Attached files
file | filename |
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EX-23.1 - EX-23.1 - Chart Acquisition Corp. | d29610_ex23-1.htm |
EX-10.5 - EX-10.5 - Chart Acquisition Corp. | s1a6ex10v_chart.htm |
EX-3.2 - EX-3.2 - Chart Acquisition Corp. | s1a6ex3ii_chart.htm |
to
UNDER THE SECURITIES ACT OF 1933
Delaware |
6770 |
45-2853218 |
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(State or other
jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
New York, NY 10019
(212) 350-8205
(Address, including zip code, and telephone number, including
area code, of registrants principal executive offices)
President
c/o The Chart Group, LP
75 Rockefeller Plaza, 14th Floor
New York, NY 10019
(212) 350-8205
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Douglas S.
Ellenoff, Esq. Stuart Neuhauser, Esq. Ellenoff Grossman & Schole LLP 150 East 42nd Street New York, New York 10017 (212) 370-1300 (212) 370-7889 Facsimile |
Jack I. Kantrowitz, Esq. DLA Piper LLP (US) 1251 Avenue of the Americas New York, New York 10020-1104 (212) 335-4500 (212) 884-8645 Facsimile |
As soon as practicable after the effective date of the registration statement.
Large
accelerated filer o |
Accelerated filer o |
Non-accelerated filer [X] (Do not check if a smaller reporting company) |
Smaller reporting company o |
Title of Each Class of Securities to be Registered |
Amount to be Registered (1) |
Proposed Maximum Offering Price per Unit (1) |
Proposed Maximum Aggregate Offering Price (1) |
Amount of Registration Fee |
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Units, each
consisting of one share of Common Stock, $.0001 par value, and one Warrant (2)(4) |
8,625,000 | $ | 10.00 | $86,250,000 | $9,884.25 | |||||||||||||
Shares of
Common Stock included as part of the Units (2)(4) |
8,625,000 | | | | (3) | |||||||||||||
Warrants
included as part of the Units (2)(4) |
8,625,000 | | | | (3) | |||||||||||||
Total
|
$86,250,000 | $9,884.25 | (5) | |||||||||||||||
(1) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). |
(2) |
Includes 1,125,000 units, 1,125,000 shares of common stock and 1,125,000 warrants underlying such units, which may be issued on exercise of a 45-day option granted to the underwriters to cover overallotments, if any. |
(3) |
No fee pursuant to Rule 457(g). |
(4) |
Pursuant to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(5) |
$13,179 previously paid. |
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
|
Subject to Completion, Dated July 12, 2012 |
Per Unit |
Total |
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---|---|---|---|---|---|---|---|---|---|---|
Public
offering price |
$ | 10.00 | $75,000,000 | |||||||
Underwriting
discount(1) |
$ | 0.5875 | $4,406,250 | |||||||
Proceeds,
before expenses, to us |
$ | 9.4125 | $70,593,750 |
(1) |
Includes $0.3125 per unit, or approximately $2.34 million in the aggregate (approximately $2.7 million if the underwriters overallotment option is exercised in full), payable to the underwriters for deferred underwriting commissions to be placed in the trust account described below. Such funds will be released to the underwriters only on completion of an initial business combination, as described in this prospectus. See Underwriting beginning on page 127 and Conflicts of Interest beginning on page 131. |
Cowen and
Company |
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EarlyBirdCapital,
Inc. Mitsubishi
UFJ Securities |
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Experts
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131 | |||||
132 | ||||||
F-1 |
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references to we, us, company or our company refer to Chart Acquisition Corp.; |
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references to our sponsor refer to Chart Acquisition Group LLC, a Delaware limited liability company formed for the express purpose of acting as the sponsor of this offering. The members of our sponsor are The Chart Group, L.P., an affiliate of Christopher D. Brady, our president and director and Kendall Family Investments; |
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references to Cowen Overseas are to Cowen Overseas Investment LP, a Cayman Islands limited partnership and an affiliate of Cowen and Company, LLC, the representative of the underwriters of this offering; |
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references to founder shares are to 2,156,250 shares of our common stock sold by us to our sponsor, after giving effect to a 0.75-for-1 reverse split of our shares of common stock effectuated on July 10, 2012. Unless otherwise stated, all amounts in this prospectus have been restated to reflect the retroactive effect of the reverse stock split; |
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references to initial holders are to Joseph Wright, Cowen Overseas and our sponsor, each of whom is purchasing placement units in the private placement; |
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references to our initial stockholders refers to our sponsor, those of our officers and directors and certain affiliates of The Chart Group L.P., the managing member of our sponsor, that hold founder shares; |
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references to our management or our management team refer to our officers and certain of our directors; |
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references to our public shares are to shares of our common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); |
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references to public stockholders refer to the holders of our public shares, which may include our initial stockholders and members of our management team if and to the extent our initial stockholders and/or members of our management team purchase public shares, provided that any of our initial stockholders and a member of managements status as a public stockholder shall only exist with respect to such public shares; |
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references to private placement refers to the private placement of 305,000 placement units being purchased by our sponsor, 20,000 placement units being purchased by Joseph Wright and 150,000 placement units being purchased by Cowen Overseas, that will occur simultaneously with the consummation of this offering for a purchase price of $10.00 per placement unit for a total purchase price of $4,750,000; |
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references to placement units are to an aggregate of 475,000 units being purchased separately by the initial holders in the private placement, each placement unit consisting of one placement share and one placement warrant; |
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references to placement shares are to an aggregate of 475,000 shares of our common stock included within the placement units being purchased separately by our initial holders; and |
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references to placement warrants are to warrants to purchase an aggregate of 475,000 shares of our common stock included within the placement units being purchased separately by our initial holders in the private placement. |
opportunities, but we may decide to enter into a business combination with a target business that does not meet these criteria and guidelines.
|
Opportunities for Platform Growth: We will seek to acquire one or more businesses or assets that we can grow both organically and through acquisitions. Particularly in regard to the provision and/or outsourcing of government services, we may initially consider those sectors that complement our management teams background, such as information technology and analysis, communications, equipment manufacturing and assembling, advanced materials, electronic components, and imaging and sensors. |
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History of and Potential for Strong Free Cash Flow Generation: We will seek to acquire one or more businesses that have the potential to generate strong free cash flow (i.e., companies that typically generate cash in excess of that required to maintain or expand the businesss asset base ). We will focus on one or more businesses that have recurring revenue streams and low working capital and capital expenditure requirements. We may also seek to prudently leverage this cash flow in order to enhance stockholder value. |
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Established Companies with Proven Track Records: We will seek to acquire established companies, particularly those focused on industries connected to the provision and/or outsourcing of government services with sound historical financial performance. We will typically focus on companies with a history of strong operating and financial results. Although we are not restricted from doing so, we do not intend to acquire start-up companies. |
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Experienced and Motivated Management Teams: We will seek to acquire businesses that have strong, experienced management teams with a substantial personal economic stake in the performance of the acquired business. We will focus on management teams with a proven track record of driving revenue growth, enhancing profitability and generating strong free cash flow. We expect that the operating expertise of our officers and directors will complement, not replace the targets management team. |
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Strong Competitive Industry Position: We will seek to acquire businesses focused on the provision and/or outsourcing of government services industries that have strong fundamentals although we may acquire businesses in other industries. The factors we will consider include growth prospects, competitive dynamics, level of consolidation, need for capital investment and barriers to entry. We will focus on companies that have a leading or niche market position. We will analyze the strengths and weaknesses of target businesses relative to their competitors, focusing on product quality, customer loyalty, cost impediments associated with customers switching to competitors, intellectual property protection and brand positioning. We will seek to acquire one or more businesses that demonstrate advantages when compared to their competitors, which may help to protect their market position and profitability. |
also has corporate experience, including as chief executive officer of PanAmSat Corporation and chairman of Intelsat Ltd., providers of satellite/fiber services with global fleets providing services to international corporations and governments. Mr. Wright has additional industry experience through his role as chairman of GRC International, a public company providing advanced information technologies primarily to government customers. Mr. Wright is also an independent director of Cowen Group, Inc., the parent company of Cowen and Company, LLC, one of the lead underwriters in this offering. Our president, Christopher D. Brady, who is affiliated with The Chart Group L.P., a member of our sponsor, has over 25 years experience in private equity, venture capital, corporate finance and capital markets. Mr. Brady has had experience working on various government-related transactions, a focus of the business of The Chart Group L.P. Our chief financial officer, Michael LaBarbera, serves as managing director of Chart Group Advisors, an affiliate of The Chart Group L.P., and has over 25 years experience in arranging acquisition and growth capital financings for both private and public companies. Peter A. Cohen, one of our directors, is Chairman and Chief Executive Officer of Cowen Group, Inc. Mr. Cohen has over 40 years experience in the financial industry, including serving as Chairman and Chief Executive Officer of Shearson Lehman Brothers. Over his career he has served on a number of corporate, industry and philanthropic boards, including The New York Stock Exchange, The Federal Reserve International Capital Markets Advisory Committee, The Depository Trust Company, The Ohio State University Foundation, The New York City Opera, The American Express Company, GRC International, Olivetti SpA, Société Générale de Belgique, Telecom Italia SpA, Presidential Life Corporation, Kroll, Inc., and L-3 Communications. He is presently a Director of Mount Sinai Hospital, Safe Auto Insurance, and Scientific Games Corporation.
combination, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority, or FINRA, that such an initial business combination is fair to our stockholders from a financial point of view.
Securities
offered |
7,500,000 units, at $10.00 per unit, each unit consisting of: |
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one share of common stock; and |
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one warrant. |
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Proposed
NASDAQ Capital Market symbols |
Units: CACGU |
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Common Stock: CACG |
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Warrants: CACGW |
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Trading
commencement and separation of common stock and warrants |
We
anticipate the units will begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin
separate trading on the 52nd day following the date of this prospectus unless Cowen and Company, LLC informs us of its decision to allow
earlier separate trading, subject, in each case, to our having filed the Current Report on Form 8-K as described below and having issued a press
release announcing when such separate trading will begin. |
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Separate
trading of the common stock and warrants is prohibited until we have filed a Current Report on Form 8-K |
In no
event will our common stock and warrants be traded separately until we have filed a Current Report on Form 8-K with the SEC containing an audited
balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after
the closing of this offering, which is anticipated to take place three business days from the date of this prospectus. If the underwriters
overallotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will
be filed to provide updated financial information to reflect the exercise of the underwriters overallotment option. |
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Units: |
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Number of
placement units outstanding before this offering |
0 |
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Number of
placement units to be sold simultaneously with this offering |
475,000 |
Number of
units to be outstanding after this offering and the private placement |
7,975,000 |
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Common
stock: |
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Number
outstanding before this offering |
2,156,250 (1)(2) |
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Number
outstanding after this offering |
9,850,000 (2)(3) |
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Warrants: |
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Number of
warrants outstanding before this offering |
0 |
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Number of
warrants outstanding after this offering |
7,975,000 (3)(4) |
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Exercisability |
Each
warrant offered in this offering is exercisable to purchase one share of our common stock. |
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Exercise
price |
$11.50 per share, subject to adjustments as described herein. |
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Exercise
period |
The
warrants will become exercisable on the later of: |
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30 days after the consummation of our initial business combination, or |
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12 months from the closing of this offering; |
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provided that no warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of
common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock is available, and such shares are
registered, qualified or exempt from registration under the securities laws of |
(1) |
This number includes an aggregate of 281,250 founder shares (not including founder shares held by Messrs. Wright, Ridge, Kerrey, Teen and Medina) that are subject to forfeiture to the extent that the overallotment option is not exercised by the underwriters. |
(2) |
This number includes all founder shares in an aggregate amount equal to 20% of our issued and outstanding shares (excluding the placement shares) after this offering and the expiration of the underwriters overallotment option. A number of founder shares in an amount equal to 2.5% of our shares of common stock issued and outstanding after expiration of the underwriters overallotment option (excluding the placement shares) are subject to forfeiture on a pro-rata basis by our initial stockholders in the event the last sales price of our stock does not equal or exceed $11.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period within 60 months following the closing of our initial business combination. An additional number of founder shares in an amount equal to 2.5% of our shares of common stock issued and outstanding after expiration of the underwriters overallotment option (excluding the placement shares) will be subject to forfeiture on a pro-rata basis by our initial stockholders in the event the last sales price of our stock does not equal or exceed $13.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for at least one period of 20 trading days within any 30-trading day period within 60 months following the closing of our initial business combination. Our initial stockholders have agreed that, except as set forth herein, they will not sell or transfer any of their founder shares until the earlier of: (i) one year after the consummation of our initial business combination or earlier if, subsequent to our business combination, the last sales price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property and, to the extent applicable, have agreed that such shares will be subject to lockup and will not sell or transfer founder shares that remain subject to forfeiture as described above, until such time as the related forfeiture provisions no longer apply. |
(3) |
Assumes no exercise of the underwriters overallotment option and the resulting forfeiture of 281,250 founder shares as described in footnote (1) Our sponsor, Joseph Wright, our chief executive officer and chairman of the board, and Cowen Overseas have agreed to purchase, simultaneously with the consummation of this offering, an aggregate of 475,000 private placement units, each unit consisting of one placement share and one placement warrant. Our initial stockholders and Cowen Overseas will hold 22.3% and 1.5%, respectively of the outstanding common stock following this offering and the expiration of the underwriters overallotment option. The placement units are not subject to forfeiture but will be subject to transfer restrictions as described in Principal StockholdersTransfers of Founder Shares and Placement Units (including securities contained therein). |
