject to possible conversion. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity. Since
the effect of outstanding warrants to purchase common stock and the UPO are
antidilutive, they have been excluded from the Company’s computation of net
income per share.
As a
result of the Company’s distribution of the Trust Fund to the Class B Common
Stockholders as discussed in Note 1, all amounts in the Trust Fund were returned
to the Class B Common Stockholders including all interest income earned thereon
on February 7, 2008. Due to the distribution to Class B common shareholders and
the inclusion therein of $3,231,364 of interest earned on the Trust Fund the
amounts disclosed as earnings (loss) per share on the statements of operations
are not representative of the actual per share earnings (loss) of the
common stock Class B (10,580,000 shares) and common stock (1,150,100 shares)
since inception. Such amounts would be $0.31 net income per share of common
stock Class B (based on $3,231,364 interest on Trust Fund since the Offering)
and $1.68 net loss per share of common stock (based on net loss since inception
of $1,986,625 excluding interest on Trust Fund) for the 10,580,000 and 1,150,100
shares respectively.
7
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
FAIR VALUE OF FINANCIAL
INSTRUMENTS— FASB ASC Topic 820, “Fair Value measurement and
Disclosures”, an Accounting Standard Update. In September 2009, the FASB issued
this Update to amendments to Subtopic 82010, “Fair Value Measurements and
Disclosures”. Overall, for the fair value measurement of investments in certain
entities that calculates net asset value per share (or its equivalent). The
amendments in this Update permit, as a practical expedient, a reporting entity
to measure the fair value of an investment that is within the scope of the
amendments in this Update on the basis of the net asset value per share of the
investment (or its equivalent) if the net asset value of the investment (or its
equivalent) is calculated in a manner consistent with the measurement principles
of Topic 946 as of the reporting entity’s measurement date, including
measurement of all or substantially all of the underlying investments of the
investee in accordance with Topic 820. The amendments in this Update also
require disclosures by major category of investment about the attributes of
investments within the scope of the amendments in this Update, such as the
nature of any restrictions on the investor’s ability to redeem its investments
at the measurement date, any unfunded commitments (for example, a contractual
commitment by the investor to invest a specified amount of additional capital at
a future date to fund investments that will be made by the investee), and the
investment strategies of the investees. The major category of investment is
required to be determined on the basis of the nature and risks of the investment
in a manner consistent with the guidance for major security types in GAAP on
investments in debt and equity securities in paragraph 320-10-50-lB. The
disclosures are required for all investments within the scope of the amendments
in this Update regardless of whether the fair value of the investment is
measured using the practical expedient. The amendments in this Update apply to
all reporting entities that hold an investment that is required or permitted to
be measured or disclosed at fair value on a recurring or non recurring basis
and, as of the reporting entity’s measurement date, if the investment meets
certain criteria The amendments in this Update are effective for the interim and
annual periods ending after December 15, 2009. Early application is permitted in
financial statements for earlier interim and annual periods that have not been
issued.
USE OF ESTIMATES—The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
NEW ACCOUNTING
PRONOUNCEMENTS— The adoption of these accounting standards had the
following impact on the Company’s statements of income and financial
condition:
|
·
|
FASB ASC Topic 855,
“Subsequent Events”. In May 2009, the FASB issued FASB ASC Topic
855, which establish general standards of accounting and disclosure of
events that occur after the balance sheet date but before financial
statements are issued or are available to be issued. In particular, this
Statement sets forth : (i) the period after the balance sheet date during
which management of a reporting entity should evaluate events or
transactions that may occur for potential recognition or disclosure in the
financial statements, (ii) the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in
its financial statements, (iii) the disclosures that an entity should make
about events or transactions that occurred after the balance sheet
date. This FASB ASC Topic should be applied to the accounting and
disclosure of subsequent events. This FASB ASC Topic does not apply to
subsequent events or transactions that are within the scope of other
applicable accounting standards that provide different guidance on the
accounting treatment for subsequent events or transactions. This FASB ASC
Topic was effective for interim and annual periods ending after June 15,
2009, which was June 30, 2009 for the Corporation. The adoption of this
Topic did not have a material impact on the Company’s financial statements
and disclosures.
|
8
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
|
·
|
FASB ASC Topic 105, “The FASB
Accounting Standard Codification and the Hierarchy of Generally Accepted
Accounting Principles”. In June 2009, the FASB issued FASB ASC
Topic 105, which became the source of authoritative GAAP recognized by the
FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the SEC under authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. On the effective date
of this FASB ASC Topic, the Codification will supersede all then-existing
non-SEC accounting and reporting standards. All other non-SEC accounting
literature not included in the Codification will become non-authoritative.
This FASB ASC Topic identify the sources of accounting principles and the
framework for selecting the principles used in preparing the financial
statements of nongovernmental entities that are presented in conformity
with GAAP. Also, arranged these sources of GAAP in a hierarchy for users
to apply accordingly. In other words, the GAAP hierarchy will be modified
to include only two levels of GAAP: authoritative and non-authoritative.
