Attached files
file | filename |
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EX-32.2 - Pinpoint Advance CORP | v185471_ex32-2.htm |
EX-31.1 - Pinpoint Advance CORP | v185471_ex31-1.htm |
EX-31.2 - Pinpoint Advance CORP | v185471_ex31-2.htm |
EX-32.1 - Pinpoint Advance CORP | v185471_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
(Mark
One)
x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
quarterly period ended March 31,
2010
¨
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
For the
transition period from _____________ to _____________
Commission
File Number 000-52562
Pinpoint Advance
Corp.
(Exact
name of small business issuer as specified in its charter)
Delaware
|
20-1144642
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
4 Maskit Street, Herzeliya,
Israel 46700
(Address
of principal executive offices)
972
9-9500245
(Issuer's
telephone number)
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. x Yes ¨ No
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes ¨ No ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
x Yes ¨ No
As of May
14, 2010 there were 359,402 shares of common stock, par value $.0001 per share,
issued and outstanding and 3,125,000 shares of Class A Common Stock, par value
$.0001 per share issued and outstanding.
ITEM
1: FINANCIAL STATEMENTS.
PINPOINT
ADVANCE CORP.
(a
development stage corporation)
FINANCIAL
STATEMENTS
as
of March 31, 2010
In
U.S. Dollars
INDEX
Page
|
||||
Balance
Sheets
|
F-2 | |||
Statements
of Operations
|
F-3 | |||
Statements
of Stockholders’ Equity
|
F-4 | |||
Statements
of Cash Flows
|
F-5 | |||
Notes
to Financial Statements
|
F-6 |
F-1
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
BALANCE
SHEETS
March
31,
2010
|
March
31,
2009
|
December
31,
2009
|
||||||||||
ASSETS
|
||||||||||||
Current
assets
|
||||||||||||
Cash
|
$ | 2,123 | $ | 4,286 | $ | 8,071 | ||||||
Deposit
|
317 | 317 | 317 | |||||||||
Cash
held in trust (Note 1)
|
- | 28,512,608 | - | |||||||||
Prepaid
expense and other accounts receivable
|
71,925 | 169,536 | 76,425 | |||||||||
Total
Assets
|
$ | 74,365 | $ | 28,686,747 | $ | 84,813 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||||
Current
Liabilities
|
||||||||||||
Accrued
expenses and other accounts payable
|
$ | 158,163 | $ | 146,183 | $ | 148,995 | ||||||
Common
Stock subject to conversion
|
- | 28,491,250 | - | |||||||||
Total
current liabilities
|
158,163 | 28,637,433 | 148,995 | |||||||||
Commitments and Contingencies
(Note 4)
|
||||||||||||
Stockholders’ Deficiency
(Note 5)
|
||||||||||||
Preferred
stock – $.0001 par value; 1,000,000 authorized; none issued or
outstanding
|
||||||||||||
Common
stock $.0001 par value; 15,000,000
|
||||||||||||
Authorized,
359,402 issued and outstanding;
|
37 | 37 | ||||||||||
Common
stock, Class A, $0.0001 par value, 5,000,000 Authorized, 3,125,000 issued
and outstanding; and 0 shares issued and outstanding
|
313 | 264 | 313 | |||||||||
Additional
paid-in capital
|
- | - | - | |||||||||
Deficit
accumulated during the development stage
|
(84,148 | ) | 49,050 | (64,532 | ) | |||||||
Total stockholders’
deficit
|
83,798 | 49,314 | (64,182 | ) | ||||||||
Total
liabilities and stockholders' deficiency
|
$ | 74,365 | $ | 28,686,747 | $ | 84,813 |
The
accompanying notes should be read in conjunction with the financial
statements
F-2
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
STATEMENTS
OF OPERATIONS
Period
ended
March 31, 2010
|
Period
Ended
March 31, 2009
|
For the period from
September 6, 2006
(inception) to March 31,
2009
|
For the period
from September
6, 2006
(inception) to
March 31, 2010
|
|||||||||||||
State
franchise tax
|
$ | 36 | $ | 9,993 | $ | 97,543 | $ | 109,876 | ||||||||
Formation
and operating costs
|
- | - | 1,000 | 1,000 | ||||||||||||
Other
general and administrative expenses
|
18,491 | 79,637 | 1,142,972 | 1,303,630 | ||||||||||||
Bank
charges and interest expense
|
1,089 | 87 | 2,757 | 3,990 | ||||||||||||
Loss
from operation
|
19,616 | 89,717 | 1,244,272 | 1,418,496 | ||||||||||||
Interest
income (expense)
|
- | 5,953 | 1,359,678 | 1,359,678 | ||||||||||||
Income
(loss) before provision for income tax
|
(19,616 | ) | (95,670 | ) | 115,406 | (58,818 | ) | |||||||||
Provision
for income tax
|
- | 163,484 | 45,556 | 4,444 | ||||||||||||
Net
income (loss) for the period
|
$ | (19,616 | ) | $ | 67,814 | $ | 69,850 | $ | (63,262 | ) | ||||||
|
||||||||||||||||
Accretion
of trust fund relating to common stock subject to possible
redemption
|
- | - | (3,042 | ) | (3,042 | ) | ||||||||||
Net
income (loss) attributable to other common stockholders
|
$ | (19,616 | ) | $ | 67,814 | $ | 66,808 | $ | (66,304 | ) | ||||||
|
||||||||||||||||
Net
earnings (loss) per share -
|
||||||||||||||||
basic
|
$ | (0.01 | ) | $ | 0.07 | |||||||||||
diluted
|
$ | (0.01 | ) | $ | 0.06 | |||||||||||
Weighted
average shares outstanding
|
||||||||||||||||
basic
|
3,484,402 | 984,402 | ||||||||||||||
diluted
|
3,550,808 | 1,050,808 | ||||||||||||||
Net
loss per share subject to possible conversion
|
||||||||||||||||
Basic
and diluted
|
- | - | ||||||||||||||
Weighted
average shares outstanding subject to possible conversion
|
- | 107,777 | ||||||||||||||
Net
loss per class A share
|
||||||||||||||||
Basic
and diluted
|
3,125,000 | - | ||||||||||||||
Weighted
average class A shares outstanding
|
||||||||||||||||
Basic
and diluted
|
$ | (0.01 | ) | - |
The
accompanying notes should be read in conjunction with the financial
statements
F-3
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
For
the period from September 6, 2006 (inception) to March 31, 2010
Common stock
|
Common stock, Class A
|
Additional Paid-in
capital
|
Deficit
accumulated
during the
development stage
|
Total
Stockholders’ equity
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Balance
September 6, 2006 (inception)
|
— | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Common
stock issued September 6, 2006 at $.0001 per share
|
828,125 | 83 | — | — | 24,917 | 25,000 | ||||||||||||||||||||||