(4) |
Includes 475,000 placement warrants included in the placement units. |
the
state of residence of the holder. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise
of the public warrants has not been declared effective by the 60th business day following the closing of our initial business combination,
warrantholders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an
effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of
1933, as amended, or the Securities Act. |
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We
are not registering the shares of common stock issuable upon exercise of the warrants at this time. However, we have agreed to use our best efforts to
file and have an effective registration statement covering the shares of common stock issuable upon exercise of the warrants, to maintain a current
prospectus relating to those shares of common stock until the earlier of the date the warrants expire or are redeemed and, the date on which all of the
warrants have been exercised and to qualify the resale of such shares under state blue sky laws, to the extent an exemption is not
available. |
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The
warrants will expire at 5:00 p.m., New York time, five years after the consummation of our initial business combination or earlier upon redemption or
liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust
account. |
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Redemption of
warrants |
Once
the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the placement
warrants): |
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in whole and not in part; |
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at a price of $0.01 per warrant; |
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upon a minimum of 30 days prior written notice of redemption, or the 30-day redemption period; and |
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if, and only if, the last sale price of our common stock equals or exceeds $17.50 per share for any 20 trading days within a
30 trading day period ending on the third business day before we send the notice of redemption to the warrant holders. |
We
will not redeem the warrants unless an effective registration statement covering the shares of common stock issuable upon exercise of the warrants is
effective and a current prospectus relating to those shares is available throughout the 30-day redemption period. |
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If we
call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so
on a cashless basis. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of
common stock equal to the quotient obtained by dividing: (x) the product of the number of shares of common stock underlying the warrants, multiplied by
the difference between the exercise price of the warrants and the fair market value (defined below) by (y) the fair market value. The
fair market value means the average reported last sale price of the common stock for the 10 trading days ending on the third trading day
prior to the date on which the notice of redemption is sent to the holders of warrants. |
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None
of the placement warrants will be redeemable by us so long as they are held by the initial holders, or their permitted transferees. |
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Founder
shares |
Our sponsor purchased an aggregate of 2,156,250 founder shares for an aggregate purchase price of $25,000, or approximately
$0.0116 per share. In January 2012, our sponsor transferred an aggregate of 337,500 founder shares to Joseph Wright, Governor Thomas
Ridge, Senator Joseph Robert Kerrey and Timothy N. Teen, each of whom is one of our officers and/or directors and an aggregate of 461,250 shares
to The Chart Group, L.P., the sole managing member of our sponsor. In January 2012, The Chart Group, L.P. transferred, an aggregate of 461,250
shares of our common stock to certain of our officers and certain affiliates and officers of The Chart Group, L.P. On April 17, 2012, our sponsor
transferred an aggregate of 37,500 founder shares to Manuel D. Medina, who joined our board of directors on March 15, 2012. |
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The
founder shares include an aggregate of 281,250 shares subject to forfeiture by certain of our initial stockholders to the extent that the
underwriters overallotment option is not exercised in full, so that our initial stockholders will own in the aggregate a number of shares equal
to 22.3% of our issued and outstanding shares of common stock after this offering (which includes 1,875,000 founder shares and 325,000
placement shares and assumes that our initial stockholders do not purchase any units in this offering |
and
they are not required to forfeit the founder earn out shares, as described in this prospectus). A number of founder shares in an amount equal to 2.5%
of our shares of common stock issued and outstanding after the expiration of the underwriters overallotment option (excluding the placement
shares) are subject to forfeiture by our initial stockholders in the event the last sales price of our common stock does not equal or exceed $11.50 per
share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading
day period within 60 months following the closing of our initial business combination. An additional number of founder shares in an amount equal to
2.5% of our shares of common stock issued and outstanding after the expiration of the underwriters overallotment option (excluding the placement
shares), will be subject to forfeiture by our initial stockholders in the event the last sales price of our stock does not equal or exceed $13.50 per
share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading
day period within 60 months following the closing of our initial business combination. None of the placement shares will be subject to
forfeiture. |
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The
founder shares are identical to the shares of common stock included in the units being sold in this offering, except that: |
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the founder shares are subject to certain transfer restrictions, as described in more detail below, and |
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our initial stockholders have agreed: (i) to waive their redemption rights with respect to their founder shares, placement
shares and public shares in connection with the consummation of a business combination and (ii) to waive their redemption rights with respect to their
founder shares and placement shares if we fail to consummate a business combination within 21 months from the date of this prospectus. However, our
initial stockholders will be entitled to redemption rights with respect to any public shares held by them if we fail to consummate a business
combination within such time period. |
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If we
submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares,
placement shares and any public shares purchased during or after the offering in favor of our initial business combination. |
Transfer
restrictions on founder shares |
Our
initial stockholders have agreed not to transfer, assign or sell any of its founder shares (except to permitted transferees, as described herein under
Principal StockholdersTransfers of Founder Shares and Placement Units (including securities contain therein) until: (i) one year
after the consummation of our initial business combination or earlier if, subsequent to our business combination, the last sales price of our common
stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20
trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (ii) the date on which we
consummate a liquidation, merger, stock exchange or other similar transaction after our initial business combination that results in all of our
stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described below under
Principal StockholdersTransfers of Founder Shares and Placement Units (including securities contained therein)) and to the extent
applicable, it will not sell or transfer founder shares that remain subject to forfeiture until such time as the related forfeiture provisions no
longer apply. |
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Placement
Units |
Our
sponsor has committed to purchase 305,000 placement units, Joseph Wright, our chief executive officer and chairman of the board, has committed to
purchase 20,000 placement units and Cowen Overseas Investment LP, an affiliate of Cowen and Company, LLC, the representative of the underwriters
of this offering, has committed to purchase 150,000 placement units, each consisting of one share of common stock and one warrant to purchase one share
of our common stock exercisable at $11.50, at a price of $10.00 per unit ($4.75 million in the aggregate) in a private placement that will occur
simultaneously with the closing of this offering. The purchase price of the placement units will be added to the proceeds from this offering to be held
in the trust account. If we do not complete a business combination within 21 months from the date of this prospectus, the proceeds from the sale of the
placement units held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and
the placement warrants will expire worthless. |
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Transfer
restrictions on placement units |
The
placement units and the component securities contained therein will not be transferable, assignable or salable until 30 days after the consummation of
our initial business combination and the placement warrants will be non-redeemable so long as they are held by the |
initial holders or their permitted transferees (except as described herein under Principal StockholdersTransfers of Founder Shares
and Placement Units (including securities contained therein); provided that Cowen Overseas will not in any event be permitted to sell any
placement units (including the component securities therein) prior to the date 180 days immediately following the completion of this offering. If the
placement units are held by someone other than the initial holders, or their respective permitted transferees, the placement warrants will be
redeemable by us and exercisable by such holders on the same basis as the warrants included in the units being sold in this offering. |
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Proceeds to be
held in trust account |
$75.75 million, or $10.10 per public share of the proceeds of this offering together with all the proceeds of the private
placement of the placement units (approximately $86.7 million, or approximately $10.05 per share, if the underwriters overallotment
option is exercised in full) will be placed in a segregated trust account with Continental Stock Transfer & Trust Company acting as trustee. These
proceeds include approximately $2.34 million (or approximately $2.7 million if the underwriters over-allotment option is exercised
in full) in deferred underwriting commissions. An increase in the size of the offering without an increase in the size of the private placement would
reduce the per-share amount payable to our public stockholders upon our liquidation or of our public stockholders exercise of their redemption
rights because the portion of the trust account attributable to the sale proceeds of the private placement will be allocated pro rata among a greater
number of public shares. Assuming a 20% increase in the size of this offering, the per-share redemption or liquidation amount could decrease by as much
as approximately $0.06. |
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We
may increase the initial amount held in the trust account from approximately $10.10 per public share prior to the effectiveness of the
registration statement of which this prospectus forms a part. In such case, we expect that the increase would be funded by an increase in the amount of
the deferral by the underwriters of the underwriting commissions payable in connection with this offering, an increase in the number of placement units
to be purchased by our initial holders or Cowen Overseas at $10.00 per unit and/or a reduction from $1,212,500 of the amount initially available
to us for working capital that is not held in the trust account. Public stockholders would own a smaller percentage of our outstanding
common |
stock
on a fully diluted basis to the extent that our initial holder, and/or Cowen Overseas purchases additional placement units. We do not intend to reduce
the initial amount to be held in the trust account. |
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Except for any interest income released to us for working capital purposes and to pay taxes or dissolution expenses, none of the funds
held in trust will be released from the trust account until the earlier of (i) the consummation of our initial business combination; (ii) the
expiration or termination of any tender offer conducted by us in connection with a proposed business combination not otherwise withdrawn; (iii) the
redemption of our public shares if we are unable to consummate a business combination within 21 months from the date of this prospectus, subject to
applicable law; or (iv) otherwise upon our liquidation or in the event our board of directors resolves to liquidate the trust account and ceases to
pursue the consummation of a business combination prior to the expiration of the 21 month period (our board of directors may determine to liquidate the
trust account prior to such expiration if it determines, in its business judgment, that it is improbable within the remaining time to identify an
attractive business combination or satisfy regulatory and other business and legal requirements to consummate a business combination). The proceeds
deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public
stockholders. |
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Anticipated
expenses and funding sources |
Unless and until we complete our initial business combination, no proceeds held in the trust account, other than the interest earned on the
trust account, will be available for our use. We may pay our expenses only from: |
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such interest; and |
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the net proceeds of this offering not held in the trust account, which will be $1,212,500 in working capital after
the payment of approximately $725,000 in expenses relating to this offering (not including underwriting discounts). |
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Conditions to
consummating our initial business combination |
There
is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Subject to the Nasdaq
requirement that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least
80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a
definitive |
agreement in connection with our initial business combination, our management will have virtually unrestricted flexibility in identifying and
selecting one or more prospective target businesses. We will consummate our initial business combination only if we (or any entity that is a successor
to us in a business combination) will acquire a majority of the outstanding voting securities or assets of the target with the objective of making sure
that we are not required to register as an investment company under the Investment Company Act, based on the fact that less than 40% of our assets will
be defined as investment securities under the provisions of that statute. Even though we (or our stockholders, if we are not the surviving corporation)
will own a majority interest in the target, our stockholders prior to the business combination may collectively own a minority interest in the post
business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could
pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a
target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of
common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock
subsequent to such transaction. |
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Permitted purchases of public shares by us or our affiliates |
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, we may enter into privately negotiated transactions to purchase public shares from stockholders
following consummation of the initial business combination with proceeds released to us from the trust account immediately following consummation of
the initial business combination. Our initial stockholders, directors, officers or their affiliates may also purchase shares in privately negotiated
transactions either prior to or following the consummation of our initial business combination. Neither we nor our directors, officers, advisors or
their affiliates will make any such purchases when we or they are in possession of any material nonpublic information not disclosed to the seller or
during a restricted period under Regulation M under the Exchange Act. Although neither we nor they currently anticipate paying any premium purchase
price for such public shares, in the event we or they do, the payment of a premium may not be in the best interest of those stockholders not receiving
any such |
additional consideration. In addition, the payment of a premium by us after the consummation of our initial business combination may not be in
the best interest of the remaining stockholders who do not redeem their shares, because such stockholders will experience a reduction in book value per
share compared to the value received by stockholders that have their shares purchased by us at a premium. Except for the limitations described above on
use of trust proceeds released to us prior to consummating our initial business combination, there is no limit on the number of shares that could be
acquired by us or our affiliates, or the price we or they may pay, if we hold a stockholder vote. |
||||||
Redemption
rights for public stockholders upon consummation of our initial business combination |
We
will provide our stockholders with the opportunity to redeem their shares of common stock upon the consummation of our initial business combination at
a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest
earned on the trust account, less any interest released to us for working capital purposes or the payment of taxes, divided by the number of then
outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately
$10.10 per public share (or approximately $10.05 per public share if the underwriters overallotment option is exercised in full).