This FASB ASC Topic is effective for financial statements issued for
interim and annual periods ending after September 15, 2009. The adoption
of this topic did not have a material impact on the Company’s disclosure
of the financial statements
|
|
·
|
FASB ASC Topic 320,
“Recognition and Presentation of Other-Than-Temporary Impairments”.
In April 2009, the FASB issued FASB ASC Topic 320 amends the
other-than-temporary impairment guidance in GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity
securities in the financial statements. This FASB ASC Topic does not amend
existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities. The FASB ASC Topic
shall be effective for interim and annual reporting periods ending after
June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. Earlier adoption for periods ending before March 15, 2009,
is not permitted. This FASB ASC Topic does not require disclosures for
earlier periods presented for comparative purposes at initial adoption. In
periods after initial adoption, this FASB ASC Topic requires comparative
disclosures only for periods ending after initial adoption. The adoption
of this Topic did not have a material impact on the Company’s financial
statements and disclosures.
|
The
Company is evaluating the impact that the following recently issued accounting
pronouncements may have on its financial statements and
disclosures.
9
FASB ASC Topic 860, “Accounting for
Transfer of Financial Asset”., In June 2009, the FASB issued additional
guidance under FASB ASC Topic 860, “Accounting for Transfer and
Servicing of Financial Assets and Extinguishment of Liabilities", which
improves the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. The Board undertook this
project to address (i) practices that have developed since the issuance of FASB
ASC Topic 860, that are not consistent with the original intent and key
requirements of that statement and (ii) concerns of financial statement users
that many of the financial assets (and related obligations) that have been
derecognized should continue to be reported in the financial statements of
transferors. This additional guidance requires that a transferor recognize and
initially measure at fair value all assets obtained (including a transferor’s
beneficial interest) and liabilities incurred as a result of a transfer of
financial assets accounted for as a sale. Enhanced disclosures are required to
provide financial statement users with greater transparency about transfers of
financial assets and a transferor’s continuing involvement with transferred
financial assets. This additional guidance must be applied as of the beginning
of each reporting entity’s first annual reporting period that begins after
November 15, 2009, for interim periods within that first annual reporting period
and for interim and annual reporting periods thereafter. Earlier application is
prohibited. This additional guidance must be applied to transfers occurring on
or after the effective date.
|
·
|
FASB ASC Topic 810, “Variables
Interest Entities”. In June 2009, the FASB issued FASB ASC Topic
810, which requires an enterprise to perform an analysis to determine
whether the enterprise’s variable interest or interests give it a
controlling financial interest in a variable interest entity. This
analysis identifies the primary beneficiary of a variable interest entity
as the enterprise that has both of the following characteristics: (i)The
power to direct the activities of a variable interest entity that most
significantly impact the entity’s economic performance and (ii)The
obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive
benefits from the entity that could potentially be significant to the
variable interest entity. Additionally, an enterprise is required to
assess whether it has an implicit financial responsibility to ensure that
a variable interest entity operates as designed when determining whether
it has the power to direct the activities of the variable interest entity
that most significantly impact the entity’s economic performance. This
FASB Topic requires ongoing reassessments of whether an enterprise is the
primary beneficiary of a variable interest entity and eliminate the
quantitative approach previously required for determining the primary
beneficiary of a variable interest entity, which was based on determining
which enterprise absorbs the majority of the entity’s expected losses,
receives a majority of the entity’s expected residual returns, or both.
This FASB ASC Topic shall be effective as of the beginning of each
reporting entity’s first annual reporting period that begins after
November 15, 2009, for interim periods within that first annual reporting
period, and for interim and annual reporting periods thereafter. Earlier
application is prohibited.
|
|
·
|
FASB ASC Topic 740,
“Income Taxes”,
an Accounting Standard Update. In September 2009, the FASB issued this
Update to address the need for additional implementation guidance on
accounting for uncertainty in income taxes. The guidance answers the
following questions: (i) Is the income tax paid by the entity attributable
to the entity or its owners? (ii) What constitutes a tax position for a
pass-through entity or a tax-exempt not-for-profit entity? (iii) How
should accounting for uncertainty in income taxes be applied when a group
of related entities comprise both taxable and nontaxable entities? In
addition, this Updated decided to eliminate the disclosures required by
paragraph 740-10-50-15(a) through (b) for nonpublic entities. The
implementation guidance will apply to financial statements of
nongovernmental entities that are presented in conformity with GAAP. The
disclosure amendments will apply only to nonpublic entities as defined in
Section 740-10-20. For entities that are currently applying the standards
for accounting for uncertainty in income taxes, the guidance and
disclosure amendments are effective for financial statements issued for
interim and annual periods ending after September 15,
2009
|
Management
does not believe that any other recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
Company’s financial statements
10
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
NOTE
4—TAXES
Income
Taxes
No
provisions for federal income taxes have been made since the Company’s interest
income is earned from investments in Commonwealth of Virginia and Commonwealth
of Maryland securities which are exempt from federal and Virginia state
taxation. Therefore the Company has cumulative tax losses of approximately $2.0
million which are not likely to be realized and consequently a full valuation
allowance has been established relating to such deferred tax
assets.