Net
loss for the period
|
(8,140 | ) | (8,140 | ) | ||||||||||||||||||||||||
Balances
at December 31, 2006
|
828,125 | 83 | — | — | 24,917 | (8,140 | ) | 16,860 | ||||||||||||||||||||
Shares
decreased as a result of a reverse split
|
(203,125 | ) | (20 | ) | — | — | 20 | — | — | |||||||||||||||||||
Proceeds
from sale of underwriter’s purchase option
|
— | — | — | — | 100 | — | 100 | |||||||||||||||||||||
Proceeds
from issuance of warrants
|
— | — | — | — | 1,500,000 | — | 1,500,000 | |||||||||||||||||||||
Sale
of 2,875,000 units through public offering net of underwriter’s discount
and offering expenses and net of $8,506,963 of proceeds allocable to
862,212 shares of common stock subject to possible
conversion
|
2,012,788 | 201 | — | — | 17,475,949 | — | 17,476,150 | |||||||||||||||||||||
Net
income for the period (audited)
|
— | — | — | — | — | 397,249 | 397,249 | |||||||||||||||||||||
Accretion
of trust fund relating to common stock subject to possible
conversion
|
— | — | — | — | — | (118,777 | ) | (118,777 | ) | |||||||||||||||||||
Balances
at December 31, 2007
|
2,637,788 | 264 | — | — | 19,000,986 | 270,332 | 19,271,582 | |||||||||||||||||||||
Net
loss for the period (audited)
|
— | — | — | — | — | (387,073 | ) | (387,073 | ) | |||||||||||||||||||
Accretion
of trust fund relating to common stock subject to possible
conversion
|
— | — | — | — | — | 115,735 | 115,735 | |||||||||||||||||||||
Reclassification
of underwriting and legal fees to additional paid-in
capital
|
— | — | — | — | 962,500 | — | 962,500 | |||||||||||||||||||||
Reclassification
of common stock value subject to
redemption
to current liability
|
— | — | — | — | (19,963,486 | ) | (17,758 | ) | (19,981,244 | ) | ||||||||||||||||||
Balances
at December 31, 2008
|
2,637,788 | 264 | — | — | — | (18,764 | ) | (18,500 | ) | |||||||||||||||||||
Reclassification
of redeemable shares
|
862,212 | 86 | — | — | — | (86 | ) | — | ||||||||||||||||||||
Shares
decrease as a result of reverse split
|
(2,515,598 | ) | (251 | ) | — | — | 251 | — | — | |||||||||||||||||||
Return
and cancellation of initial stockholders common stock
|
(625,000 | ) | (62 | ) | — | — | 62 | — | — | |||||||||||||||||||
Issuance
of common stock to initial stockholders
|
— | — | 3,125,000 | 313 | (313 | ) | — | — | ||||||||||||||||||||
Net
loss for the period (audited)
|
— | — | — | — | — | (45,682 | ) | (45,682 | ) | |||||||||||||||||||
Balances
at December 31, 2009
|
359,402 | $ | 37 | 3,125,000 | 313 | — | $ | (64,532 | ) | $ | (64,182 | ) | ||||||||||||||||
Net
Loss for the period (unaudited)
|
(19,616 | ) | (19,616 | ) | ||||||||||||||||||||||||
Balances
at March 31,2010
|
359,402 | $ | 37 | 3,125,000 | 313 | — | $ | (84,148 | ) | $ | (83,798 | ) |
The
accompanying notes should be read in conjunction with the financial
statements
F-4
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
STATEMENTS
OF CASH FLOWS
Period
ended
March
31, 2010
|
Period
Ended
March
31, 2009
|
For
the period from
September
6, 2006
(inception)
to March 31,
2009
|
For
the period from
September
6, 2006
(inception)
to March
31,
2010
|
|||||||||||||
OPERATING
ACTIVITIES
|
||||||||||||||||
Net
income (loss) for the period
|
$ | (19,616 | ) | 67,814 | $ | 69,850 | $ | (63,262 | ) | |||||||
Increase
(Decrease) in accrued expenses and other accounts
payable
|
9,168 | 70,183 | 356,345 | 368,324 | ||||||||||||
(Increase)
Decrease in prepaid expenses and other accounts receivable
|
4,500 | (158,425 | ) | (169,536 | ) | (71,925 | ) | |||||||||
Net
cash provided (used) in operating activities
|
(5,948 | ) | (20,428 | ) | 256,659 | 233,138 | ||||||||||
INVESTING
ACTIVITIES
|
||||||||||||||||
Cash
contributed to Trust Fund
|
- | 16,334 | 28,512,606 | (- | ) | |||||||||||
Net
cash used in investing activities
|
- | 16,334 | 28,512,606 | (- | ) | |||||||||||
FINANCING
ACTIVITIES
|
||||||||||||||||
Proceeds
from issuance of common stock to initial stockholders
|
- | - | 25,000 | 25,000 | ||||||||||||
Proceeds
from loans from related party
|
- | - | 151,210 | 151,210 | ||||||||||||
Payment
of loans from related party
|
- | - | (151,210 | ) | (151,210 | ) | ||||||||||
Deposit
|
- | - | (317 | ) | (317 | ) | ||||||||||
Payment
of Deferred offering cost
|
- | - | (210,161 | ) | (210,161 | ) | ||||||||||
Proceeds
from issuance of insider warrants
|
1,500,000 | 1,500,000 | ||||||||||||||
Proceeds
from purchase of underwriter’s purchase option
|
100 | 100 | ||||||||||||||
Redemption
of common stock
|
(28,491,250 | ) | ||||||||||||||
Portion
of net proceeds from sale of units through public offering allocable to
shares of common stock subject to possible conversion
|
- | - | 8,506,963 | 8,506,963 | ||||||||||||
Net
proceeds from sale of units through public offering allocable
to:
|
||||||||||||||||
Stockholders’
equity
|
- | - | 18,438,650 | 18,438,650 | ||||||||||||
Net
cash provided by financing activities
|
$ | - | - | $ | 28,260,235 | $ | (231,015 | ) | ||||||||
Net
increase in cash
|
$ | (5,948 | ) | (4,094 | ) | $ | 4,286 | $ | 2,123 | |||||||
Cash
|
||||||||||||||||
Beginning
of period
|
8,071 | 8,380 | - | - | ||||||||||||
End
of period
|
$ | 2,123 | 4,286 | $ | 4,286 | $ | 2,123 | |||||||||
Supplemental
disclosure of non-cash activity:
|
||||||||||||||||
Fair
value of underwriter’s purchase option included in offering
costs
|
- | - | 738,750 | 738,750 | ||||||||||||
Deferred
legal fees against additional paid-in capital
|
100,000 | 100,000 | ||||||||||||||
Deferred
underwriting fees against additional paid-in capital
|
- | - | 862,500 | 862,500 | ||||||||||||
Supplemental
disclosure of cash flow information:
|
||||||||||||||||
Cash
paid during the period for income taxes
|
5,918 | 8,165 | 296,020 | 318,978 | ||||||||||||
Cash
paid during the period for interest
|
- | 8,170 | 8,170 | 5,953 |
The
accompanying notes should be read in conjunction with the financial
statements
F-5
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
NOTES
TO FINANCIAL STATEMENTS
NOTE
1-DISCUSSION OF THE COMPANY’S ACTIVITIES