There will be no redemption rights upon the consummation of our initial business combination with respect to our warrants. Our initial stockholders
have agreed to waive their redemption rights with respect to any public shares they may acquire in connection with, or following the consummation of,
this offering in connection with a tender offer or stockholder vote. Each of our initial stockholders and Cowen Overseas (as applicable) has agreed to
waive its redemption rights with respect to the founder shares and placement shares (i) in connection with the consummation of a business combination,
(ii) if we fail to consummate our initial business combination within 21 months from the date of this prospectus, (iii) in connection with an expired
or unwithdrawn tender offer, and (iv) upon our liquidation prior to the expiration of the 21 month period. |
|||||
Manner of
conducting redemptions |
Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business
combinations and related redemptions of public shares for cash upon consummation of such initial business combinations |
even
when a vote is not required by law or Nasdaq, if a stockholder vote is not required by law or Nasdaq and we do not decide to hold a stockholder vote
for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation: |
||||||
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers
and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of the proposed business
combination, and |
||||||
file tender offer documents with the SEC prior to consummating our initial business combination that contain substantially
the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the
Exchange Act, which regulates the solicitation of proxies. |
||||||
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem shall remain open for at least 20 business days, in accordance
with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to consummate our initial business combination until the expiration of the
tender offer period. |
||||||
If,
however, stockholder approval of the transaction is required by law or Nasdaq, or we decide to obtain stockholder approval for business or other
reasons, we will: |
||||||
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which
regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
||||||
file proxy materials with the SEC. |
||||||
If we
seek stockholder approval, we will consummate our initial business combination only if a majority of the outstanding shares of common stock voted are
voted in favor of the business combination. In such case, our initial stockholders have agreed to vote their founder shares, placement shares and any
public shares purchased during or after the offering in favor of our initial business combination. Additionally, each public stockholder may elect to
redeem their public shares irrespective of whether they vote for or against the proposed transaction for cash equal to their pro rata share of the
aggregate amount then on deposit in the trust account, including any amounts representing |
interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution
expenses, and subject to certain volume limitations described herein. |
||||||
Many
blank check companies would not be able to consummate a business combination if the holders of the companys public shares voted against a
proposed business combination and elected to redeem or convert more than a specified percentage of the shares sold in such companys initial
public offering, which percentage threshold has typically been between 19.99% and 39.99%. As a result, many blank check companies have been unable to
complete business combinations because the number of shares voted against the initial business combination by their public stockholders electing
conversion exceeded the maximum conversion threshold pursuant to which such company could proceed with a business combination. Since we have no
specified maximum percentage threshold for redemption in our amended and restated certificate of incorporation and since even those public stockholders
who vote in favor of our initial business combination have the right to redeem their public shares, our structure is different in this respect from the
structure that has been used by many blank check companies. This may make it easier for us to consummate our initial business combination. However, in
no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 and the terms of the
proposed business combination may require our net tangible assets to be greater than $5,000,001. For example, the proposed business combination may
require: (i) cash consideration to be paid to the target or members of its management team, (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the allocation of cash to satisfy other conditions in accordance with the terms of the proposed
business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly
tendered plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of
cash available to us, we will not consummate the business combination and any shares of common stock tendered pursuant to the tender offer will be
returned to the holders thereof following the expiration of the tender offer. Additionally, since we are required to maintain net tangible assets of at
least $5,000,001 (which may be substantially higher depending on the |
terms
of our potential business combination), the chance that the holders of our common stock electing to redeem in connection with a redemption conducted
pursuant to the proxy rules will cause us to fall below such minimum requirement is increased. |
||||||
Limitation on
redemption rights of stockholders holding 10% or more of the shares sold in the offering if we hold stockholder vote |
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct
redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation
provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert
or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an
aggregate of 10% of the shares sold in this offering. However, there is no restriction on our stockholders ability to vote all of their shares
for or against a business combination. |
|||||
We
believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders
to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the
then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 10% of the
shares sold in this offering could threaten to exercise its redemption rights if such holders shares are not purchased by us or our management at
a premium to the then-current market price or on other undesirable terms. By limiting our stockholders ability to redeem no more than 10% of the
shares sold in this offering, we believe we will limit the ability of a small number of stockholders to unreasonably attempt to block our ability to
consummate our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. |
||||||
Release of
funds in trust account on closing of our initial business combination |
On
the closing of our initial business combination, all amounts held in the trust account will be released to us. We will use these funds to pay amounts
due to any public stockholders who exercise their redemption rights as described above under Redemption rights for public stockholders upon
consummation of our initial business combination and to pay the underwriters their deferred underwriting discounts. Funds released from the trust
account to us can be used to pay all or a portion of the purchase price of the business or |
businesses we acquire in our initial business combination. If our initial business combination is paid for using stock or debt securities, or
not all of the funds released from the trust account are used for payment of the purchase price in connection with our business combination, we may
apply the cash released to us from the trust account that is not applied to the purchase price as described above and for general corporate purposes,
including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in
consummating the initial business combination, to fund the purchase of other companies or for working capital. |
||||||
Redemption of
public shares and distribution and liquidation if no initial business combination |
Our
initial stockholders, officers and directors have agreed that we will have only 21 months from the date of this prospectus to consummate our initial
business combination. If we have not consummated a business combination within 21 months from the date of this prospectus, or earlier, at the
discretion of our board pursuant to the expiration of a tender offer conducted in connection with a failed business combination, we will: (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem all
public shares then outstanding at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any
amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or
dissolution expenses (although we expect all or substantially all of such interest to be used for working capital purposes), divided by the number of
then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to
receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under
Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating
distributions with respect to our warrants, which will expire worthless if we fail to consummate our initial business combination within the 21 month
time period. |
Each
of our initial stockholders and Cowen Overseas (as applicable) has agreed to waive its redemption rights with respect to the founder shares and
placement shares (i) in connection with the consummation of a business combination, (ii) if we fail to consummate our initial business combination
within 21 months from the date of this prospectus, (iii) in connection with an expired or unwithdrawn tender offer, and (iv) upon our liquidation prior
to the expiration of the 21 month period. However, if our initial stockholders, Cowen Overseas or any of their respective officers, directors or
affiliates, should acquire public shares in or after this offering, they will be entitled to redemption rights with respect to such public shares if we
fail to consummate a business combination within the required time period. |
||||||
The
underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate a
business combination within 21 months from the date of this prospectus and, in such event, such amounts will be included with the funds held in the
trust account that will be available to fund the redemption of our public shares. |
||||||
Limited
payments to insiders |
There
will be no finders fees, reimbursements or cash payments made to our initial stockholders, officers, directors, or our or their affiliates for
services rendered to us prior to or in connection with the consummation of our initial business combination, other than: |
|||||
Repayment of $175,000 in loans made to us by our sponsor to cover offering-related and organizational
expenses; |
||||||
A payment of an aggregate of $10,000 per month to The Chart Group L.P., an affiliate of our sponsor, for office space,
secretarial and administrative services; |
||||||
Reimbursement for any out-of-pocket expenses related to identifying, investigating and consummating an initial business
combination, provided that no proceeds of this offering held in the trust account may be applied to the payment of such expenses prior to the
consummation of a business combination; and |
||||||
Repayment of incremental loans made by our sponsor or an affiliate of our sponsor or certain of our officers and directors
to finance transaction costs in connection with an intended initial business combination, provided that if we do not consummate an initial business
combination, we may use a portion of the working capital held |
outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. The terms of
such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such
loans. |
||||||
Our
independent directors will approve all payments in excess of $5,000 to be made to our initial stockholders, officers, directors or our or their
affiliates. |
||||||
Audit
Committee |
We
have established and will maintain an audit committee which will be composed of independent directors and, within one year, will be composed of at
least three independent directors to, among other things, monitor compliance with the terms described above and the other terms relating to this
offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary
to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information see the section entitled
ManagementCommittees of the Board of DirectorsAudit Committee. |
As of June 30, 2012 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
As Adjusted |
||||||||||
Balance
Sheet Data: |
|||||||||||
Working
capital (deficiency) |
$(137,014 | ) | $74,640,708 | ||||||||
Total
assets |
211,958 | 76,984,458 | |||||||||
Total
liabilities |
190,000 | 2,343,750 | |||||||||
Value of
common stock that may be redeemed in connection with our initial business combination (approximately $10.10 per share) |
| 69,640,706 | |||||||||
Stockholders equity(1) |
21,958 | 5,000,002 |
(1) |
Excludes shares subject to redemption in connection with our initial business combination. |
business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our business combination.
may trade at a discount to the pro rata amount in our trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate.
provisions, our ability to close a contemplated transaction could be impaired. Furthermore, if we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
take legal action against Messrs. Wright and Brady to enforce their indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against Messrs. Wright and Brady to enforce their indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.10 per share (or approximately $10.05 if the underwriters overallotment option is not exercised in full).
|
restrictions on the nature of our investments; and |
|
restrictions on the issuance of securities, |
|
registration as an investment company; |
|
adoption of a specific form of corporate structure; and |
|
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
initial business combination within 21 months from the date of this prospectus is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.
time commencing upon the date that such shares are released from transfer restrictions (as discussed herein under Principal StockholdersTransfers of Founder Shares and Placement Units (including securities contained therein)). We will bear the cost of registering these securities. If such persons exercise their registration rights in full, there will be an additional 2,775,000 shares of common stock (assuming no exercise of the underwriters overallotment option) and up to 475,000 shares of common stock issuable on exercise of the placement warrants eligible for trading in the public market. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our common stock that is expected when the securities owned by our initial stockholders and Cowen Overseas are registered.
these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law or Nasdaq, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.10 per share (or approximately $10.05 per share if the underwriters overallotment option is exercised in full) on our redemption, and our warrants will expire worthless.
|
may significantly dilute the equity interest of investors in this offering; |
|
may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
|
could cause a change in control if a substantial number of shares of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
|
may adversely affect prevailing market prices for our units, common stock and/or warrants. |
complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If such business combination is not consummated, these purchases would have the effect of reducing the funds available in the trust account for future business combinations. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.10 per share (or approximately $10.05 per share if the underwriters overallotment option is exercised in full) on our redemption, and our warrants will expire worthless.
combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
directorships or other responsibilities may give rise to contractual or fiduciary obligations that take priority over any obligation owed to us.
Selection of a target business and structuring of our initial business combination and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm regarding the fairness to our stockholders from a financial point of view of a business combination with our initial stockholders or an affiliate of our initial stockholders, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest. Additionally, were we successful in consummating such a transaction with our initial stockholders or an affiliate of our initial stockholders, conflicts could invariably arise from our initial stockholders, or an affiliate of our initial stockholders interest in maximizing returns to its members or limited partners, which may be at odds with the strategy of the post-business combination company or not in the best interests of the public stockholders of the post-business combination company. Any or all of such conflicts could materially reduce the value of your investment, whether before or after our initial business combination.
|
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
|
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
|
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
|
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
|
our inability to pay dividends on our common stock; |
|
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
|
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
|
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
|
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
|
solely dependent upon the performance of a single business, property or asset, or |
|
dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
|
rules and regulations or currency conversion or corporate withholding taxes on individuals; |
|
tariffs and trade barriers; |
|
regulations related to customs and import/export matters; |
|
longer payment cycles; |
|
tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
|
currency fluctuations and exchange controls; |
|
challenges in collecting accounts receivable; |
|
cultural and language differences; |
|
employment regulations; |
|
crime, strikes, riots, civil disturbances, terrorist attacks and wars; and |
|
deterioration of political relations with the United States. |
the target, with the objective of making sure that we are not required to register as an investment company under the Investment Company Act based on the fact that less than 40% of our assets will be defined as investment securities under the provisions of that statute. Even though we will own a majority interest in the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and to us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the companys stock than we initially acquired. Accordingly, this may make it more likely that we will not be able to maintain our control of the target business.
industry focus. We cannot assure you that we will not seek to amend our charter or governing instruments in order to effectuate our initial business combination.
purchase any units in this offering. Our sponsor has committed to purchase 305,000 placement shares and Joseph Wright has committed to purchase 20,000 placement shares contained within the placement units, in a private placement that will occur simultaneously with the consummation of this offering. Accordingly, our initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation. If our initial stockholders purchase units in this offering or if we or our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial stockholders nor, to our knowledge, any of our officers or directors, has any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our common stock. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, in which case all of the current directors will continue in office at least until the consummation of the business combination. If there is an annual meeting, as a consequence of our staggered board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of its ownership position, will have considerable influence regarding the outcome. Accordingly, you should anticipate that our initial stockholders will continue to exert control at least until the consummation of our initial business combination.
common stock equals or exceeds $17.50 per share for any 20 trading days within a 30 trading-day period ending on the third business day prior to the date we send proper notice of such redemption, provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the warrants, we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you: (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants.
underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the common stock and warrants underlying the units, include:
|
the history and prospects of companies whose principal business is the acquisition of other companies; |
|
prior offerings of those companies; |
|
our prospects for acquiring an operating business at attractive values; |
|
a review of debt to equity ratios in leveraged transactions; |
|
our capital structure; |
|
an assessment of our management and their experience in identifying operating companies; |
|
general conditions of the securities markets at the time of this offering; and |
|
other factors as were deemed relevant. |
|
a limited availability of market quotations for our securities; |
|
reduced liquidity for our securities; |
|
a determination that our common stock is a penny stock which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
|
a limited amount of news and analyst coverage; and |
|
a decreased ability to issue additional securities or obtain additional financing in the future. |
making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of managements time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.
|
enhance products and services; |
|
anticipate changing customer requirements by designing, developing, and launching new products and services that address the increasingly sophisticated and varied needs of customers; |
|
respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis; and |
|
respond to changing regulatory requirements in a cost effective and timely manner. |
which the markets for our products or services develop. If the market for our products or services decreases, remains constant or grows more slowly than we anticipate, there could be a material adverse effect on our financial condition and results of operations.
|
changes in budgets and purchasing priorities; |
|
a reduced need to upgrade existing systems; |
|
deferrals in anticipation of enhancements or new products; |
|
introduction of products by competitors; and |
|
lower prices offered by competitors. |
material adverse effect on the competitive position and business of our target business. Depending on the target business that we acquire, we may be required to protect trademarks, patents, and domain names in an increasing number of jurisdictions, a process that is expensive and may not be successful in every location. With respect to certain proprietary rights, such as trademarks and copyrighted materials, of the target business that we will acquire, the target business may have entered into license agreements in the past and may continue to enter into such agreements in the future. These licensees may take actions that diminish the value of such target businesss proprietary rights or cause harm to such target businesss reputation.
|
changes in fiscal policies or decreases in available government funding; |
|
changes in government programs or applicable requirements; |
|
changes in the presidential administration or composition of Congress; |
|
the adoption of new laws or regulations or changes to existing laws and regulations; |
|
changes in political or social attitudes with respect to homeland security or defense issues; and |
|
potential delays or changes in the government appropriations process. |
including the purchasing, property, estimating, compensation and management information systems of our target business. Any costs found to be improperly allocated to a specific contract will not be reimbursed and any such costs already reimbursed must be refunded. Moreover, if any of the administrative processes and systems are found not to comply with requirements, our target business may be subjected to increased government oversight and approval that could delay or otherwise adversely affect its ability to compete for or perform contracts. Therefore, an unfavorable outcome to a government audit could cause the actual results of our target business to differ materially from those anticipated. If an investigation uncovers improper or illegal activities, our target business may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeitures of profits, suspension of payments, fines and suspension or debarment from doing business with the government. In addition, our target business could suffer serious harm to its reputation if allegations of impropriety were made against it. Each of these results could cause the actual results of our target business to differ materially from those anticipated.