Deferred
income tax assets and liabilities are computed for differences between the
financial statement and tax bases of assets and liabilities that will result in
future taxable or deductible amounts and are based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred income tax assets to the amount expected to be realized.
Franchise
taxes incurred in the State of Delaware of $0 for both the three months ended
September 30, 2009 and 2008 and $120,029 for the period from inception
(August 10, 2005) to September 30, 2009 are included in operating
expenses.
NOTE
5—COMMITMENTS
Administrative
Services
Commencing
on March 8, 2006, the effective date of the offering, the Company was
obligated to pay an affiliate of certain security holders, $7,500 per month for
office, secretarial and administrative services. This arrangement was terminated
in November 2007. Included in the Company’s general and administrative expenses
are $0 for both the three months ended September 30, 2009 and 2008 and
$155,806 for the period from inception (August 10, 2005) to September 30,
2009.
Solicitation
Services
The
Company engaged HCFP, on a non-exclusive basis, to act as its agent for the
solicitation of the exercise of the Company’s Class W Warrants and Class Z
Warrants. In consideration for solicitation services, the Company will pay HCFP
a commission equal to 5% of the exercise price for each Class W Warrant and
Class Z Warrant exercised after March 8, 2007 if the exercise is solicited
by HCFP. No solicitation services have been provided to date.
NOTE
6 – PROMISSORY NOTES
On June
13, 2008, HCFP and Ralph S. Sheridan, our director and then-Chief Executive
Officer and Secretary, each loaned the Company $60,000. The Company issued
promissory notes (each a “Note” and together, the “Notes”) to HCFP and Mr.
Sheridan, pursuant to which the principal amounts thereunder were due and
payable on February 28, 2009 (the “Maturity Date”). The terms of the Note
provided that HCFP and Mr. Sheridan would have the option of converting the
unpaid balance of their respective Notes into shares of Common Stock at a
conversion price equal to $.05 per share, subject to adjustment upon certain
events at any time prior to the payment in full of the entire balance of the
Notes.
11
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
On
October 23, 2008, pursuant to the terms and conditions of the Notes, the Company
received conversion notices from HCFP and Mr. Sheridan. Pursuant to the Notes,
the outstanding principal amounts owed to HCFP and Mr. Sheridan were converted
into an aggregate of 2,400,000 shares of the Company’s stock at a purchase price
of $0.05 per share.
On May
12, 2009, three individuals and Ralph S. Sheridan, each loaned the Company
$6,000 (total proceeds $24,000). The Company issued promissory notes (each a
“Note” and together, the “Notes”) to the individuals and Mr. Sheridan, pursuant
to which the principal and interest amounts thereunder are due and payable on
May 12, 2017 (the “Maturity Date”). The notes bear interest of 10%
annually.
NOTE
7—CAPITAL STOCK
Preferred
Stock
The
Company is authorized to issue up to 5,000 shares of Preferred Stock with such
designations, voting, and other rights and preferences as may be determined from
time to time by the Board of Directors.
Common
Stock and Class B Common Stock
The
Company’s articles of incorporate were amended to increase the authorization to
issue shares of common stock from 40,000,000 to 80,000,000 on June 16, 2008. As
of September 30, 2009, there were 5,950,100 shares of the Company’s common
stock issued and outstanding and 1,200,000 shares of common stock held in
treasury.
As of
September 30, 2009, there were 51,059,900 shares of common
stock available for future issuance, after appropriate reserves for the
issuance of common stock in connection with the Class W Warrants and Class Z
Warrants, the Underwriters Purchase Option and the officer’s and director’s
Class W Warrants and Class Z Warrants. The Company currently has no commitments
to issue any shares of common stock.
On
October 20, 2008 the Company raised $120,000 through the sale of 2,400,000
shares of common stock at a face value of $0.05 per share and a par value of
$.0001 per share. The proceeds of this sale were received in August 2008 under a
subscription agreement. The Company intends to apply the funds raised to working
capital and general corporate purposes.
As
discussed in Note 6, in October 2008 the Company converted the outstanding
principal amounts owed to the holders under certain promissory notes into an
aggregate of 2,400,000 shares of the Company’s common stock at a purchase price
of $0.05 per share.
On June
18, 2009 the Company raised $30,000 through the sale of 1,200,000 shares of
common stock at a face value of $0.025 per share and a par value of $.0001 per
share. The Company applied these funds to the repurchase of common shares noted
below.