Organization and activities:
Pinpoint Advance Corp. (the “Company”) was incorporated in Delaware on September
6, 2006, as a blank check company that was formed for the purpose of acquiring,
merging with, engaging in a capital stock exchange with, purchasing all or
substantially all of the assets of, or engaging in any other similar business
combination with a business that has operations or facilities located in Israel
or which is a company operating outside of Israel, specifically in Europe, which
management believes would benefit from establishing operations or facilities in
Israel, preferably in the technology sector (“Target Business”). All activity
from inception (September 6, 2006) through December 31, 2009 was related to the
Company’s formation and capital raising activities. The Company has selected
December 31 as its fiscal year end.
The
Company is considered to be a development stage company and as such the
financial statements presented herein are presented in accordance with Statement
of Financial Accounting Standards ASC 915 "Development Stage Entities" (formerly
SFAS No. 7).
The
registration statement for the Company’s initial public offering (“Offering”)
was declared effective on April 19, 2007. On April 25, 2007, the Company
completed a private placement ("Private Placement") and received net proceed of
$1.5 million. The Company consummated the Offering on April 25, 2007 for net
proceeds of approximately $27 million (including the over
allotment).
On
October 27, 2008, the Company announced it had executed a letter of intent to
effectuate a business combination with a privately-held company with its
headquarters in Israel (the "LOI"). All parties to the LOI negotiated the terms
of a definitive agreement and in fact, a definitive agreement (the "Agreement")
was executed by all parties to the LOI. However, one of the parties to the
Agreement claimed it never released its signature thereto and has since
indicated that it no longer wished to pursue the proposed business
combination.
The
Company believes a binding, definitive agreement was executed by all parties and
is currently reviewing all available legal options. However, because one of the
parties has indicated its position that no binding agreement currently exists
and that it does not wish to continue with negotiations at this time, the
Company has determined to liquidate the trust account established by the Company
for the benefit of its public stockholders, and to return funds to the holders
of shares of the Company common stock issued in its initial public offering, in
accordance with its IPO prospectus and the terms of its amended and restated
certificate of incorporation.
F-6
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
NOTES
TO FINANCIAL STATEMENTS-Continued
At a
Special Meeting held on May 15, 2009, a majority of the Company stockholders
voted in favor of the proposal to remove the blank check company restrictions
from the Company’s charter, thereby allowing the Company to continue its
corporate existence. In accordance with stockholder approval of the Company’s
proposals, on May 19, 2009 the Company effectuated the redemption of the shares
of common stock issued in the Company’s initial public offering in an amount of
$9.91 per share from the Company’s trust account and distribution of one share
of new common stock for every eight IPO Shares redeemed. The
stockholders also approved the creation of a new class of common stock called
Class A Common Stock and exchanged each share of common stock held by the
initial stockholders for five shares of Class A Common Stock. The class A shares
rights are identical to the new common shares rights
The
warrants that issued in the initial public offering remain outstanding with no
changes in the original terms.
Going concern consideration As
indicated in the accompanying financial statements, at March 31, 2010, the
Company had $2,123 in cash, current liabilities of $158,163 and working capital
deficit of $84,148. Further, the Company has incurred and expects to continue to
incur costs. These factors, among others, indicate that the Company may be
unable to continue operations as a going concern unless further financing from
related parties is consummated.
NOTE
2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents—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. The Company did not hold any cash equivalents as of March 31,
2010.
Trust Account-The Company's
restricted cash and cash equivalents was held in the Trust Account until May 19,
2009 and was invested in a money market fund. The Company recognized interest
income $1,359,678 from inception (September 6, 2006) to May 19, 2009 on such
money market fund, which is included in interest income on the accompanying
statements of operations.
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 may maintain 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.
Net Income per Share-Basic
earnings (loss) per share are computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Basic earnings per share subject to possible conversion is calculated by
dividing accretion of Trust Account relating to common stock subject to possible
conversion by 107,777 common shares subject to possible conversion. Diluted
earnings per share reflect the additional dilution for all potentially dilutive
securities such as stock warrants and options. The effect of the 1,500,000
outstanding warrants, issued in connection with the private placement described
in Note 1 and the warrants issued in connection with the public offering has not
been considered in the diluted net earnings per share since the warrants are
contingently exercisable. The effect of the 125,000 units included in the
underwriters purchase option, as described in Note 5, along with the warrants
underlying such units, has not been considered in the diluted earnings per share
calculation since the market price of the unit was less than the exercise price
during the period.