|
bids may be made on programs before the completion of their design, which may result in unforeseen difficulties and cost overruns; |
|
substantial cost and managerial time and effort to prepare bids may be expended on proposals for contracts that may not be won; |
|
it may be difficult to estimate accurately the resources and cost structure that will be required to service any contract won; and |
|
expense and delay may be incurred if competitors protest or challenge awards of contracts to our target business in competitive bidding, and any such protest or challenge could result in the resubmission of bids on modified specifications, or in the termination, reduction, or modification of the awarded contract. |
the Department of Homeland Security and the Department of Defense), which comprehensively regulate the formation, administration and performance of federal government contracts, and to the Truth-in-Negotiations Act, which requires certification and disclosure of cost and pricing data in connection with contract negotiations. In addition, our target business or parties with which it does business may be subject to industrial security regulations of the Department of Defense and other federal agencies that are designed to safeguard against foreigners access to classified information. Our target business may also be liable for systems and services failures and security breaks with respect to the solutions, services, products, or other applications it sells to the government. If our target business was to come under foreign ownership, control or influence, its federal government customers could terminate or decide not to renew their contracts, which could impair the ability of our target business to obtain new contracts. The government may reform its procurement practices or adopt new contracting rules and regulations, including cost-accounting standards, that could be costly to satisfy or that could impair the ability of our target business to obtain new contracts.
our target business cannot obtain the required security clearances for its employees working on a particular contract, our target business may not derive the revenue anticipated from the contract, which, if not replaced with revenue from other contracts, could seriously harm its financial condition and results of operations.
|
our ability to complete our initial business combination; |
|
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
|
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements; |
|
our potential ability to obtain additional financing to complete our initial business combination; |
|
our pool of prospective target businesses; |
|
failure to maintain the listing on, or the delisting of our securities from, Nasdaq or an inability to have our securities listed on Nasdaq or another national securities exchange following our initial business combination; |
|
the ability of our officers and directors to generate a number of potential investment opportunities; |
|
our public securities potential liquidity and trading; |
|
the lack of a market for our securities; |
|
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or |
|
our financial performance following this offering. |
forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading Risk Factors. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Without Overallotment Option |
Overallotment Option Exercised in Full |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Gross
proceeds |
||||||||||
Proceeds from
units offered to the public(1) |
$75,000,000 | $86,250,000 | ||||||||
Proceeds from
private placement |
4,750,000 | 4,750,000 | ||||||||
Total gross
proceeds |
$79,750,000 | $91,000,000 | ||||||||
Estimated
offering expenses(2) |
||||||||||
Underwriting
commissions (2.750% of gross proceeds from units offered to public, excluding deferred portion)(3) |
$2,062,500 | $2,371,875 | ||||||||
Legal fees
and expenses |
250,000 | 250,000 | ||||||||
Printing and
engraving expenses |
40,000 | 40,000 | ||||||||
Accounting
fees and expenses |
45,000 | 45,000 | ||||||||
SEC
fees |
13,179 | 13,179 | ||||||||
FINRA
fees |
12,000 | 12,000 | ||||||||
Nasdaq
Capital Market Listing Fees |
75,000 | 75,000 | ||||||||
Travel and
roadshow |
30,000 | 30,000 | ||||||||
Directors and
officers insurance |
250,000 | 250,000 | ||||||||
Miscellaneous
expenses |
9,821 | 9,821 | ||||||||
Total
offering expenses |
$2,787,500 | $3,096,875 | ||||||||
Proceeds
after offering expenses |
$76,962,500 | $87,903,125 | ||||||||
Held in trust
account |
75,750,000 | 86,690,625 | ||||||||
% of
public offering proceeds held in trust(4) |
101 | % | 100.5 | % | ||||||
Not held in
trust account |
$1,212,500 | $1,212,500 |
Amount |
Percentage |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Use of net
proceeds not held in trust and approximate amounts available from interest income earned on the trust
account(5)(6) |
||||||||||
Due diligence
(excluding accounting and legal due diligence) of prospective target(s) |
$289,375 | 21.2 | % | |||||||
Legal and
accounting expenses attendant to the due diligence investigations, structuring and negotiations of an initial business combination |
595,625 | 43.7 | % | |||||||
Legal and
accounting fees relating to SEC reporting obligations |
150,000 | 11 | % | |||||||
Administrative services and support payable to an affiliate of our sponsor (up to $10,000 per month for up to 21 months) |
210,000 | 15.4 | % | |||||||
Reserve for
liquidation expenses |
30,000 | 2.2 | % | |||||||
Nasdaq
continued listing fees |
48,125 | 3.5 | % | |||||||
Other
miscellaneous expenses |
39,375 | 2.9 | % | |||||||
Total |
$1,362,500 | 100.0 | % |
(1) |
Includes amounts payable to public stockholders who properly redeem their shares in connection with the consummation of our initial business combination. |
(2) |
In addition, a portion of the offering expenses have been prepaid from the proceeds of $175,000 of a loan from our sponsor, as described in this prospectus. This loan will be repaid upon consummation of this offering out of the $725,000 of the proceeds of this offering devoted to the expenses of this offering not included in the trust account. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses. |
(3) |
The underwriters have agreed to defer approximately $2.34 million of their underwriting commissions (or approximately $2.7 million if the underwriters overallotment option is exercised in full), which equals 3.125% of the gross proceeds from the units offered to the public, until consummation of initial business combination. Upon consummation of our initial business combination, approximately $2.34 million, which constitutes the underwriters deferred commissions (or approximately $2.7 million if the underwriters overallotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account, and the remaining funds will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. |
(4) |
All of the proceeds of the private placement and a portion of proceeds of the offering (being $72,212,500 of the gross proceeds from this offering, including approximately $2.34 million (or $83,153,125 of the proceeds of the offering including deferred underwriting commissions of approximately $2.7 million, if the underwriters overallotment option is exercised in full) of deferred underwriting commissions, will be placed in a trust account with Continental Stock Transfer & Trust Company. |
(5) |
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount of interest available to us from the trust account may be less than expected as a result of the current interest rate environment. Based on the current interest rate environment, we would expect approximately $150,000 (after payment of taxes owed on such interest income) to be available to us from interest earned on the funds held in the trust account; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.20% per annum based upon current yields of securities in which the trust account may be invested. |
(6) |
Includes estimated amounts that may also be used in connection with our initial business combination to fund a no shop provision (a provision designed to keep target businesses from shopping around for transactions with other companies on terms more favorable to such target businesses) and commitment fees for financing. |
Investment Company Act. Except for any interest income released to us for working capital purposes or the payment of taxes or dissolution expenses, none of the funds held in the trust account will be released, subject to the requirements of law, until the earlier of (i) the consummation of our initial business combination; (ii) the expiration or termination of any tender offer conducted by us in connection with a proposed business combination not otherwise withdrawn; (iii) the redemption of our public shares if we are unable to consummate a business combination within 21 months from the date of this prospectus, subject to applicable law; or (iv) otherwise upon our liquidation or in the event our board of directors resolves to liquidate the trust account and ceases to pursue the consummation of a business combination prior to the expiration of the 21 month period (our board of directors may determine to liquidate the trust account prior to such expiration if it determines, in its business judgment, that it is improbable within the remaining time to identify an attractive business combination or satisfy regulatory and other business and legal requirements to consummate a business combination).
and secretarial support. This arrangement is being agreed to by The Chart Group L.P. for our benefit and is not intended to provide The Chart Group L.P. compensation in lieu of salary or other remuneration. We believe that such fees are at least as favorable as we could have obtained from an unaffiliated person. Upon consummation of our initial business combination or our liquidation, we will cease paying these monthly fees.
Public
offering price |
$ | 10.00 | ||||||||
Net tangible
book value before this offering |
$(0.06 | ) | ||||||||
Increase
attributable to new investors |
1.75 | |||||||||
Pro forma net
tangible book value after this offering |
1.69 | |||||||||
Dilution to
new investors |
$8.31 |
Total shares(1) |
Total consideration |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number |
% |
Amount |
% |
Average price per share(1) |
||||||||||||||||||
Initial
stockholders (founder shares) |
1,875,000 | 19 | % | $ | 25,000 | 0 | % | $ | .01 | |||||||||||||
Placement
shares |
475,000 | 5 %(2 | ) | 4,750,000 | 6 | % | $ | 10.00 | ||||||||||||||
Public
stockholders |
7,500,000 | 76 | % | 75,000,000 | 94 | % | $ | 10.00 | ||||||||||||||
Total |
9,850,000 | 100 | % | $79,775,000 | 100 | % |
(1) |
Assumes no exercise of the underwriters overallotment option and corresponding forfeiture of 281,250 founder shares by certain of our initial stockholders as a result thereof. |
(2) |
Assumes no value is attributed to the placement warrants contained in the placement units. |
Numerator: |
||||||
Net tangible
book value before this offering |
$(137,014 | ) | ||||
Net proceeds
from this offering and sale of placement units |
76,962,500 | |||||
Offering
costs incurred in advance that are reflected to derive at net proceeds from this offering and sale of placement units and excluded from net tangible
book value before this offering |
158,972 | |||||
Less:
Deferred underwriting commission |
(2,343,750 | ) | ||||
Less:
Proceeds held in the trust account which may be redeemed for cash |
(69,640,706 | ) | ||||
$ | 5,000,002 | (2) | ||||
Denominator: |
||||||
Shares of
common stock outstanding prior to this offering(1) |
2,156,250 | |||||
Shares of
common stock included in the units offered |
7,500,000 | |||||
Placement
units issued |
475,000 | |||||
Less: Shares
subject to forfeiture assuming no over allotment option exercised |
(281,250 | ) | ||||
Less: Shares
subject to redemption to maintain net tangible assets of $5,000,001(2) |
(6,895,119 | ) | ||||
$2,954,881 |
(1) |
Assumes no exercise of the underwriters overallotment option and that 281,250 initial shares of common stock have been forfeited by certain of our initial stockholders as a result thereof. |
(2) |
Represents proceeds held in the trust account which may be redeemed for cash in a maximum amount that ensures that total equity does not fall below $5,000,001. Computed as follows: $69,640,706 (assuming the redemption threshold is $5,000,001) divided by redemption value per share ($10.10); redemption value per share is computed as follows: Proceeds held in the trust account ($75,750,000) divided by total public shares (7,500,000). |
June 30, 2012 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
As Adjusted(1) |
||||||||||
Deferred
underwriting commissions |
$ | | $2,343,750 | ||||||||
Notes payable
to affiliate(2) |
175,000 | | |||||||||
Common stock,
subject to redemption(3) |
| 69,640,70 6 | |||||||||
Stockholders equity (deficit): |
|||||||||||
Preferred
stock, $0.0001 par value, 1,000,000 shares authorized; none issued or outstanding |
| | |||||||||
Common stock,
$0.0001 par value, 29,000,000 shares authorized; 2,156,250 shares issued and outstanding; 9,850,000 shares issued and outstanding,
as adjusted (includes 6,895,119 shares subject to redemption) (5) |
216 | 985 (4 | ) | ||||||||
Additional
paid-in capital |
24,784 | 5,002,059 | |||||||||
Deficit
accumulated during the development stage |
(3,042 | ) | (3,042 | ) | |||||||
Total
stockholders equity |
21,958 | 5,000,002 | |||||||||
Total
capitalization |
$196,958 | $76,984,458 |
(1) |
Includes the $4.75 million we will receive from the sale of the placement units. |
(2) |
Notes payable to affiliate is a promissory note issued in the amount of $175,000 to our sponsor. The note is non-interest bearing and is payable on the earlier of September 30, 2012 or the consummation of this offering. |
(3) |
Upon the consummation of our initial business combination, we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes or the payment of taxes, subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 and any limitations (including but not limited to cash requirements) created by the terms of the proposed business combination. Each of our initial stockholders and Cowen Overseas (as applicable) has agreed with respect to the founder shares and the placement shares contained within the placement units to waive their respective redemption rights (i) in connection with the consummation of our initial business combination, (ii) if we fail to consummate our initial business combination within 21 months from the date of this prospectus, (iii) in connection with an expired or unwithdrawn tender offer, and (iv) upon our liquidation prior to the expiration of the 21 month period. |
(4) |
Assumes the overallotment option has not been exercised and a corresponding forfeiture of an aggregate of 281,250 founder shares held by certain of our initial stockholders, but no forfeiture of the founder earn out shares. |
(5) |
As adjusted, amount reflects our authorized common stock pursuant to our amended and restated certificate of incorporation to be filed on or prior to the date of this prospectus. |
|
may significantly dilute the equity interest of investors in this offering; |
|
may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
|
could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
|
may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights or a person seeking to obtain control of us; and |
|
may adversely affect prevailing market prices for our common stock and/or warrants. |
|
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
|
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
|
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
|
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
|
our inability to pay dividends on our common stock; |
|
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
|
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
|
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
|
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to consummate our initial business combination will be successful.