On June
18, 2009 the Company repurchased an aggregate of 1,200,000 shares of its common
stock, par value of $.0001 per share from HCFP Brenner Holdings, LLC for an
aggregate purchase price of $30,000. Payment of $27,918 ($30,000 net
of expenses) related to this repurchase was made in July 2009 and was recorded
as a current liability as of June 30, 2009. These shares are now held as
treasury shares at September 30, 2009.
12
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
NOTE
8 —WARRANTS AND OPTION TO PURCHASE COMMON STOCK
Warrants
In
August, 2005, the Company issued Class W Warrants to purchase 2,475,000 shares
of the Company’s common stock, and Class Z Warrants to purchase 2,475,000 shares
of the Company’s common stock, for an aggregate purchase price of $247,500, or
$0.05 per warrant.
Each
Class W Warrant is exercisable for one share of common stock. Except as set
forth below, the Class W Warrants entitle the holder to purchase shares at
$5.00, subject to adjustment in certain
circumstances through March 7, 2011. As of September 30,
2009 and 2008 there were 13,391,250 Class W Warrants outstanding.
Each
Class Z Warrant is exercisable for one share of common stock. Except as set
forth below, the Class Z Warrants entitle the holder to purchase shares at
$5.00, subject to adjustment in certain circumstances, for a period commencing
through March 7, 2013. As of September 30, 2009 and 2008, there
were 7,888,750 Class Z Warrants outstanding.
The Class
W and Class Z Warrants issued in the Offering will not be exercisable unless a
registration statement covering the securities underlying the warrants is
effective or an exemption from registration is available. Accordingly if the
warrants are not able to be exercised such warrants may expire worthless. The
Company has no obligation to net cash settle the exercise of the
warrants.
The Class
W Warrants and Class Z Warrants issued may be exercised with cash on or prior to
their respective expiration dates. However, the Class W Warrants and Class Z
Warrants issued will not be exercisable unless at the time of exercise the
Company has a current prospectus relating to the Company’s common stock issuable
upon exercise of the warrants and the common stock has been registered,
qualified or deemed to be exempt under the applicable securities laws. In
accordance with the terms of the Company’s warrant agreement, the Company has
agreed to meet these conditions and to maintain a current prospectus relating to
common stock issuable upon exercise of the Class W Warrants and Class Z Warrants
issued until the expiration of such warrants. However, there can be no assurance
that the Company will be able to do so. The holders of Class W Warrants and
Class Z Warrants do not have the rights or privileges of holders of the
Company’s common stock or any voting rights until such holders exercise their
respective warrants and receive shares of the Company’s common
stock.
The Class
W Warrants and Class Z Warrants outstanding prior to the Offering, all of which
are held by the Company’s initial security holders or their affiliates, shall
not be redeemable by the Company as long as such warrants continue to be held by
such security holders or their affiliates. Except as set forth in the preceding
sentence, the Company may redeem the Class W Warrants and/or Class Z Warrants
with the prior consent of HCFP, the representative of the underwriters in the
Offering, in whole or in part, at a price of $.05 per warrant at any time after
the warrants become exercisable, upon a minimum of 30 days’ prior written notice
of redemption, and if, and only if, the last sale price of the Company’s common
stock equals or exceeds $7.50 per share and $8.75 per share, for a Class W
Warrant and Class Z Warrant, respectively, for any 20 trading days within a 30
trading day period ending three business days before the Company sent the notice
of redemption.
13
GOOD
HARBOR PARTNERS ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(unaudited)
Underwriter
Purchase Option
In
connection with the Offering, the Company issued a UPO for an aggregate of $100
to HCFP Brenner Holdings, LLC and Legend Merchant Group, Inc. to purchase up to
25,000 Series A Units at an exercise price of $14.025 per unit and/or up to
230,000 Series B Units at an exercise price of $16.665 per unit upon completion
of a Business Combination and ending March 7, 2011. The UPO may be exercised for
cash or on a “cashless” basis, at the holder’s option, such that the holder may
use the appreciated value of the UPO (the difference between the exercise prices
of the UPO and the underlying warrants and the market price of the units and
underlying securities) to exercise the UPO without the payment of any cash. The
Class W Warrants and Class Z Warrants underlying the Series A Units and Series B
Units within the UPO will be exercisable a $5.50 per share.
The
Company has no obligation to net cash settle the exercise of the UPO or the
warrants underlying the UPO. The holder of the UPO will not be entitled to
exercise the UPO or the warrants underlying the UPO unless a registration
statement covering the securities underlying the UPO is effective or an
exemption from registration is available. If the holder is unable to exercise
the UPO or underlying warrants, the UPO or warrants, as applicable, will expire
worthless.