Fair Value of Financial
Instruments-the fair values of the Company’s assets and liabilities that
qualify as financial instruments under ASC 825 "Financial Instrument" (SFAS No.
107) “Disclosures about Fair Value of Financial Instrument,” approximate their
carrying amounts presented in the balance sheet at March 31,
2010.
F-7
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
NOTES
TO FINANCIAL STATEMENTS-Continued
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 effect 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.
Income Taxes-Deferred income
tax assets and liabilities are computed for differences between the financial
statement and tax basis 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.
Recently
Adopted Accounting Standards
The
Company evaluates the pronouncements of various authoritative accounting
organizations, primarily the Financial Accounting Standards Board (“FASB”), the
SEC, to determine the impact of new pronouncements on US GAAP and the impact on
the Company. In June 2009, FASB established the Accounting Standards
Codification (“ASC”) as the single source of authoritative US GAAP to be applied
by nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative US GAAP
for SEC registrants. The ASC is a new structure which took existing accounting
pronouncements and organized them by accounting topic. The ASC did not change
current US GAAP, but was intended to simplify user access to all authoritative
US GAAP by providing all the relevant literature related to a particular topic
in one place. All previously existing accounting standards were superseded and
all other accounting literature not included in the ASC is considered
non-authoritative. New accounting standards issued subsequent to June 30, 2009
will be communicated by the FASB through Accounting Standards Updates (“ASU”).
The ASC was effective during the period ended September 30, 2009. Adoption of
the ASC did not have an impact on the Company’s financial position, results of
operations or cash flows.
The
Company has recently adopted the following new accounting
standards:
Subsequent Events - In May
2009, the ASC guidance for subsequent events was updated to establish accounting
and reporting standards for events that occur after the balance sheet date but
before financial statements are issued. The guidance was amended in February
2010 via ASU No. 2010-09. The standard 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 in its
financial statements, and (iii) the disclosures that an entity should make about
events or transactions occurring after the balance sheet date in its financial
statements. The amended ASU was effective immediately and its adoption had no
impact on the Company’s financial position, results of operations or cash
flows.
Fair Value Measurements – In
January 2010, ASU No. 2010-06 amended existing disclosure requirements about
fair value measurements by adding required disclosures about items transferring
into and out of levels 1 and 2 in the fair value hierarchy; adding separate
disclosures about purchase, sales, issuances, and settlements relative to level
3 measurements; and clarifying, among other things, the existing fair value
disclosures about the level of disaggregation. The ASU was adopted during the
period ended March 31, 2010, and its adoption had no impact on the Company’s
financial position, results of operations or cash flows.
F-8
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
NOTES
TO FINANCIAL STATEMENTS-Continued
Recently
Issued Accounting Standards Updates
The
Company does not believe that recently issued, but not yet effective, accounting
standards if currently adopted would have a material effect on the accompanying
financial statements.
NOTE
3-DEFFERED UNDERWRITING FEE
In
connection with the Offering, the Company entered into an underwriting agreement
(the “Underwriting Agreement”) with the underwriters in the
Offering.
Pursuant
to the Underwriting Agreement, the Company was obligated to the underwriters for
certain fees and expenses related to the Offering, including underwriting
discounts of $2.2 million (with over allotment exercised). The Company paid $1.4
million, of the underwriting discount upon closing of the Offering (including
the over allotment). The Company and the underwriters have agreed that payment
of the balance of the underwriting discount of $862.5 thousands will be deferred
until consummation of the business combination.
In
connection with the Offering, the Company entered into an engagement agreement
(the “Engagement Agreement”) with its legal counsel in the Offering.
Pursuant to the Engagement Agreement, the Company was obligated to its
legal counsel for certain fees and expenses related to the Offering, including
an aggregate legal fee of $250,000. The Company paid $150,000 of the
legal fee upon closing of the Offering.
The
Company was unable to consummate a business combination within the time allotted
and all deferred legal fees and deferred underwriter fees were distributed to
stockholders as part of the trust distribution.
As
discussed in Note 1, those fees has been reclassified to the Additional Paid-in
capital and will not be payable upon liquidation.
NOTE
4- COMMITMENTS AND CONTINGENCIES
On
December 8, 2009, the Company and others, filed a lawsuit against Elbit Systems
Holdings Ltd. ("Elbit") and others, in the Petah Tikva District Court of Israel,
for damages in the amount of NIS 37.7
million ($10 million) (the "Lawsuit"). The Lawsuit is based on the
following factual background:
|
a.
|
That
following a period of extensive negotiations between inter alia, the
Company and Elbit, a July 2008 Letter of Intent was signed, which
contemplated inter alia, the Company purchase from Elbit of 31% of
Kinetics, i.e. 18,716 Ordinary Shares of Kinetics Ltd. (the "Kinetics
Shares"), in the amount of $ 26 million Following said purchase, a merger
between the Company and Kinetics was to be
effectuated;
|
|
b.
|
That
the Company, as a Blank Check company and in order to fulfill its duty to
obtain timely shareholders' approval, was compelled to finalize the deal
by October 18, 2008;
|
|
c.
|
That
based on the Letter of Intent, and a belief at the time of Elbit's good
faith, the Company continued negotiating a definitive agreement with all
parties involved in the
transaction;
|
F-9
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
NOTES
TO FINANCIAL STATEMENTS-Continued
|
d.
|
That
after lengthy negotiations, a definitive agreement was finalized, and
signed, in early October 2009;
|
|
e.
|
That
Elbit's signature on the definitive agreement was withheld, based on
Elbit's claim that it had "just received" information about a new order
that would raise the forecast of Kinetics' profits in
2009;
|
The
Lawsuit seeks reparation for damages caused to plaintiffs as a result of
defendants' lack of good faith in negotiations, and requests that the Court hold
that defendants materially breached the definitive agreement, that defendants
are estopped from denying that the definitive agreement was finalized, and that
defendants acted with fraud, and alternatively, with recklessness. The Lawsuit
also alleges that Elbit was unjustly enriched by its conduct, and that any
enrichment as a result of Elbit's retention of the Kinetics Shares belongs to
the Company.