our working capital requirements. Should this amount be insufficient, our sponsor or an affiliate of our sponsor may fund our additional working capital requirements or finance transaction costs, as necessary. However, such parties are under no obligation to do so. We will use these funds, including any loans from our sponsor or an affiliate of our sponsor, to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and consummate a business combination. We will depend in part on interest being earned on the proceeds held in the trust account to provide us with additional working capital we may need to identify one or more target businesses and to complete our initial business combination, as well as to pay any franchise and income taxes that we may owe.
debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. In the current economic environment, it has become especially difficult to obtain acquisition financing. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
|
staffing for financial, accounting and external reporting areas, including segregation of duties; |
|
reconciliation of accounts; |
|
proper recording of expenses and liabilities in the period to which they relate; |
|
evidence of internal review and approval of accounting transactions; |
|
documentation of processes, assumptions and conclusions underlying significant estimates; and |
|
documentation of accounting policies and procedures. |
transferred, an aggregate of 461,250 shares of our common stock to certain of our officers and certain affiliates and officers of The Chart Group, L.P. On April 17, 2012, our sponsor transferred an aggregate of 37,500 founder shares to Manuel D. Medina, who joined our board of directors on March 15, 2012.
under the Securities Act. These holders are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective (i) in the case of the founder shares, upon the earlier of (A) one year after the consummation of our initial business combination or earlier if, subsequent to our business combination, the last sales price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination; provided that, to the extent any founder shares remain subject to forfeiture, such lock-up period will be automatically extended until such founder shares are no longer subject to forfeiture, or (B) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property and (ii) in the case of the placement shares and placement warrants and the respective common stock underlying such warrants, 30 days after the consummation of our initial business combination. We will bear the costs and expenses of filing any such registration statements.
businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into a business combination with a target business that does not meet these criteria and guidelines.
|
Opportunities for Platform Growth: We will seek to acquire one or more businesses or assets that we can grow both organically and through acquisitions. Particularly in regard to the provision and/or outsourcing of government services, we may initially consider those sectors that complement our management teams background, such as information technology and analysis, communications, equipment manufacturing and assembling, advanced materials, electronic components, and imaging and sensors. |
|
History of and Potential for Strong Free Cash Flow Generation: We will seek to acquire one or more businesses that have the potential to generate strong free cash flow (i.e. companies that typically generate cash in excess of that required to maintain or expand the businesss asset base). We will focus on one or more businesses that have recurring revenue streams and low working capital and capital expenditure requirements. We may also seek to prudently leverage this cash flow in order to enhance stockholder value. |
|
Established Companies with Proven Track Records: We will seek to acquire established companies particularly those focused on industries connected to the provision and/or outsourcing of government services industries with sound historical financial performance. We will typically focus on companies with a history of strong operating and financial results. Although we are not restricted from doing so, we do not intend to acquire start-up companies. |
|
Experienced and Motivated Management Teams: We will seek to acquire businesses that have strong, experienced management teams with a substantial personal economic stake in the performance of the acquired business. We will focus on management teams with a proven track record of driving revenue growth, enhancing profitability and generating strong free cash flow. We expect that the operating expertise of our officers and directors will complement, not replace the targets management team. |
|
Strong Competitive Industry Position: We will seek to acquire businesses focused on the provision and/or outsourcing of government services industries that have strong fundamentals although we may acquire businesses in other industries. The factors we will consider include growth prospects, competitive dynamics, level of consolidation, need for capital investment and barriers to entry. We will focus on companies that have a leading or niche market position. We will analyze the strengths and weaknesses of target businesses relative to their competitors, focusing on product quality, customer loyalty, cost impediments associated with customers switching to competitors, intellectual property protection and brand positioning. We will seek to acquire one or more businesses that demonstrate advantages when compared to their competitors, which may help to protect their market position and profitability. |
Intelsat Ltd., providers of satellite/fiber services with global fleets providing services to international corporations and governments. Mr. Wright has additional industry experience through his role as chairman of GRC International, a public company providing advanced information technologies primarily to government customers, and is a senior advisor to The Chart Group L.P., a member of our sponsor. Our president, Christopher D. Brady, who is affiliated with The Chart Group L.P., has over 25 years experience in private equity, venture capital, corporate finance and capital markets. Mr. Brady has had experience working on various government-related transactions, a focus of the business of The Chart Group L.P. Our chief financial officer, Michael LaBarbera, serves as managing director of Chart Group Advisors, an affiliate of The Chart Group L.P. and has experience in arranging acquisition and growth capital financings for both private and public companies in a variety of sectors, including on behalf of companies that provide services to government entities. Peter A. Cohen is Chairman and Chief Executive Officer of Cowen Group, Inc., the parent company of Cowen and Company, LLC, one of the lead underwriters in this offering. Mr. Cohen has over 40 years experience in the finance industry, including serving as Chairman and Chief Executive Officer of Shearson Lehman Brothers. Over his career he has served on a number of corporate, industry and philanthropic boards, including The New York Stock Exchange, The Federal Reserve International Capital Markets Advisory Committee, The Depository Trust Company, The Ohio State University Foundation, The New York City Opera, The American Express Company, GRC International, Olivetti SpA, Société Générale de Belgique, Telecom Italia SpA, Presidential Life Corporation, Kroll, Inc., and L-3 Communications. He is presently a Director of Mount Sinai Hospital, Safe Auto Insurance, and Scientific Games Corporation. However, the experience of our management, including Mr. Wrights experience at PanAmSat, is not a guarantee that we will be able to consummate a successful initial business combination.
acquire established companies that have demonstrated sound historical financial performance. Although we are not restricted from doing so, we do not intend to acquire start-up companies. In the event we did acquire such a company, we would be subject to the numerous risks inherent in such companies and business, which we would disclose in the tender offer or proxy materials.
leveraged buyout funds, management buyout funds, brokers and other members of the financial community and corporate executives. These target candidates may present solicited or unsolicited proposals. We expect such sources to become aware that we are seeking a business combination candidate by a variety of means, including publicly available information relating to this offering, public relations and marketing efforts or direct contact by management following the completion of this offering.
definitive agreement in connection with our initial business combination, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations. However, if our securities are not listed on Nasdaq or another securities exchange, we will no longer be required to consummate a business combination with a target whose fair market value equals to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on the income earned on the trust account). In any case, we will consummate our initial business combination only if we (or any entity that is a successor to us in a business combination) will acquire a majority of the outstanding voting securities or assets of the target with the objective of making sure that we are not required to register as an investment company under the Investment Company Act based on the fact that less than 40% of our assets will be defined as investment securities under the provisions of that statute. There is no basis for investors in this offering to evaluate the possible merits or risks of any target business with which we may ultimately complete a business combination. We will seek to acquire established companies that have demonstrated sound historical financial performance. Although we are not restricted from doing so, we do not intend to acquire start-up companies. To the extent we effect a business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
|
subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and |
|
cause us to depend on the marketing and sale of a single product or limited number of products or services. |
following a business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to a business combination. Moreover, we cannot assure you that members of our management team will have experience or knowledge relating to the operations of the particular target business.
Type of Transaction |
Whether Stockholder Approval is Required |
|||||
---|---|---|---|---|---|---|
Purchase of
assets |
No | |||||
Purchase of
stock of target not involving a merger with the company |
No | |||||
Merger of
target into a subsidiary of the company |
No | |||||
Merger of the
company with a target |
Yes |
|
the funds in our trust account that are so used will not be available to us after the business combination; |
|
the public float of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to obtain the continued listing of our securities on Nasdaq or another national securities exchange in connection with our initial business combination; |
|
because the stockholders who sell their shares in a privately negotiated transaction may receive a per share purchase price payable from the trust account that is not reduced by a pro rata share of the deferred underwriting commissions or franchise or income taxes payable, our remaining stockholders may bear the entire payment of such deferred commissions and franchise or income taxes payable. That is, if we seek stockholder approval of our initial business combination, the redemption price per share payable to public stockholders who elect to have their shares redeemed will be reduced by a larger percentage of the franchise or income taxes payable than it would have been in the absence of such privately negotiated transactions, and stockholders who do not elect to have their shares redeemed and remain our stockholders after the business combination will bear the economic burden of the deferred commissions and franchise or income taxes payable because such amounts will be payable by us; and |
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the payment of any premium would result in a reduction in book value per share for the remaining stockholders compared to the value received by stockholders that have their shares purchased by us at a premium. |
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of the proposed business combination, and |
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file tender offer documents with the SEC prior to consummating our initial business combination that will contain substantially the same financial and other information about the initial business |
combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
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file proxy materials with the SEC. |
companies have been unable to complete business combinations because the number of shares voted, against their initial business combination by their public stockholders electing conversion exceeded the maximum conversion threshold pursuant to which such company could proceed with a business combination. Since we have no such specified maximum redemption threshold and since even those public stockholders who vote in favor of our initial business combination will have the right to redeem their public shares, our structure is different in this respect from the structure that has been used by many blank check companies. This may make it easier for us to consummate our initial business combination. However, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Furthermore, the redemption threshold may be further limited by the terms and conditions of our initial business combination. In such case, we would not proceed with the redemption of our public shares and the related business combination, and instead may search for an alternate business combination.
distribute proxy materials for the stockholders vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him to deliver his certificate to verify ownership. As a result, the stockholder then had an option window after the consummation of the business combination during which he could monitor the price of the companys stock in the market. If the price rose above the redemption price, he could sell his shares in the open market before actually delivering his shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become option rights surviving past the consummation of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holders election to redeem is irrevocable once the business combination is approved.
business combination within the allotted month time period. We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,212,500 of proceeds held outside the trust account and interest income on the balance of the trust account (net franchise and income taxes payable) that will be released to us to fund our working capital requirements, although we cannot assure you that there will be sufficient funds for such purpose.
no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against Messrs. Wright and Brady to enforce their indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against Messrs. Wright and Brady to enforce their indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.10 per public share (or approximately $10.05 per public share if the underwriters overallotment option is exercised in full).
possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 21st month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Redemptions in Connection with our Initial Business Combination |
Other Permitted Purchases of Public Shares by us or our Affiliates |
Redemptions if we fail to Consummate an Initial Business Combination |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Calculation of
redemption price |
Redemptions at
the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will
be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders
may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be
approximately $10.10 per public share, or approximately $10.05 per public share if the underwriters overallotment option is
exercised in full), including any amounts representing interest earned on the trust account, less any interest released to us for working capital
purposes or the payment of taxes, divided by the number of then outstanding public shares; subject to the limitation that no redemptions will take
place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash
requirements) agreed to in connection with the negotiation of terms of a proposed business combination. |
If we seek
stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the
tender offer rules, we may enter into privately negotiated transactions to purchase public shares from stockholders following consummation of the
initial business combination with proceeds released to us from the trust account immediately following consummation of the initial business
combination. There is no limit to the prices that we or our initial stockholders, directors, officers or their affiliates may pay in these
transactions. |
If we are unable
to consummate an initial business combination within 21 months from the date of this prospectus, we will redeem all public shares at a per-share price,
payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be approximately $10.10
per public share, or approximately $10.05 per public share if the underwriters overallotment option is exercised in full), including any
amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or
dissolution expenses divided by the number of then outstanding public shares. |
Redemptions in Connection with our Initial Business Combination |
Other Permitted Purchases of Public Shares by us or our Affiliates |
Redemptions if we fail to Consummate an Initial Business Combination | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Impact to
remaining stockholders |
The redemptions
in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of
the deferred underwriting commissions and franchise and income taxes payable. |
If we seek
stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the
tender offer rules, we may enter into privately negotiated transactions to purchase public shares from stockholders following consummation of the
initial business combination. If the permitted purchases described above are made at prices not exceeding the per-share amount then held in the trust
account, these purchases will reduce the book value per share for our remaining stockholders following a business combination, who will bear the burden
of the deferred underwriting commissions and franchise and income taxes payable. If we make these purchases using funds released to us from the trust
account following consummation of a business combination at prices that are at a premium to the per-share amount then held in the trust account, our
remaining stockholders will also experience a reduction in book value per share to the extent of such premiums. |
The redemption of
our public shares if we fail to consummate a business combination will reduce the book value per share for the shares held by our initial stockholders,
who will be our only remaining stockholders after such redemptions. |
Terms of Our Offering |
Terms Under a Rule 419 Offering |
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Escrow of
offering proceeds |
Approximately
$75.75 million of the net offering proceeds, which includes a portion of the $4.75 million net proceeds from the sale of 305,000 placement units
to the sponsor, 20,000 to Joseph Wright and 150,000 placement units to Cowen Overseas and approximately $2.34 million in deferred underwriting
commissions (approximately $2.7 million if the underwriters overallotment option is exercised in full), will be deposited into a trust
account with Continental Stock Transfer & Trust Company acting as trustee. |
Approximately
$72.4 million of the offering proceeds, representing the gross proceeds of this offering, would be required to be deposited into either an
escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as
trustee for persons having the beneficial interests in the account. |
||||||||
Investment of
net proceeds |
Approximately
$75.75 million of the net offering proceeds, which includes a portion of the $4.75 million net proceeds from the sale of 305,000 placement units
to the sponsor, 20,000 placement units to Joseph Wright and 150,000 placement units to Cowen Overseas and approximately $2.34 million in
deferred underwriting commissions (approximately $2.7 million if the underwriters overallotment option is exercised in full) held in trust
will be invested only in United States government treasury bills with a maturity of 180 days or less or in money market funds investing solely in
United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. |
Proceeds could be
invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct
obligations of, or obligations guaranteed as to principal or interest by, the United States. |
||||||||
Receipt of
interest on escrowed funds |
We will be
entitled to withdraw interest income earned on the funds in the escrow account for working capital purposes, the payment of taxes or dissolution
expenses. Our stockholders will have no right to receive any pro-rata portion of interest income earned on the proceeds held in the trust account
released to us. |
Interest on funds
in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection
with our consummation of a business combination. |
Terms of Our Offering |
Terms Under a Rule 419 Offering | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Trading of
securities issued |
The units will
begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading on the
52nd day following the date of this prospectus unless Cowen and Company, LLC informs us of its decision to allow earlier
separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such
separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take
place three business days from the date of this prospectus. If the overallotment option is exercised following the initial filing of such Current
Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of
the overallotment option. |
No trading of the
units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities
would be held in the escrow or trust account. |
||||||||
Exercise of
the warrants |
The warrants
cannot be exercised until the later of 30 days after the consummation of our initial business combination or 12 months from the closing of this
offering. |
The warrants
could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be
deposited in the escrow or trust account. |
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Election to
remain an investor |
We will provide
our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on
deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working
capital purposes, the payment of taxes or dissolution expenses, upon the consummation of our initial business combination, subject to the limitations
described herein and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a
proposed business combination. We may not be required by law or Nasdaq to hold a stockholder vote. If we are not required by law or Nasdaq and do not
otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions
pursuant to the tender offer |
A prospectus
containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the
opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective
date of a post-effective amendment to the companys registration statement, to decide if he, she or it elects to remain a stockholder of the
company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th
business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. Unless a
sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none
of the securities are issued. |
Terms of Our Offering |
Terms Under a Rule 419 Offering | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
rules of the SEC
and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business
combination and the redemption rights as is required under the SECs proxy rules. If, however, we hold a stockholder vote, we will, like many
blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer
rules. If we seek stockholder approval, we will consummate our initial business combination only if a majority of the outstanding shares of common
stock voted are voted in favor of the business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective
of whether they vote for or against the proposed transaction for cash equal to their pro rata share of the aggregate amount then on deposit in the
trust account, including interest but less interest withdrawn for working capital purposes, to pay taxes or dissolution costs. In addition, our initial
stockholders have agreed to waive their redemption rights with respect to their founder shares, placement shares and public shares in connection with
the consummation of our initial business combination. Our initial stockholders and Cowen Overseas have each agreed to waive their redemption rights
with respect to its placement shares in connection with the consummation of our initial business combination and if we fail to consummate our initial
business combination within 21 months from date of this prospectus. |
||||||||||
Business
combination deadline |
If we are unable
to complete a business combination within 21 months from date of this prospectus, we shall: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less
any interest released to us for working capital purposes, the payment of taxes or dissolution expenses, divided by the number of then outstanding
public |
If an acquisition
has not been consummated within 18 months after the effective date of the companys registration statement, funds held in the trust or escrow
account are returned to investors. |
Terms of Our Offering |
Terms Under a Rule 419 Offering |
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shares, which
redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidation
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide
for claims of creditors and the requirements of other applicable law. |
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Release of
funds |
Except for
interest income earned on the trust account balance that is released to us, none of the funds held in trust will be released from the trust
account until the earlier of (i) the consummation of our initial business combination; (ii) the expiration or termination of any tender offer conducted
by us in connection with a proposed business combination not otherwise withdrawn; (iii) the redemption of our public shares if we are unable to
consummate a business combination within 21 months from the date of this prospectus, subject to applicable law; or (iv) otherwise upon our liquidation
or in the event our board of directors resolves to liquidate the trust account and ceases to pursue the consummation of a business combination prior to
the expiration of the 21 month period. |
The proceeds held
in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination
within the allotted time. |
Terms of Our Offering |
Terms of Many Blank Check Offerings |
Impact on Whether a Particular Business Combination is Completed |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Requirement to
conduct a tender offer or hold a stockholder vote |
We will provide
our stockholders with the opportunity to redeem their shares of common stock upon the consummation of our initial business combination on the terms
described in this prospectus. We intend to conduct these redemptions pursuant to the tender offer rules without filing a proxy statement with the SEC
and without conducting a stockholder vote to approve our initial business combination, unless stockholder approval is required by law or Nasdaq or we
decide to seek stockholder approval for business or other reasons. |
Many blank check
companies are required to file a proxy statement with the SEC and hold a stockholder vote to approve their initial business combination regardless of
whether such a vote is required by law. These blank check companies may not consummate a business combination if the majority of the companys
public shares voted are voted against a proposed business combination. |
Our ability to
consummate our initial business combination without conducting a stockholder vote in the event that a stockholder vote is not required by law or Nasdaq
may increase the likelihood that we will be able to complete our initial business combination and decrease the ability of public stockholders to affect
whether or not a particular business combination is completed. |
Terms of Our Offering |
Terms of Many Blank Check Offerings |
Impact on Whether a Particular Business Combination is Completed | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Requirement to
vote against a business combination in order to redeem |
If we seek
stockholder approval in conjunction with the consummation of our initial business combination, each public stockholder may elect to redeem their public
shares irrespective of whether they vote for or against the proposed transaction for cash equal to their pro rata share of the aggregate amount then on
deposit in the trust account, including interest but less interest withdrawn for working capital purposes, to pay taxes or dissolution costs. In
addition, our initial stockholders have agreed to waive their redemption rights with respect to their founder shares, placement shares and public
shares in connection with the consummation of our initial business combination and if we fail to consummate our initial business combination within 21
months from the date of this prospectus. Cowen Overseas has agreed to waive its redemption rights with respect to the placement shares contained within
the placement units (i) in connection with the consummation of our initial business combination and (ii) if we fail to consummate our initial business
combination within 21 months from the date of this prospectus. |
Many blank check
companies require public stockholders to vote against the proposed business combination in order to redeem their shares. |
The ability of
our public stockholders to vote in favor of a business combination and redeem their shares may increase the likelihood that we will be able to complete
our initial business combination and decrease the ability of public stockholders to affect whether or not a particular business combination is
completed. |
Terms of Our Offering |
Terms of Many Blank Check Offerings |
Impact on Whether a Particular Business Combination is Completed | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Limited
Redemption of 10% Public Stockholders |
If we seek
stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the
tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such
stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange
Act), will be restricted from redeeming its shares with respect to more than an aggregate of 10% of the shares sold in this offering. |
Many blank check
companies limit the redemption rights and voting rights of 10% public stockholders. |
We believe this
restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to
redeem as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other
undesirable terms. |
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Redemption
threshold |
We do not have a
specified maximum redemption threshold apart from the limitation that we will not redeem our public shares in an amount that would cause our net
tangible assets to be less than $5,000,001. Furthermore, the redemption threshold may be further limited by the terms and conditions of our initial
business combination. In such case, we would not proceed with the redemption of our public shares and the related business combination, and instead may
search for an alternate business combination. |
Many blank check
companies are not permitted to consummate a business combination if more than a specified percentage of the shares sold in such companys initial
public offering, which percentage threshold has typically been between 19.99% and 39.99%, elect to redeem or convert their shares in connection with
the stockholder vote. |
The absence of a
redemption threshold in our offering will make it easier for us to consummate our initial business combination even if a substantial majority of our
stockholders do not agree. |
|||||||||||
Accelerated
deadline to complete business combination |
We will only have
21 months from the date of this prospectus to complete our initial business combination. |
Many blank check
companies have between 24 and 36 months to complete their initial business combinations. |
The 21 month
deadline for us to complete our initial business combination may decrease the likelihood that we will be able to complete our initial business
combination compared to many blank check companies but should not impact the ability of our public stockholders to affect whether or not a particular
business combination is completed. |
Terms of Our Offering |
Terms of Many Blank Check Offerings |
Impact on Whether a Particular Business Combination is Completed | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Minimum fair
market value of target |
Our initial
business combination must be with one or more target businesses having an aggregate fair market value equal to at least 80% of the value of the trust
account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in
connection with such initial business combination. However, if our securities are not listed on Nasdaq or another securities exchange, we will no
longer be required to consummate a business combination with a target whose fair market value equals to at least 80% of the balance in the trust
account (less any deferred underwriting commissions and taxes payable on the income earned on the trust account). |
Many blank check
companies are not required to consummate their initial business combination with a target whose fair market value is equal to at least 80% of the
amount of money held in the trust account of the blank check company at the time of entry into a definitive agreement for a business
combination. |
The requirement
of a minimum fair market value requirement in our offering if we are listed on Nasdaq at the time we intend to consummate an initial business
combination may decrease the likelihood that we will be able to complete our initial business combination but should not impact the ability of our
public stockholders to affect whether or not a particular business combination is completed. |
Terms of Our Offering |
Terms of Many Blank Check Offerings |
Impact on Whether a Particular Business Combination is Completed | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Warrant
terms |
The warrants
issued in this offering (i) have an exercise price that is above the initial public offering price of our units and that is subject to reduction in the
event that we pay extraordinary dividends, (ii) do not expire until five years from the closing of our initial business combination or earlier upon
redemption or liquidation, (iii) require the consent of holders of 65% of the public warrants to amend their terms and (iv) may be exercised on a
cashless basis pursuant to Section 3(a)(9) of the Securities Act, if a registration statement covering the shares of common stock issuable upon
exercise of the public warrants has not been declared effective by the 60th business day following the closing of our initial business
combination, and until such time as there is an effective registration statement (subject to compliance with state blue sky laws). |
The warrants
issued in many blank check offerings (i) have an exercise price that is lower than the initial public offering price of their units and that is not
subject to reduction in the event that they pay extraordinary dividends, (ii) expire five years from the closing of the companys initial public
offering or earlier upon redemption or liquidation, (iii) only require the consent of holders of a majority of the such warrants to amend their terms
and (iv) are not exercisable unless a registration statement covering shares underlying the warrants is effective within 60 days following the initial
business combination (subject to compliance with state blue sky laws). |
The differences
in the terms of the warrants issued in our offering may increase the likelihood that we will be able to complete our initial business combination to
the extent that potential targets view the fact that the exercise price is above the initial public offering price of our units favorably but should
not impact the ability of our public stockholders to affect whether or not a particular business combination is completed. |
Name |
Age |
Title |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Joseph R.
Wright |
72 | Chairman and Chief Executive Officer |
||||||||
Christopher D.
Brady |
56 | President and Director |
||||||||
Michael
LaBarbera |
62 | Chief
Financial Officer, Secretary |
||||||||
Peter A.
Cohen |
65 | Director |
||||||||
Governor
Thomas Ridge |
66 | Director |
||||||||
Senator Joseph
Robert Bob Kerrey |
68 | Director |
||||||||
Timothy N.
Teen |
48 | Director |
||||||||
Manuel D.
Medina |
60 | Director |
Columbia University Graduate School of Business. In addition, Mr. Brady is well qualified to serve on our board of directors due to his background in private equity, corporate finance and capital markets, with a focus on identifying and building portfolio companies.
22 agencies employing more than 180,000 employees. Governor Ridge has been a director of Exelon Corporation since May 2005, a director of The Hershey Co. since November 2007, a director of Brightpoint Inc. since September 2009 and a director of Geospatial Holdings, Inc. since April 2010. He was formerly a director of Vonage from August 2005 to April 2010 and Home Depot, Inc. from May 2005 to May 2007. Governor Ridge holds a bachelors degree, cum laude, from Harvard University and a Juris Doctor degree from The Dickinson School of Law of The Pennsylvania State University. Governor Ridges background and substantial government experience have prepared him well for membership on our Board of Directors. Governor Ridge also brings significant corporate governance experience and compliance oversight expertise by virtue of his prior and on-going directorships.
it will be up to the directors of the post-combination business to determine executive and director compensation.
|
reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K; |
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discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
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discussing with management major risk assessment and risk management policies; |
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monitoring the independence of the independent auditor; |
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verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
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reviewing and approving all related-party transactions; |
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inquiring and discussing with management our compliance with applicable laws and regulations; |
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pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; |
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appointing or replacing the independent auditor; |
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determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and |
|
approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
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the corporation could financially undertake the opportunity; |
|
the opportunity is within the corporations line of business; and |
|
it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
subsidiaries. Mr. Cohen also has fiduciary duties to Scientific Games Corporation. If Mr. Cohen becomes aware of a potential business that may be suitable for our initial business combination, that falls within the line of business of any entity to which he has a pre-existing fiduciary duty, he may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us or, in the case of any future non-compete obligation, possibly prohibited from referring such opportunity to us. Other than the foregoing, none of our officers or directors currently has fiduciary duties that may take priority over their duties to us.