NOTE
9 —SUBSEQUENT EVENTS REVIEW
The
Company has evaluated all subsequent events through November 16, 2009, the date
this Quarterly Report on Form 10-Q was filed with the SEC.
On
November 13, 2009, the Company offered and sold an aggregate of 30,000,000
shares of Common Stock for an aggregate purchase price equal to $30,000 to Ralph
S. Sheridan, an officer and director of the Company and three of the Company’s
current shareholders, William McCluskey, the Hummingbird
Value fund, LP and FI Investment Group, LLC.
14
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
Forward
Looking Statement Notice
Certain
statements made in this Quarterly Report on Form 10-Q are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) in regard to the plans and objectives of management for future
operations. Such statements involve known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements of Good
Harbor Partners Acquisition Corp. (“we”, “us”, “our” or the “Company”) to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The forward-looking
statements included herein are based on current expectations that involve
numerous risks and uncertainties. The Company's plans and objectives are based,
in part, on assumptions involving the continued expansion of business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes its assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove inaccurate and, therefore, there
can be no assurance the forward-looking statements included in this Quarterly
Report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be
achieved.
The
following discussion should be read in conjunction with the Company’s unaudited
condensed financial statements and footnotes thereto contained in this Quarterly
Report filed on Form 10-Q and the Company’s audited financials statements and
footnotes thereto for the year ended December 31, 2008 included in the Company’s
Annual Report on Form 10-K filed on March 31, 2009.
Description
of Business
We were
formed on August 10, 2005 to serve as a vehicle to effect a merger, capital
stock exchange, asset acquisition or other similar business combination with an
entity that has an operating business in the security industry. We completed our
initial public offering (“IPO”) on March 15, 2006. We have neither engaged in
any operations, nor generated any revenues, nor incurred any debt or expenses
other than in connection with our IPO and thereafter, expenses related to
identifying and pursuing acquisitions of targets and expenses related to
liquidating the Class B Trust Fund and reconstituting the Company as an ongoing
business corporation. We have incurred expenses only in connection with (i) the
preparation and filing of our quarterly reports on Form 10-Q, annual reports on
Form 10-K and proxy statements in connection with the January 31, 2008
Stockholders’ Meeting and (ii) travel expenses related to finding and developing
acquisition candidates. Our travel expense policies are consistent with good
business practice, and we try to minimize such costs to the extent
possible.
During
the first nine months of 2007, the Directors aggressively pursued acquisition
opportunities in the security sector with an emphasis on information technology
security. In September, 2007 we announced that we had entered into letters of
intent with two companies. These companies were believed to be synergistic in
their capabilities to address security problems for large enterprise network
systems. In October and early November of 2007, the Board completed due
diligence, negotiated definitive agreements with each target company and worked
with counsel and other advisors to complete the SEC filings required to be made
in connection with the planned acquisitions. In the second week of November,
2007, we received financial information on one of the companies that
dramatically affected our valuation of that company and thus of the entire
combined transaction. Based on this information the combined value of the two
companies no longer met the minimum required by our charter documents and
initial public offering prospectus (“Prospectus”), i.e., eighty percent of the
value of the funds held in trust. After consulting with our investment bankers
and outside counsel, we withdrew the letters of intent and reported to our
stockholders that given the late date, we did not believe it was possible to
complete a new and different transaction within the time frame required by our
charter documents and Prospectus. For the balance of the quarter we worked on
the proxy statement and other materials necessary to obtain the stockholder vote
required to return early the funds held in trust for the B shareholders. The
meeting to accomplish that purpose was held on January 31, 2008 and at that
time, we also asked our remaining common stockholders to amend the charter to
allow continuation of the corporation after the return of the funds held in
Trust to the Class B stockholders, and the common stockholders voted to approve
the necessary amendments. In essence, the Company ceased to be a blank check
company on January 31, 2008. It is now a public shell company seeking a
merger candidate that will represent a good investment for its common
stockholders.
15
The trust funds in the amount of
$56,660,364 were transferred to the Class B stockholders on February 7,
2008.
The Company, based on proposed business
activities, is a “blank check” company. The Securities and Exchange Commission
(the “SEC”) defines those companies as "any development stage company that is
issuing a penny stock, within the meaning of Section 3(a)(51) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific
business plan or purpose, or has indicated that its business plan is to merge
with an unidentified company or companies." Many states have enacted statutes,
rules and regulations limiting the sale of securities of "blank check" companies
in their respective jurisdictions. The Company is also a “shell company,”
defined in Rule 12b-2 under the Exchange Act as a company with no or nominal
assets (other than cash) and no or nominal operations. Management does not
intend to undertake any efforts to cause a market to develop in our securities,
either debt or equity, until we have successfully concluded a business
combination. The Company intends to comply with the periodic reporting
requirements of the Exchange Act for so long as we are subject to those
requirements.