The
Lawsuit is in preliminary stages. Defendants have filed a Statement of Defense,
and pursuant to Court suggestion, the parties have submitted their dispute to
mediation, a process which has not yet begun. Therefore the Company cannot opine
on the likelihood of success at the present time.
NOTE
5-STOCKHOLDER’S EQUITY
In its
initial public offering, effective April 19, 2007 (closed on April 25,
2007), the Company sold to the public 2,875,000 Units (the “Units” or a “Unit”)
at a price of $10.00 per Unit. Each unit consisted of one share and one warrant.
Each warrant entitles the holder to purchase one share of the Company's common
stock at a price of $7.50. Proceeds from the initial public offering and the
Private placement totaled approximately $28.5 million, which was net of
approximately $1.6 million in underwriting fees and other expenses paid at
closing.
The
Company also sold to underwriters for $100 an option to purchase up to 125,000
Units.
On May
19, 2009 in accordance with stockholder consent, the Company effectuated the
exchange and redemption of its capital stock whereby holders of stock in the
Company’s initial public offering received one share of new common stock for
eight shares held and issued one share of Class A common stock for each share of
common stock purchased prior to the Company’s offering for an aggregate of
359,402 shares of new common stock and 3,125,000 shares of Class A common stock.
The rights of holders of Class A common stock are identical to the new
common shares.
The
warrants issued in the initial public offering remain outstanding with no
changes in the original terms.
F-10
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
NOTES
TO FINANCIAL STATEMENTS-Continued
NOTE
6- WARRANTS AND OPTION TO PURCHASE COMMON STOCK
The
Company was unable to effectuate the business combination within the time
allotted and the deferred underwriting discount was distributed to stockholders
as part of the trust distribution. Immediately prior to the Offering
the Company sold to certain of the initial Stockholders 1,500,000 warrants
("Private Warrants"), for an aggregate purchase price of $1.5 million. All of
the proceeds received from the sale of the Insider warrants were placed in the
trust account. The Insider warrants are identical to the warrants offered in the
Offering except that the warrants included therein are not redeemable while held
by the insider or his permitted transferees. All of the Company’s stockholders
prior to the Offering (“Initial Stockholders”) agreed to vote the shares of
common stock owned by them immediately before the Offering and the Private
Placement in accordance with the majority of the shares of common stock voted by
the public stockholders. All of such holders have waived their rights to
participate in any liquidation distribution occurring upon failure of the
Company to consummate a business combination.
The
public warrants, and the underwriter's unit purchase option and the warrants
included in the underwriter’s unit purchase option, are not subject to net cash
settlement in the event the Company is unable to maintain an effective 1933 Act
registration statement. The Company must use best efforts to file and
maintain the effectiveness of the registration statement for the warrants set
forth above as well as the securities issuable upon exercise of the
underwriter’s unit purchase option. Such warrants are only
exercisable to the extent the Company is able to maintain such
effectiveness. The unit purchase option (but not the underlying
warrants), however, may be exercised by means of cashless exercise even in the
absence of an effective registration statement for the underlying
securities. If a holder of public warrants or the holder of the
underwriter’s unit purchase option, or warrants underlying the underwriter’s
unit purchase option, does not, or is not able to, exercise such warrants,
underwriter’s unit purchase option or warrants underlying such underwriter’s
unit purchase option, as applicable, such warrants, underwriter unit purchase
option or underlying warrants, as applicable, will expire
worthless.
The
warrants issued in the initial public offering remain outstanding with no
changes in the original terms.
F-11
PINPOINT
ADVANCE CORP.
(A
development stage corporation)
NOTES
TO FINANCIAL STATEMENTS-Continued
NOTE
7-CAPITAL STOCK
Preferred
Stock
The
Company is authorized to issue up to 1,000,000 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
On
February 20, 2007, the number of outstanding shares decreased from 828,125
shares to 625,000 shares as a result of a reverse split of the Company's common
stock.
On April
25, 2007, the number of outstanding shares was 3,125,000 after consummating the
initial public offering.
On May 2,
2007, the number of outstanding shares was 3,500,000 after exercising the
over-allotment option.
On May
19, 2009, the number of outstanding shares was decreased from 3,500,000 to
359,402 as a result of reverse split of 8 to 1 of the IPO shares, and as result
of returned cancellation of initial stockholders common stock.
Class
A, Common Stock
On
May 19, 2009, the number of outstanding shares was 3,125,000 after issuance of
Class A common stock to initial stockholders.
F-12
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
|
The
following discussion and analysis provides information that management believes
is relevant for an assessment and understanding of our results of operations and
financial condition. The following selected financial information is
derived from our historical financial statements and should be read in
conjunction with such financial statements and notes thereto set forth elsewhere
herein and the “Forward-Looking Statements” explanation included
herein. This information should also be read in conjunction with our
audited historical consolidated financial statements which are included in
our annual report on Form 10-K for the fiscal year ended December 31, 2009,
as amended by Form 10-K/A and filed with the Securities and Exchange
Commission (the “Commission”) on March 31, 2010 as amended on April 12,
2010 and Risk Factors contained in such annual report.
Overview
Pinpoint
Advance Corp. (the “Company”, “we”, or “us”) is a blank check company. We were
organized under the laws of the State of Delaware on September 6, 2006. We were
formed for the purpose of acquiring, merging with, engaging in a capital stock
exchange with, purchasing all or substantially all of the assets of, or engaging
in any other similar business combination with a business that has operations or
facilities located in Israel or which is a company operating outside of Israel,
specifically in Europe, which management believes would benefit from
establishing operations or facilities in Israel, preferably in the technology
sector. On May 18, 2009, our Second Amended and Restated Certificate
of Incorporation became effective with the State of Delaware, to (i) effectuate
the redemption of shares (“IPO Shares”) issued in the Company’s initial public
offering (“IPO”) for cash from the trust account in the amount per share of
$9.91 (the “Redemption”), and in connection with the Redemption, distribute to
holders of the IPO Shares one share of new common stock (“New Common Stock”) for
every eight IPO Shares redeemed; (ii) create a new class of common stock called
Class A Common Stock and exchange each share of common stock issued by the
Company prior to its IPO (“Founder Shares”) for five shares of Class A Common
Stock; and (iii) eliminate the blank check company restrictions by amending
Article THIRD and deleting Article SIXTH in its entirety to allow for the
continuation of our corporate existence.