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None of our officers and directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. |
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In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our managements other affiliations, see Directors and Executive Officers. |
|
Our sponsor purchased an aggregate of 2,156,250 founder shares for an aggregate purchase price of $25,000, or approximately $0.0116 per share. In January 2012, our sponsor transferred an aggregate of 337,500 founder shares to Joseph Wright, Governor Thomas Ridge, Senator Joseph Robert Kerrey and Timothy N. Teen, each of whom is one of our officers and/or directors and an aggregate of 461,250 shares to The Chart Group, L.P., the sole managing member of our sponsor. In January 2012, The Chart Group, L.P. transferred an aggregate of 461,250 shares of our common stock to certain of our officers and certain affiliates and officers of The Chart Group, L.P. On April 17, 2012, our sponsor transferred an aggregate of 37,500 founder shares to Manuel D. Medina, who joined our board of directors on March 15, 2012. Our sponsor, Joseph Wright and Cowen Overseas have each committed to purchase an aggregate of 475,000 placement units, at the price of $10.00 per unit, in a private placement that will occur simultaneously with the closing of this offering. Each of holders of the founder shares and placement shares have agreed that such shares will be subject to lock-up and will not sell or transfer such shares until the applicable forfeiture provisions no longer apply. Our initial stockholders and Cowen Overseas (as applicable), have each agreed to waive their respective redemption rights with respect to the founder shares and placement shares (i) in connection with the consummation of our initial business combination, (ii) if we fail to consummate our initial business combination within 21 months from the date of this prospectus, (iii) in connection with an expired or unwithdrawn tender offer, and (iv) upon our liquidation prior to the expiration of the 21 month period. To the extent our initial stockholders transfer any of these securities to certain permitted transferees, such permitted transferees will agree, as a condition to such transfer, to waive these same redemption rights. If we do not complete our initial business combination within such 21 month time period, the proceeds of the sale of the placement units will be used to fund the redemption of our public shares, and the placement warrants will expire worthless. With certain limited exceptions (as described in more detail below under Principal Stockholders Transfers of Founder Shares and Placement Units |
(including securities contained therein)), the founder shares, placement units and their underlying securities will not be transferable, assignable or salable (i) in the case of the founder shares, by our initial stockholders until the earlier of (A) one year after the consummation of our initial business combination or earlier if, subsequent to our business combination, the last sales price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (B) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) in the case of the placement units and the component securities therein, by our sponsor, Joseph Wright and Cowen Overseas until 30 days after the consummation of our initial business combination. In addition, Cowen Overseas is an affiliate of Cowen and Company, LLC, one of the lead underwriters in this offering, which will receive deferred underwriting compensation only if we complete our business combination. |
|
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. |
violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.
|
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
|
each of our officers, directors and director nominees that beneficially owns shares of our common stock; and |
|
all our officers and directors as a group. |
Prior to the Offering(2) |
After the Offering(2)(3) |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and Address of Beneficial Owners(1) |
Amount and nature of beneficial ownership |
Percentage of outstanding common stock |
Amount and nature of beneficial ownership |
Percentage of outstanding common stock |
|||||||||||||||
Chart
Acquisition Group LLC |
1,625,000 | (4) | 61.8 | % | 1,055,000 | 10.7 | % | ||||||||||||
The Chart
Group L.P. |
1,625,000 | (4) | 61.8 | % | 1,055,000 | 10.7 | |||||||||||||
Joseph
Wright |
245,000 | (5) | 9.3 | % | 245,000 | 2.5 | |||||||||||||
Christopher
D. Brady |
1,733,750 | (4) | 65.9 | % | 1,148,750 | 11.7 | |||||||||||||
Michael
LaBarbera |
86,250 | 3.3 | % | 75,000 | * |
||||||||||||||
Governor
Thomas Ridge |
37,500 | (6) | 1.4 | % | 37,500 | * |
|||||||||||||
Senator
Joseph Robert Kerrey |
37,500 | (6) | 1.4 | % | 37,500 | * |
|||||||||||||
Timothy N.
Teen |
37,500 | (6) | 1.4 | % | 37,500 | * |
|||||||||||||
Peter A.
Cohen |
150,000 | (7) | 5.4 | % | 150,000 | 1.5 | |||||||||||||
Manuel D.
Medina |
37,500 | (6) | 1.4 | % | 37,500 | * |
|||||||||||||
Cowen
Overseas Investment LP |
150,000 | (7) | 5.7 | % | 150,000 | 1.5 | |||||||||||||
Kendall
Family Investments |
1,165,000 | (8) | 44.3 | % | 1,025,000 | 10.4 | |||||||||||||
All
directors and officers as a group (8 persons) |
2,177,500 | 82.8 | % | 1,523,750 | 15.5 | % |
* |
Less than 1 percent. |
1 |
Unless otherwise noted, the business address of each of the persons and entities listed above is 75 Rockefeller Plaza, 14th Floor, New York, NY 10019. |
2 |
Includes 2,156,250 founder shares and assumes the sale of 475,000 placement units subject to subscription agreements in a private placement to be completed simultaneously with this offering. |
3 |
Assumes the underwriters overallotment option has not been exercised and as a result, an aggregate of 281,250 founder shares held by certain of our initial stockholders (other than Messrs. Wright, Ridge, Kerrey, Teen and Medina) have been forfeited. Includes a number of founder shares equal to 2.5% of our shares of common stock issued and outstanding after the consummation of this offering (excluding the placement shares) which will be subject to forfeiture on a pro-rata basis by our initial stockholders in the event the last sales price of our stock does not equal or exceed $11.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period within 60 months following the closing of our initial business combination. An additional number of founder shares equal to 2.5% of our shares of common stock issued and outstanding after the consummation of this offering (excluding the placement shares) which will be subject to forfeiture on a pro-rata basis by our initial stockholders in the event the last sales price of our common stock does not equal or exceed $13.50 per share (as adjusted for stock splits, stock dividends, |
reorganizations, recapitalizations and the like) for at least one period of 20 trading days within any 30-trading day period within 60 months following the closing of our initial business combination. |
4 |
Chart Acquisition Group LLC, a Delaware limited liability company, our sponsor, is the holder of 1,625,000 shares composed of 1,320,000 founder shares and 305,000 placement shares. The Chart Group L.P., through its membership interest in the sponsor, is the indirect holder of 429,375 founder shares and 30,000 placement shares. The Chart Group L.P., the sole managing member of our sponsor, is a limited partnership that is managed and controlled by its general partner, Antwerp L.L.C., a New York limited liability company. Mr. Brady owns a majority of the membership interests in Antwerp L.L.C., and is its Chief Executive Officer and a member of its Management Committee. As such, Mr. Brady may be deemed to have effective control of Antwerp L.L.C. and thereby effective control over The Chart Group L.P. and our sponsor and may exercise voting and dispositive power with respect to the shares held by our sponsor and The Chart Group L.P. Consequently, Mr. Brady may be deemed the beneficial owner of 1,625,000 shares composed of 1,320,000 founder shares and 305,000 placement shares, held by our sponsor. Mr. Brady directly holds 108,750 of our founder shares. Mr. Brady disclaims beneficial ownership over any shares owned by The Chart Group L.P. or our sponsor over which he does not have any pecuniary interest. |
5 |
Mr. Wright holds 245,000 shares composed of 225,000 founder shares and 20,000 placement shares. Mr. Wrights founder shares will not be subject to forfeiture in the event the underwriters overallotment option is not exercised. |
6 |
Messrs. Ridge, Kerrey, Teen and Medina, respectively, hold founder shares and such shares will not be subject to forfeiture in the event the underwriters overallotment option is not exercised. |
7 |
Cowen Group, Inc. has indirect sole voting and dispositive power over Cowen Overseas through its ownership of Ramius Advisors, LLC a wholly-owned subsidiary of Cowen Group, Inc. and the general partner of Cowen Overseas. This amount includes placement shares beneficially owned by Cowen Overseas Investment LP. However, in no event will Cowen Overseas sell any of its placement shares or placement warrants prior to the date 180 days immediately following the completion of this offering. As Chairman and Chief Executive Officer of Cowen Group, Inc., Peter Cohen may be deemed to control or share control of Cowen Group, Inc. Peter Cohens business address is c/o Ramius Advisors, LLC, 599 Lexington Avenue, 27th Floor, New York, New York 10022. Andrew Cohen who is the managing director of Ramius Advisors, LLC, has voting and dispositive power with respect to the shares held by Cohen Overseas. Each of Peter Cohen and Andrew Cohen disclaims beneficial ownership of any securities over which he does not have pecuniary interest. |
8 |
Kendall Family Investments, through its membership interest in the sponsor, is the indirect holder of 1,165,000 shares composed of 275,000 placement shares and 890,625 founder shares. Kendall Family Investments is controlled by Mr. Louis M. Bacon, who has voting and dispositive power over its securities. Kendall Family Investments has an address of 1251 Avenue of the Americas, New York, NY 10020. |
after the expiration of the underwriters overallotment option, excluding the placement shares) are subject to forfeiture pro-rata by our initial stockholders in the event the last sales price of our stock does not equal or exceed $11.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period within 60 months following the closing of our initial business combination. An additional number of founder shares equal to 2.5% of our shares of common stock issued and outstanding after the consummation of this offering and expiration of the underwriters overallotment option (excluding the placement shares), will be subject to forfeiture on a pro-rata basis by our initial stockholders in the event the last sales price of our stock does not equal or exceed $13.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for at least one period of 20 trading days within any 30-trading day period within 60 months following the closing of our initial business combination. None of the placement shares are subject to forfeiture.
our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) in the case of the placement units, including the component securities therein, until 30 days after the consummation of our initial business combination, except in each case (a) to the officers or directors or other initial stockholders, any affiliates or family members of any of the officers or directors or other initial stockholders, any members of our sponsor, or partners, affiliates or employees of the members of our sponsor, or partners of Cowen Overseas, or any of their respective affiliates, (b) by gift to a member of our sponsor, or partners, affiliates or employees of the members of our sponsor, or a partner of Cowen Overseas, or one of our initial stockholders, an immediate family member of one of the members of our sponsor or partners of Cowen Overseas, or to a trust, the beneficiary of which is a family member of a member of our sponsor or partners, affiliates or employees of the members of our sponsor, or partner of Cowen Overseas, or one of our initial stockholders, or to a charitable organization; (c) by virtue of laws of descent and distribution upon death of an officer or director, one of our initial stockholders, or a partner of Cowen Overseas; (d) pursuant to a qualified domestic relations order; (e) in the event of our liquidation prior to our consummation of our initial business combination; or (f) by virtue of the laws of Delaware or our sponsors limited liability company agreement upon dissolution of our sponsor or, in the case of Cowen Overseas, by virtue of the laws of the Cayman Islands or its controlling limited partnership agreement (g) in the event of our consummation of a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property subsequent to our consummation of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions. Our initial stockholders have also agreed, to the extent applicable, that they will not sell or transfer founder shares that remain subject to forfeiture. In addition, in no event will Cowen Overseas be permitted to sell or transfer any of the placement units or the securities included therein until the date that is 180 days after the consummation of the offering.
of the placement units placed in the trust account will be included as a part of the liquidation amount payable to our public stockholders and the placement warrants will expire worthless. Including the private placement of founder shares and placement units, our initial stockholders will own 22.3% and Cowen Overseas will own 1.5% of the outstanding common stock following offering and the exercise, if any, of the underwriters overallotment option (assuming that neither our initial stockholders nor Cowen Overseas purchases any shares in the offering or the public market.)
initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
if our stockholders want us to hold an annual meeting prior to our consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
shares held by them and any public shares purchased during or after the offering in favor of our initial business combination. Assuming our initial business combination is approved, to the extent provided in this prospectus, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction, for cash equal to a pro rata share of the aggregate amount then on deposit in the trust account, including interest but less interest withdrawn for working capital purposes, to pay taxes or dissolution costs and excluding the deferred underwriting discount.
waive these same redemption rights. Also, Cowen Overseas has committed to purchase 150,000 placement units, at the price of $10.00 per unit, in a private placement that will occur simultaneously with the closing of this offering. If we submit our initial business combination to our public stockholders for a vote, each of our initial stockholders has agreed, and our officers and directors, will each agree, to vote their respective founder shares, placement shares and any public shares purchased in or after the offering in favor of our initial business combination.
warrants will expire five years after the consummation of our initial business combination, at 5:00 p.m., New York time, or earlier upon redemption or liquidation.
|
in whole and not in part; |
|
at a price of $0.01 per warrant; |
|
upon not less than 30 days prior written notice of redemption (the 30-day redemption period to each warrant holder; and |
|
if, and only if, the reported last sale price of the common stock equals or exceeds $17.50 per share for any 20 trading days within a 30 trading day period ending three business days before we send to the notice of redemption to the warrant holders. |
described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of common stock in connection with a proposed initial business combination, or (d) in connection with the redemption of our public shares upon our failure to consummate our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of common stock in respect of such event.
provisions cannot be amended without the approval of 65% of our stockholders. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
|
if we are unable to consummate our initial business combination within 21 months from the date of this prospectus, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses (although, we expect all or substantially all of such interest released to be used for working capital purposes), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; |
|
after the consummation of this offering and prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination; |
|
although we do not intend to enter into a business combination with a target business that is affiliated with our initial stockholders, our directors or officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA that such a business combination is fair to our stockholders from a financial point of view; |
|
if a stockholder vote on our initial business combination is not required by law or Nasdaq and we do not decide to hold a stockholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to consummating our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; and |
|
we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
|
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an interested stockholder); |
|
an affiliate of an interested stockholder; or |
|
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. |
|
A business combination includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if: |
|
our board of directors approves the transaction that made the stockholder an interested stockholder, prior to the date of the transaction; |
|
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or |
|
on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
|
1% of the total number of shares of common stock then outstanding, which will equal 98,500 shares immediately after this offering (or 112,563 if the underwriters exercise their overallotment option); or |
|
the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
|
the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
|
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
|
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
|
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
Underwriter |
Number of Units |
|||||
---|---|---|---|---|---|---|
Cowen and
Company, LLC |
||||||
EarlyBirdCapital, Inc. |
||||||
Mitsubishi
UFJ Securities (USA), Inc. |
||||||
Total
|
7,500,000 |
operating company. Among the factors considered in determining initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the units, common stock or warrants will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, common stock or warrants will develop and continue after this offering.