Our plan
is to identify a quality investment opportunity in an operating business, not
limited to the security industry, which can benefit from a reverse merger
transaction to become a publicly traded company and to subsequently utilize the
public equity markets to finance its growth strategy. During the first six
months of 2008, we began the process of identifying candidates meeting those
criteria and expanded our search beyond the security industry. The Company’s
principal business objective for the next 12 months and beyond such time will be
to achieve long-term growth potential through a combination with an operating
business.
From an
operational perspective, the Company had, and continues to have, no operating
business. Prior to returning the funds to the Class B stockholders, the Trust
and the excess cash working capital accounts were invested in separate accounts
with Bank of America. Expenses for the first six months of 2009 were paid in
connection with the following:
|
(i)
|
legal
and maintenance expenses in connection with the Company’s filings with the
SEC, including its annual report on Form 10-K, its quarterly report on
Form 10-Q;
|
|
|
(ii)
|
insurance
and corporate franchise
taxes;
|
|
(iii)
|
business
development expenses related to identifying, analyzing and performing due
diligence investigations of potential acquisition candidates, including
travel, expert technology valuation, and industry analysis;
and
|
|
|
(iv)
|
expenses
related to identifying and securing financing for and operational
continuity of the Company’s ongoing
business.
|
The
Company currently does not engage in any business activities that provide cash
flow. During the next twelve months we anticipate incurring costs related to
filing Exchange Act reports and investigating, analyzing and consummating an
acquisition. We believe we will be able to meet these costs through use of
funds in our treasury, through deferral of fees by certain service providers and
additional amounts, as necessary, to be loaned to or invested in us by our
stockholders, management or other investors.
16
The
Company may consider acquiring a business which has recently commenced
operations, is a developing company in need of additional funds for expansion
into new products or markets, is seeking to develop a new product or service, or
is an established business which may be experiencing financial or operating
difficulties and is in need of additional capital. In the alternative, a
business combination may involve the acquisition of, or merger with, a company
which does not need substantial additional capital but which desires to
establish a public trading market for its shares while avoiding, among other
things, the time delays, significant expense, and loss of voting control which
may occur in a public offering.
Our
management has had contact and discussions with representatives of other
entities regarding a business combination with us. Any target business that is
selected may be a financially unstable company or an entity in its early stages
of development or growth, including entities without established records of
sales or earnings. In that event, we will be subject to numerous risks inherent
in the business and operations of financially unstable and early stage or
potential emerging growth companies. In addition, we may effect a business
combination with an entity in an industry characterized by a high level of risk,
and, although our management will endeavor to evaluate the risks inherent in a
particular target business, there can be no assurance that we will properly
ascertain or assess all significant risks.
The
Company anticipates that the selection of a business combination will be complex
and extremely risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available capital, our
management believes that there are numerous firms seeking even the limited
additional capital which we will have and/or the perceived benefits of becoming
a publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures and the
like through the issuance of stock. Potentially available business
combinations may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
Liquidity
and Capital Resources
As of
September 30, 2009, the Company had assets equal to $2,353, comprised
exclusively of cash and cash equivalents. This compares with assets of $42,810,
comprised of cash and cash equivalents as of December 31, 2008. The Company’s
current liabilities as of September 30, 2009 total $7,194. This compares to the
Company’s current liabilities as of December 31, 2008 of $38,680, comprised of
accrued expenses. The Company can provide no assurance that it can continue
to satisfy its cash requirements for at least the next twelve
months.
The following is a summary of the
Company's cash flows provided by (used in) operating, investing, and financing
activities for the nine months ended September 30, 2009 and 2008 and for the
cumulative period from August 10, 2005 (Inception) to September 30,
2009:
|
The
Nine
Months
Ended
September
30,
2009
|
The
Nine
Months
Ended
September
30,
2008
|
For
the
Cumulative
Period
from
August
10, 2005
(Inception)
to
September
30,
2009
|
||||||||||
|
Net
Cash (Used in) Operating Activities
|
$ | (66,539 | ) | $ | (310,903 | ) | $ | (2,014,485 | ) | |||
|
Net
Cash Investing Activities
|
$ | - | $ | 56,660,364 | $ | 3,231,364 | ||||||
|
Net
Cash Provided by Financing Activities
|
$ | 26,082 | $ | (56,420,364 | ) | $ | (1,214,526 | ) | ||||
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
$ | (40,457 | ) | $ | (70,903 | ) | $ | 2,353 | ||||
17
In the
nine month period ending September 30, 2008 the redemption of Class B Common
shares resulted in $56,660,364 being distributed to shareholders from the Trust
Fund.
We may
have to raise additional funds to continue operating the business of the Company
and believe such funds will be available to us from existing stockholders.