On May
19, 2009, we completed the distribution of cash from our trust account in the
aggregate amount of $28,491,250 to holders of 2,875,000 IPO Shares, which IPO
Shares were redeemed and then cancelled, and in connection with the Redemption,
we issued an aggregate of 359,402 shares of New Common Stock. Holders
of the New Common Stock own approximately 10% of the Company’s aggregate
outstanding shares of common stock. Any units issued in the IPO were
split into their respective common stock and warrants, with the common stock
being redeemed as described above. The Company’s warrants remained
outstanding in accordance with the terms of the Warrant Agreement, dated April
19, 2007. The warrant shares were decreased in proportion to the
decrease in the Company’s outstanding shares of capital stock and the exercise
price was increased to $7.5336.
On May
19, 2009, we issued an aggregate of 3,125,000 shares of Class A Common Stock in
exchange for surrender and cancellation of 625,000 Founder
Shares. The Class A Common Stock has the same rights, preferences and
privileges as the New Common Stock. Holders of the New Common Stock and Class A
Common Stock will vote together as one class on all matters (including the
election of directors) submitted to a vote of the stockholders. Our
management has operated the Company since its formation and has over 100 years
of combined experience in operating public companies. Our management
has agreed not to accept compensation until consummation of a business
combination.
Business
All
activity from inception (September 6, 2006) through May 19, 2009 was related to
the Company’s formation and capital raising activities and seeking a suitable
business combination. Following the approval of our stockholders to
continue our existence at a meeting of stockholders held on May 15, 2009, our
objective is to achieve long-term growth potential through one or more
combinations with operating companies or businesses. We will not restrict
our search for potential candidates to companies engaged in any specific
business, industry or geographical location and, thus, may acquire any type of
business. We also will continue to pursue certain claims of the
Company against a third party, as described below.
On
October 27, 2008, the Company announced it had executed a letter of intent to
effectuate a Business Combination with a privately-held company with its
headquarters in Israel (the “LOI”). All parties to the LOI negotiated the terms
of a definitive agreement and in fact, a definitive agreement (the “Agreement”)
was executed by all parties to the LOI. However, one of the parties (the
“Objecting Party”) to the Agreement claimed it never released its signature
thereto and has since indicated that it no longer wished to pursue the proposed
business combination.
The
Company believes a binding, definitive agreement was executed by all
parties. However, because one of the parties had indicated its
position that no binding agreement existed and that it did not wish to continue
with negotiations, the Company determined to liquidate the Trust Account
established by the Company for the benefit of its public stockholders, and
return funds to the holders of shares of the Company’s common stock issued in
the Offering, in accordance with its Offering prospectus and the terms of its
amended and restated certificate of incorporation.
The
Company’s Amended and Restated Certificate of Incorporation provided for
mandatory liquidation of the Company in the event that the Company did not
consummate a business combination within 18 months from the date of the
consummation of its Offering, or 24 months from the consummation of the Offering
if certain extension criteria had been satisfied. In October 2008 the
Company announced its termination of a letter of intent for potential business
combinations plans as well as its plan to distribute the amount held in the
trust fund to its stockholders and to adopt a plan for continued corporate
existence.
At a
Special Meeting held on May 15, 2009, a majority of the Company’s stockholders
voted in favor of the proposal to remove the blank check company restrictions
from the Company’s charter, thereby allowing the Company to continue its
corporate existence.
In
accordance with stockholder approval of the Company’s proposals, on May 19, 2009
the Company effectuated the redemption (“Redemption”) of the shares of common
stock issued in the Offering in the amount of $9.91 per share from the Trust
Account, and distributed one share of new common stock (“New Common Stock”) for
every eight shares of Company common stock redeemed, for an aggregate of 359,402
shares of New Common Stock. The stockholders also approved the
creation of a new class of common stock called Class A Common Stock (“Class A
Stock”) and the Company’s founders exchanged each share of common stock held by
them for five shares of Class A Stock, for an aggregate of 3,125,000 shares of
Class A Stock.
On
December 8, 2009, the Company and others, filed a lawsuit against the Objecting
Party, Elbit Systems Holdings Ltd. ("Elbit") and others, in the Petah Tikva
District Court of Israel (“Court”), for damages in the amount of NIS 37.7
million (USD $10 million) (the "Lawsuit"). The Lawsuit is based on
the following factual background:
|
a.
|
That
following a period of extensive negotiations between inter alia, the
Company and Elbit, a July 2008 Letter of Intent was signed, which
contemplated inter alia, the Company purchase from Elbit of 31% of
Kinetics, Ltd., i.e. 18,716 Ordinary Shares of Kinetics Ltd. (the
"Kinetics Shares"), for a price of $26 million. Following said
purchase, a merger between the Company and Kinetics was to be
effectuated;
|
|
b.
|
That
the Company, as a blank check company and in order to fulfill its duty to
obtain timely shareholders' approval, was compelled to finalize a Business
Combination by October 18, 2008;
|
|
c.
|
That
based on the Letter of Intent, and a belief at the time of Elbit's good
faith, the Company continued negotiating a definitive agreement with all
parties involved in the
transaction;
|
|
d.
|
That
after lengthy negotiations, a definitive agreement was finalized and
signed in early October 2008;
|
|
e.
|
That
Elbit's signature on the definitive agreement was withheld based on
Elbit's claim that it had "just received" information about a new order
that would raise the forecast of Kinetics' profits in
2009;
|
The
Lawsuit seeks reparation for damages caused to plaintiffs as a result of
defendants' lack of good faith in negotiations, and requests that the Court hold
that defendants materially breached the definitive agreement, that defendants
are estopped from denying that the definitive agreement was finalized, and that
defendants acted with fraud, and alternatively, with recklessness. The Lawsuit
also alleges that Elbit was unjustly enriched by its conduct, and that any
enrichment as a result of Elbit's retention of the Kinetics Shares belongs to
the Company.
The
Lawsuit is in preliminary stages. Defendants have filed a Statement of Defense,
and pursuant to Court suggestion, the parties have submitted their dispute to
mediation, a process which has not yet begun. Therefore the Company cannot opine
on the likelihood of success at the present time.
The
analysis of new business opportunities has and will be undertaken by or under
the supervision of our officers and directors. We have unrestricted
flexibility in seeking, analyzing and participating in potential business
opportunities. In our efforts to analyze potential target companies or
businesses, we will consider, among others, the following factors:
(i)
|
Potential
for growth, indicated by new technology, anticipated market expansion or
new products;
|
|
(ii)
|
Competitive
position as compared to other firms of similar size and experience within
the relevant industry segment as well as within the industry as a
whole;
|
|
(iii)
|
Strength
and diversity of management, either in place or scheduled for
recruitment;
|
|
(iv)
|
Capital
requirements and anticipated availability of required funds, to be
provided by us or from operations, through the sale of additional
securities, through joint ventures or similar arrangements or from other
sources;
|
|
(v)
|
The
cost of participation by us as compared to the perceived tangible and
intangible values;
|
|
(vi)
|
The
extent to which the business opportunities can be
advanced;
|
|
(vii)
|
The
accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items;
and
|
|
(viii)
|
Other
relevant factors that we identify.
|
In
applying the foregoing criteria, no one of which will be controlling, management
will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data.
Potentially available business opportunities 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. Due to our limited capital we may not
discover or adequately evaluate adverse facts about any opportunity evaluated
or, ultimately, any transaction consummated.
Form
of Acquisition
The
manner in which we participate in an opportunity will depend upon the nature of
the opportunity, our respective needs and desires and the promoters of the
opportunity, and our relative negotiating strength and that of such
promoters.
In the
event the Company enters into a definitive agreement to acquire an operating
company, the acquisition may not require stockholder approval, even if it
constituted a change in control of the Company, provided the Company’s common
stock is not then listed on a national exchange and the acquisition is
structured so as not to require a stockholder vote under the Delaware code.
Accordingly, shareholders may not be entitled to vote on any future acquisitions
by the Company.
It is
likely that we will acquire our participation in a business opportunity through
the issuance of our common stock or other securities. Although the terms
of any such transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisition is a
so-called “tax free” reorganization under Section 368(a)(l) of the
Internal Revenue Code of 1986, as amended (the “Code”), depends upon whether the
owners of the acquired business own 80% or more of the voting stock of the
surviving entity. If a transaction were structured to take advantage of
these provisions rather than other “tax free” provisions provided under the
Code, our then-existing stockholders would, in such circumstances retain 20% or
less of the total issued and outstanding shares of the surviving entity.
Under other circumstances, depending upon the relative negotiating strength of
the parties, our then-existing stockholders may retain substantially less than
20% of the total issued and outstanding shares of the surviving entity.
This will result in substantial additional dilution to the equity of our
then-existing stockholders.
If we
were to pursue a “tax-free” reorganization as described above, our then-existing
stockholders would not have control of a majority of our voting shares following
a reorganization transaction. As part of such a transaction, all or a
majority of our directors may resign and new directors may be appointed without
any vote by our stockholders.
In the
case of an acquisition of stock or assets not involving a statutory merger or
consolidation directly involving us, the transaction may be accomplished upon
the sole determination of management without any vote or approval by our
stockholders. In the case of a statutory merger or consolidation directly
involving us, it will likely be necessary to call a stockholders’ meeting and
obtain the approval of the holders of a majority of our outstanding
shares. The necessity to obtain such stockholder approval may result in
delay and additional expense in the consummation of any proposed transaction and
will also give rise to certain appraisal rights to dissenting
stockholders. Most likely, management will seek to structure any such
transaction so that no stockholder approval is required.
It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial costs for third party professionals, accountants, attorneys and
others. If a decision is made not to participate in a specific business
opportunity, these costs theretofore incurred in the related investigation would
not be recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to consummate that
transaction may result in our loss of the related costs incurred.
We
presently have no employees apart from the officers named elsewhere
herein. Our officers and directors are engaged in outside business
activities and anticipate that they will devote very limited time to our
business until a business opportunity has been identified. We expect no
significant changes in the number of our employees other than such changes, if
any, incident to a business combination transaction.
Forward
Looking Statements
The
statements discussed in this report include forward looking statements that
involve risks and uncertainties detailed from time to time in our reports filed
with the Securities and Exchange Commission.
Liquidity
and Capital Resources
On May
19, 2009, we distributed $28,491,250 out of our trust account to holders of our
IPO Shares. As of March 31, 2010, we had approximately $2,123 of cash available
for general corporate purposes. Our balance sheet as of that date reflected
total liabilities of approximately $158,163. The board of directors anticipates
that the Company will need to raise capital to fund ongoing operations,
including the compliance cost of continuing to remain a public reporting
company, and to fund the acquisition of an operating business.
In
connection with our IPO, we were not required to pay the underwriters, Maxim
Group LLC the remaining three percent (3%) of the gross proceeds ($862,500) of
the initial public offering, as a result of the Company being unable to complete
a business combination within the allotted time. The 3% deferred fee was part of
the funds returned to our public stockholders from the trust account upon the
Redemption.
The
Company does not currently have any specific capital-raising plans. We may
receive funds from some or all of our officers or directors, and we may seek to
issue equity securities, including preferred securities for which we may
determine the rights and designations, common stock, warrants, equity rights,
convertibles notes and any combination of the foregoing. Any such offering may
take the form of a private placement, public offering, rights offering, other
offering or any combination of the foregoing at fixed or variable market prices
or discounts to prevailing market prices. We cannot assure you that we will be
able to raise sufficient capital on favorable, or any, terms. We believe the
issuance of equity securities in such a financing will not be subject to
stockholder approval if the Company’s common stock is not then listed on a
national exchange or traded on Nasdaq. Accordingly, you may not be entitled to
vote on any future financing by the Company. Moreover, stockholders have no
preemptive or other rights to acquire any securities that the Company may issue
in the future.