However, we cannot assure you that such funds will be available on a timely
basis or at a reasonable cost. Additionally, we may need to raise additional
funds through a private offering of debt or equity securities if such funds are
required to consummate a business combination. We would likely consummate such a
fundraising simultaneously with the consummation of a reverse merger transaction
or other business combination. The issuance of additional shares of our capital
stock may:
|
|
significantly
reduce the equity interest of our current stockholders;
|
|
|
|
result
in the subordination of the rights of holders of our common stock, par
value $.0001 per share (the “Common Stock”) if shares of our preferred
stock, par value $.0001 per share (the “Preferred Stock”) is issued with
rights senior to those afforded to our Common Stock;
|
|
|
|
cause
a change in control if a substantial number of our shares of Common Stock
are issued, which would affect, among other things, our ability to use our
net operating loss carry forwards, if any, and might also result in the
resignation or removal of one or more of our officers and directors;
and
|
|
|
|
adversely
affect prevailing market prices for our
securities.
|
Similarly,
the issuance of additional debt securities may result in:
|
|
default
and foreclosure on our assets, if our operating revenues after a business
combination are insufficient to pay our debt obligations;
and
|
|
|
|
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 any such covenant is breached without a waiver or
renegotiation of that covenant.
|
The
Company has nominal assets and has generated no revenues since inception. The
Company is also dependent upon the receipt of capital investment or other
financing to fund its ongoing operations and to execute its business plan of
seeking a combination with a private operating company. In addition, the Company
is dependent upon certain related parties to provide continued funding and
capital resources. If continued funding and capital resources are unavailable at
reasonable terms, the Company may not be able to implement its plan of
operations.
Results
of Operations
Our net
loss for the three months ended September 30, 2009 was $(9,632) as a result of
$6,382 in general administration expenses and $3,250 in professional fees. This
compares with a net loss for the three months ended September 30, 2008 of
$(110,207) as a result of $21,359 in general and administrative expenses and
$88,848 in professional fees.
Our net
loss for the nine months ended September 30, 2009 was $(32,971) as a result of
$18,947 in general administration expenses, $13,718 in professional fees and
$306 in Delaware franchise taxes. This compares with a net loss for the nine
months ended September 30, 2008 of $(132,397) as a result of net interest income
of $142,378, $80,596 in general and administrative expenses, $181,415 in
professional fees, and $12,764 in Delaware franchise taxes.
Our net
income for the period from inception (August 10, 2005) to September 30, 2009 was
$1,211,768 as a result of interest income on the Trust Fund investment of
$3,231,364 and interest on cash and cash equivalents of $58,962, offset by
$651,248 in general and administrative expenses, $1,307,281 for professional
fees, and $120,029 for Delaware franchise tax.
18
It is
unlikely the Company will have any revenues unless it is able to effect an
acquisition or merger with an operating company, of which there can be no
assurance. The Company’s plan of operation for the next twelve months
shall be to continue its efforts to locate suitable acquisition
candidates.
Critical
Accounting Policies
We
believe the following accounting policies involve the most significant judgments
and estimates used in the preparation of our financial statements: Cash and Cash
Equivalents, Investments, Net Income (loss) Per Share and Use of Estimates and
Assumptions. These significant accounting policies are described in detail in
Note 3 to our third quarter unaudited condensed financial statements included
herein.
Off-Balance Sheet
Arrangements
The
Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company’s financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
Contractual
Obligations
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
information required by this Item.
Item
4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
We maintain disclosure controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed pursuant to the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules,
regulations and related forms, and that such information is accumulated and
communicated to our sole officer to allow timely decisions regarding required
disclosure.
As of September 30, 2009, we carried
out an evaluation, under the supervision and with the participation of our sole
officer of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our principal executive
officer and our principal financial officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
this report.
Changes
in Internal Controls
There have been no changes in our
internal controls over financial reporting during the quarter ended September
30, 2009 that have materially affected or are reasonably likely to materially
affect our internal controls.
19
PART II — OTHER
INFORMATION
Item
1. Legal Proceedings.
To the best knowledge of our officers
and directors, the Company is not a party to any legal proceeding or
litigation.
Item
1A. Risk Factors.
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
information required by this Item.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
On June
18, 2009, the Company repurchased an aggregate of 1,200,000 shares (the
“Shares”) of its Common Stock from HCFP Brenner Holdings, LLC for an aggregate
purchase price equal to $30,000 (the “Repurchase”) and pursuant to the terms and
conditions contained in that certain repurchase agreement (the “Repurchase
Agreement”). The Repurchase Agreement is filed as exhibit 10.1 to the
Company’s Form 8-K filed with the Securities and Exchange Commission on June 24,
2009 and incorporated herein by reference.