If the
Company is deemed to be a “blank check company” for the purposes of the federal
securities laws, regulatory restrictions that are more restrictive than those
currently set forth in the Company’s Second Amended and Restated Certificate of
Incorporation may apply to any future public offerings by the Company pursuant
to Rule 419 of the Securities Act of 1933, as amended.
Other
than contractual obligations incurred in the ordinary course of business, we do
not have any other long-term contractual obligations.
Results
of Operations
Net
income (loss) of ($19,616) and ($67,814) reported for the three months ended
March 31, 2010 and 2009 respectively, consists primarily of $19,580 of expenses
for administrative services and $36 for franchise taxes.
We
consummated our IPO of 2,500,000 Units on April 25, 2007 and consummated the
closing on the over-allotment option on May 2, 2007. Gross proceeds from the IPO
were $30,250,000 (including the over-allotment option and warrants sold
privately). We paid a total of $1,349,900 in underwriting discounts and
commissions, and approximately $449,000 was paid for costs and expenses related
to the IPO. After deducting the underwriting discounts and commissions and the
offering expenses, we deposited $28,491,250 of the net proceeds into the trust
account.
On May
19, 2009, we completed the distribution of cash from our trust account in the
aggregate amount of $28,491,250 to holders of 2,875,000 IPO Shares, which IPO
Shares were redeemed and then cancelled, and in connection with the Redemption,
we issued an aggregate of 359,402 shares of New Common Stock. Holders of the New
Common Stock own approximately 10% of the Company’s aggregate outstanding shares
of common stock. Any units issued in the IPO were split into their respective
common stock and warrants, with the common stock being redeemed as described
above. The Company’s warrants remained outstanding in accordance with the terms
of the Warrant Agreement, dated April 19, 2007. The warrant shares were
decreased in proportion to the decrease in the Company’s outstanding shares of
capital stock and the exercise price was increased to $7.5336.
On May
19, 2009, we issued an aggregate of 3,125,000 shares of Class A Common Stock in
exchange for surrender of 625,000 Founder Shares. The Class A Common Stock has
the same rights, preferences and privileges as the New Common Stock. Holders of
the New Common Stock and Class A Common Stock will vote together as one class on
all matters (including the election of directors) submitted to a vote of the
stockholders. Our management has operated the Company since its formation and
has over 100 years of combined experience in operating public companies. Our
management has agreed not to accept compensation until consummation of a
business combination. We currently have nominal assets and
operations.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The
information in this Item is not required to be disclosed by a smaller reporting
company.
ITEM
4T. CONTROLS AND PROCEDURES.
Evaluation
of Disclosure Controls and Procedures
Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), is recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include without limitation, controls and
procedures designed to ensure that information required to be disclosed in
company reports filed or submitted under the Exchange Act is accumulated and
communicated to management, including our chief executive officer and chief
financial officer, as appropriate to allow timely decisions regarding
disclosure.
As
required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, our chief
executive officer and chief financial officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2009. Based on their evaluation, they concluded
that our disclosure controls and procedures were effective.
Changes
in Internal Control over Financial Reporting
During
the most recently completed second quarter, there has been no change in our
internal control over financial reporting that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.
PART
II
OTHER
INFORMATION
Item
1 Legal Proceedings
On
December 8, 2009, the Company and others, filed a lawsuit against the Objecting
Party, Elbit Systems Holdings Ltd. ("Elbit") and others, in the Petah Tikva
District Court of Israel (“Court”), for damages in the amount of NIS 37.7
million (USD $10 million) (the "Lawsuit"). The Lawsuit is based on the following
factual background:
|
a.
|
That
following a period of extensive negotiations between inter alia, the
Company and Elbit, a July 2008 Letter of Intent was signed, which
contemplated inter alia, the Company purchase from Elbit of 31% of
Kinetics, Ltd., i.e. 18,716 Ordinary Shares of Kinetics Ltd. (the
"Kinetics Shares"), for a price of $26 million. Following said purchase, a
merger between the Company and Kinetics was to be
effectuated;
|
|
b.
|
That
the Company, as a blank check company and in order to fulfill its duty to
obtain timely shareholders' approval, was compelled to finalize a Business
Combination by October 18, 2008;
|
|
c.
|
That
based on the Letter of Intent, and a belief at the time of Elbit's good
faith, the Company continued negotiating a definitive agreement with all
parties involved in the
transaction;
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|
d.
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That
after lengthy negotiations, a definitive agreement was finalized and
signed in early October 2008;
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|
e.
|
That
Elbit's signature on the definitive agreement was withheld based on
Elbit's claim that it had "just received" information about a new order
that would raise the forecast of Kinetics' profits in
2009;
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The
Lawsuit seeks reparation for damages caused to plaintiffs as a result of
defendants' lack of good faith in negotiations, and requests that the Court hold
that defendants materially breached the definitive agreement, that defendants
are estopped from denying that the definitive agreement was finalized, and that
defendants acted with fraud, and alternatively, with recklessness. The Lawsuit
also alleges that Elbit was unjustly enriched by its conduct, and that any
enrichment as a result of Elbit's retention of the Kinetics Shares belongs to
the Company.
The
Lawsuit is in preliminary stages. Defendants have filed a Statement of Defense,
and pursuant to Court suggestion, the parties have submitted their dispute to
mediation, a process which has not yet begun. Therefore the Company cannot opine
on the likelihood of success at the present time.
Item
6. Exhibits
31.1
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Section
302 Certification of Principal Executive Officer
|
|
31.2
|
Section
302 Certification of Principal Financial Officer
|
|
32.1
|
Section
906 Certification of Principal Executive Officer
|
|
32.2
|
Section
906 Certification of Principal Financial
Officer
|
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PINPOINT ADVANCE
CORP.
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|
Dated:
May 17, 2010
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/s/ Adiv Baruch
|
Adiv
Baruch
President
and Chief Executive Officer
(Principal
executive officer)
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Dated:
May 17, 2010
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/s/ Ronen Zadok
|
Ronen
Zadok
Chief
Financial Officer and Secretary
(Principal
financial and accounting officer)
|