On June
18, 2009, the Company sold 1,200,000 shares of its common stock, par value
$.0001 per share (the “Common Stock”) to The Tarsier Nanocap Value Fund LP, a
Delaware limited
partnership (“Tarsier”). The Company sold such shares of Common Stock
to Tarsier for an aggregate purchase price equal to $30,000 (the “Sale of
Stock”) and pursuant to the terms and conditions contained in that certain
common stock purchase agreement (the “Purchase Agreement”). The
Company consummated the Sale of Stock under the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”). The Purchase Agreement is
filed as Exhibit 10.2 to the Company’s Current report on Form 8-K filed with the
Securities and Exchange Commission on June 24, 2009 and is incorporated herein
by reference.
On
November 13, 2009, the Company offered and sold an aggregate of 30,000,000
shares of Common Stock for an aggregate purchase price equal to $30,000, to
Ralph S. Sheridan, an officer and director of the Company and three of the
Company’s current shareholders, William McCluskey, Hummingbird Value Funds LP
and FI Investment Group, LLC pursuant to the terms and conditions set forth in
the form of common stock purchase agreement (the “Common Stock Purchase
Agreements”), attached hereto as Exhibit 10.3. The
Company sold these shares of Common Stock under the exemption from registration
provided by Section 4(2) of the Securities Act and Regulation D promulgated
thereunder.
No
securities have been issued for services. Neither the Registrant nor any person
acting on its behalf offered or sold the securities by means of any form of
general solicitation or general advertising. No services were performed by any
purchaser as consideration for the shares issued.
Item 3. Defaults Upon
Senior Securities.
None.
Item 4. Submission of
Matters to a Vote of Security Holders.
None.
20
Item 5. Other
Information.
Departure
of Directors or Principal Officers; Election of Directors.
(a) On
November 13, 2009, and effective as of that date, Michael Greenberg resigned
from his position as member of the Board of Directors of the
Company. Mr. Greenberg’s resignation letter is attached hereto as
Exhibit 17.1.
(b) On
November 13, 2009, the Board of Directors appointed Paul Sonkin to serve as a
member of the Board of Directors to fill the vacancy on the board of directors
as described herein.
Biographical
Information for Paul D. Sonkin, Director
Paul D.
Sonkin, was elected to our board of directors in November of 2009. He
has served as the Chief Investment Officer to Hummingbird Value Fund, L.P., a
Delaware limited partnership, since its inception in December 1999, and to
Tarsier Nanocap Value Fund, LP, since its inception in June 2005. Since January
1998, Mr. Sonkin has served as an adjunct professor at Columbia University
Graduate School of Business, where he teaches courses on securities analysis and
value investing. From May 1998 to May 1999, Mr. Sonkin was a senior analyst at
First Manhattan & Co., a firm that specializes in mid and large cap value
investing. From May 1995 to May 1998 Mr. Sonkin was an analyst and
portfolio manager at Royce & Associates, which practices small and micro cap
value investing. Mr. Sonkin is a member of the Board of Directors of Conihasset
Capital Partners, Inc. and QueryObject Systems Corp. Mr. Sonkin received an MBA
from Columbia University and a BA degree in Economics from Adelphi
University.
Item
6. Exhibits.
|
(a)
|
Exhibits
required by Item 601 of Regulation
S-K.
|
|
Exhibit Number
|
Description
|
||
|
*3.1
|
Amended
and Restated Certificate of Incorporation.
|
||
|
*3.2
|
Amended
By-Laws.
|
||
|
**10.1
|
Repurchase
Agreement by and between the Company and HCFP Brenner Holdings, LLC, dated
June 18, 2009
|
||
|
**10.2
|
Common
Stock Purchase Agreement by and between the Company and The Hummingbird
Value Fund, LP, dated June 18, 2009
|
||
|
10.3
|
Form
of Common Stock Purchase Agreement, dated November 13,
2009
|
||
|
17.1
|
Resignation
Letter of Michael Greenberg, dated November 13, 2009
|
||
|
31.1
|
Certification
of the Company’s Principal Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly
Report on Form 10-Q for the quarter ended September 30,
2009.
|
||
|
31.2
|
Certification
of the Company’s Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly
Report on Form 10-Q for the quarter ended September 30,
2009.
|
||
|
32.1
|
Certification
of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
||
|
32.2
|
|
Certification
of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
|
*
|
Filed
as an Exhibit to the Company’s Current Report on Form 8-K, as filed with
the Securities andExchange
Commission on February 1, 2008 and incorporated herein by this
reference.
|
|
**
|
Filed
as an Exhibit to the Company’s Current Report on Form 8-K, as filed with
the Securities and Exchange
Commission on June 24, 2009 and incorporated herein by this
reference.
|
21
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
|
GOOD
HARBOR PARTNERS ACQUISITION CORP.
|
||
|
By:
|
/s/ Ralph S. Sheridan
|
|
|
Ralph
S. Sheridan
|
||
|
Chief
Executive Officer, President, Secretary and Director
|
||
|
Principal
Executive Officer
|
||
|
Principal
Financial Officer
|
||
|
Principal
Accounting Officer
|
||
22