Fees |
Fee per Unit |
Without Exercise of the Overallotment Option |
With Exercise of Overallotment Option |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Public
offering price |
$ | 10.00 | $ | 75,000,000 | $ | 86,250,000 | ||||||||
Underwriting
discount(1) |
0.275 | 2,062,500 | 2,371,875 | |||||||||||
Deferred
underwriting discount(1) |
0.3125 | 2,343,750 | 2,695,312.50 | |||||||||||
Proceeds
before expenses(2) |
9.41 | 70,593,750 | 81,182,812.50 |
(1) |
The underwriters have agreed to defer $2,343,750, or $2,695,312.50 if the underwriters overallotment option is exercised in full, of the underwriting discounts and commissions, equal to 3.125% of the gross proceeds of the units being offered to the public, until the consummation of our initial business combination. Upon the consummation of our initial business combination, deferred underwriting discounts and commissions shall be released to the underwriters out of the gross proceeds of this offering held in a trust account in the United States with Continental Stock Transfer & Trust Company acting as trustee. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions. No discounts or commissions will be paid on the sale of the placement units. |
(2) |
The offering expenses are estimated at $725,000, which are not reflected in the preceding table. |
|
Short sales involve secondary market sales by the underwriters of a greater number of shares than they are required to purchase in the offering. |
|
Covered short sales are sales of units in an amount up to the number of units represented by the underwriters overallotment option. |
|
Naked short sales are sales of units in an amount in excess of the number of units represented by the underwriters overallotment option. |
|
Covering transactions involve purchases of units either pursuant to the overallotment option or in the open market after the distribution has been completed in order to cover short positions. |
|
To close a naked short position, the underwriters must purchase shares in the open market after the distribution has been completed. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering. |
|
To close a covered short position, the underwriters must purchase units in the open market after the distribution has been completed or must exercise the overallotment option. In determining the source of shares to close the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the overallotment option. |
|
Stabilizing transactions involve bids to purchase units so long as the stabilizing bids do not exceed a specified maximum. |
effective date of the registration statement of which this prospectus forms a part, or earlier upon our liquidation.
|
to any legal entity that is authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; |
|
to any legal entity that has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; |
|
to fewer than 100 natural or legal persons (other than qualified investors as defined below) subject to obtaining the prior consent of the underwriter for any such offer; or |
|
in any other circumstances that do not require the publication of a prospectus pursuant to Article 3 of the Prospectus Directive. |
|
released, issued, distributed or caused to be released, issued or distributed to the public in France; or |
|
used in connection with any offer for subscription or sale of the units to the public in France. |
|
Such offers, sales and distributions will be made in France only: |
|
to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint dinvestisseurs), in each case investing for their own account, all as defined in, and in accordance with, Article L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier; |
|
to investment services providers authorized to engage in portfolio management on behalf of third parties; or |
|
in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Reglement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à lépargne). |
(a development stage company)
F-2 |
||||||
Financial
Statements |
||||||
Balance
Sheets |
F-3 |
|||||
Statements of Operations |
F-4 |
|||||
Statements of Changes in Stockholders Equity |
F-5 |
|||||
Statements of Cash Flows |
F-6 |
|||||
Notes to
Financial Statements |
F-7
F-12 |
|||||
Chart Acquisition Corp.
/s/
Rothstein Kass Rothstein Kass |
July 11, 2012
(a development stage company)
June 30, 2012 (Unaudited) |
December 31, 2011 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ASSETS |
|||||||||||
Current
Assets: |
|||||||||||
Cash
|
$ | 52,577 | $ | 70,274 | |||||||
Due from
Sponsor |
409 | 409 | |||||||||
Non-current Assets: |
|||||||||||
Deferred
Offering Costs |
158,972 | 154,042 | |||||||||
Total
Assets |
$ | 211,958 | $ | 224,725 | |||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
|||||||||||
Current
Liabilities: |
|||||||||||
Accounts
Payable and Accrued Expenses |
$ | 15,000 | $ | 25,252 | |||||||
Note
Payable, Sponsor |
175,000 | 175,000 | |||||||||
Total
Current Liabilities |
190,000 | 200,252 | |||||||||
Stockholders Equity: |
|||||||||||
Preferred
Stock, $.0001 par value; 1,000,000 shares authorized, no shares issued and outstanding |
| | |||||||||
Common
Stock, $.0001 par value; 29,000,000 shares authorized; 2,156,250 shares issued and outstanding, respectively |
216 | 216 | |||||||||
Additional
Paid-in Capital |
24,784 | 24,784 | |||||||||
Deficit
Accumulated During Development Stage |
(3,042 | ) | (527 | ) | |||||||
Total
Stockholders Equity |
21,958 | 24,473 | |||||||||
Total
Liabilities and Stockholders Equity |
$ | 211,958 | $ | 224,725 |
(a development stage company)
Six Months Ended June 30, 2012 (Unaudited) |
July 22, 2011 (date of inception) to December 31, 2011 |
July 22, 2011 (date of inception) to June 30, 2012 (Unaudited) |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenue
|
$ | | $ | | $ | | ||||||||
Formation
and operating costs |
(2,515 | ) | (527 | ) | (3,042 | ) | ||||||||
Net Loss
Attributable to Common Stockholders |
(2,515 | ) | (527 | ) | (3,042 | ) | ||||||||
Weighted
Average Number of Common Shares Outstanding, basic and diluted |
2,156,250 | 2,156,250 | 2,156,250 | |||||||||||
Basic and
Diluted Net Loss |
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
(a development stage company)
For the Period from July 22, 2011 (date of inception) to June 30, 2012
Common Stock |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares |
Amount $.0001 Par |
Additional Paid-in Capital |
Deficit Accumulated During Developmental Stage |
Total Stockholders Equity |
||||||||||||||||||
Sale of
common stock issued to Sponsor on August 9, 2011 at $.011594 per share |
2,156,250 | $ | 216 | $ | 24,784 | $ | | $ | 25,000 | |||||||||||||
Net loss
attributable to common stockholders |
| | | (527 | ) | (527 | ) | |||||||||||||||
Balance,
December 31, 2011 |
2,156,250 | 216 | 24,784 | (527 | ) | 24,473 | ||||||||||||||||
Net loss
attributable to common stockholders (unaudited) |
| | | (2,515 | ) | (2,515 | ) | |||||||||||||||
Balance,
June 30, 2012 (unaudited) |
2,156,250 | $ | 216 | $ | 24,784 | $ | (3,042 | ) | $ | 21,958 |
(a development stage company)
Six Months Ended June 30, 2012 (Unaudited) |
July 22, 2011 (date of inception) to December 31, 2011 |
July 22, 2011 (date of inception) to June 30, 2012 (Unaudited) |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash
Flows from Operating Activities |
||||||||||||||
Net Loss
|
$ | (2,515 | ) | $ | (527 | ) | $ | (3,042 | ) | |||||
Adjustment
to reconcile net loss to net cash used in operating activities: |
||||||||||||||
Change in
operating assets and liabilities: |
||||||||||||||
Due from
Sponsor |
| (409 | ) | (409 | ) | |||||||||
Net Cash
Used in Operating Activities |
(2,515 | ) | (936 | ) | (3,451 | ) | ||||||||
Cash
Flows from Financing Activities |
||||||||||||||
Deferred
Offering Costs |
(15,182 | ) | (128,790 | ) | (143,972 | ) | ||||||||
Proceeds
from Note Payable, Sponsor |
| 175,000 | 175,000 | |||||||||||
Proceeds
from Sale of Common Stock to Sponsor |
| 25,000 | 25,000 | |||||||||||
Net Cash
Provided by (Used in) Financing Activities |
(15,182 | ) | 71,210 | 56,028 | ||||||||||
Net
increase (decrease) in Cash |
(17,697 | ) | 70,274 | 52,577 | ||||||||||
Cash at
Beginning of the Period |
70,274 | | | |||||||||||
Cash at
Ending of the Period |
$ | 52,577 | $ | 70,274 | $ | 52,577 | ||||||||
Supplemental Disclosure for Non-cash Financing Activities |
||||||||||||||
Accrued
expenses included in Deferred |
$ | 15,000 | $ | 25,252 | $ | 15,000 |
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to June 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to June 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to June 30, 2012
placement of the founder shares to the sponsor, and the proposed public offering. Following the public offering, the Company will not generate any operating revenues until after completion of an initial business combination, at the earliest. The Company will generate non-operating income in the form of interest income on the designated trust account after the public offering.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to June 30, 2012
are related to the proposed public offering and private placements and that will be charged to stockholders equity upon the completion of the public offering, or charged to operations if the public offering is not completed.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to June 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to June 30, 2012
expenses incurred or expected to be incurred by the Company. The principal balance of the note is payable on the earlier of (i) the date of the consummation of the public offering and (ii) September 30, 2012. The principal balance is prepayable without penalty at any time in whole or in part. No interest accrues on the unpaid principal balance of the note. Due to the short-term nature of the note, the fair value of the note approximates its carrying amount.
PROSPECTUS
Cowen and
Company |
|||||||
EarlyBirdCapital,
Inc. Mitsubishi
UFJ Securities |
SEC filing
fee |
13,179 | |||||
FINRA filing
fee |
12,000 | |||||
Accounting
fees and expenses |
45,000 | |||||
Printing and
engraving expenses |
40,000 | |||||
Legal fees
and expenses |
250,000 | |||||
NASDAQ
Capital Market fees |
75,000 | |||||
Travel and
roadshow |
30,000 | |||||
Directors and
officers insurance |
250,000 | |||||
Miscellaneous
expenses(1) |
9,821 | |||||
Total |
$725,000 |
(1) |
This amount represents additional expenses that may be incurred by us in connection with the offering over and above those specifically listed above, including distribution and mailing costs. |
settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
plan; and references to serving at the request of the corporation shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the corporation as referred to in this section.
Stockholders |
Number of Shares |
|||||
---|---|---|---|---|---|---|
Chart
Acquisition Holdings LLC |
2,156,250 | |||||
Total |
2,156,250 |
with our organization pursuant to the exemption from registration contained in Section 4(2) of the Securities Act as they were sold to an accredited investor as defined in Rule 501(a) of the Securities Act. The shares of common stock issued to our sponsor were sold for an aggregate offering price of $25,000 at a purchase price of $.0116 per share. No underwriting discounts or commissions were paid with respect to such sales. Of these securities, up to 281,250 shares of common stock are subject to forfeiture in the event that the underwriters overallotment option is not exercised, in full.
Name: Christopher D. Brady Title: President |
Name |
Position |
Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ JOSEPH R. WRIGHT* |
Chief
Executive Officer and |
July 12, 2012 |
||||||||
Joseph R.
Wright |
Chairman
of the Board |
|||||||||
/s/ CHRISTOPHER D. BRADY |
President
and Director |
July 12, 2012 |
||||||||
Christopher D.
Brady |
||||||||||
/s/ MICHAEL LABARBERA* |
Principal
Accounting and Financial |
July 12, 2012 |
||||||||
Michael
LaBarbera |
Officer,
Secretary |
|||||||||
/s/ GOVERNOR THOMAS RIDGE* |
Director |
July 12, 2012 |
||||||||
Governor Thomas
Ridge |
||||||||||
/s/ SENATOR JOSEPH ROBERT* BOB
KERREY |
Director |
July 12, 2012 |
||||||||
Senator Joseph
Robert Bob Kerrey |
||||||||||
/s/ PETER A. COHEN* |
Director |
July 12, 2012 |
||||||||
Peter A.
Cohen |
||||||||||
/s/ TIMOTHY N. TEEN* |
Director |
July 12, 2012 |
||||||||
Timothy N.
Teen |
||||||||||
/s/ MANUEL D. MEDINA |
Director |
July 12, 2012 |
||||||||
Manuel D.
Medina |
||||||||||
*By: /s/
Christopher D. Brady Name: Christopher D. Brady Attorney-in-Fact |
Exhibit No. |
Description |
|||||
---|---|---|---|---|---|---|
1.1 | Form
of Underwriting Agreement.* |
|||||
3.1 | Certificate of Incorporation.* |
|||||
3.2 | Certificate of Amendment to Certificate of Incorporation. |
|||||
3.3 | Form
of Amended and Restated Certificate of Incorporation.* |
|||||
3.4 | Bylaws.* |
|||||
4.1 | Specimen Unit Certificate.* |
|||||
4.2 | Specimen Common Stock Certificate.* |
|||||
4.3 | Specimen Warrant Certificate (included in Exhibit 4.4).* |
|||||
4.4 | Form
of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.* |
|||||
5.1 | Opinion of Ellenoff Grossman & Schole LLP.* |
|||||
10.1 | Form
of Investment Management Trust Account Agreement between Continental Stock Transfer & Trust Company and the Registrant.* |
|||||
10.2 | Form
of Registration Rights Agreement among the Registrant and security holders.* |
|||||
10.3 | Form
of Letter Agreement by and between the Registrants security holders, the officers and directors of the Registrant, and the
underwriters.* |
|||||
10.4 | Securities Purchase Agreement dated August 9, 2011 between the Registrant and Chart Acquisition Group LLC.* |
|||||
10.5 | Amended and Restated Promissory Note, dated as of March 31, 2012 issued to Chart Acquisition Group LLC in the amount of
$175,000. |
|||||
10.6 | Amended and Restated Placement Unit Subscription Agreement between the Registrant and Sponsor.* |
|||||
10.7 | Amended and Restated Placement Unit Subscription Agreement between the Registrant and Cowen Overseas Investment LP.* |
|||||
10.8 | Form
of Letter Agreement between Chart Acquisition Group LLC and Registrant regarding administrative support.* |
|||||
10.9 | Form
of Indemnity Agreement.* |
|||||
10.10 | Placement Unit Subscription Agreement between the Registrant and Joseph Wright.* |
|||||
14.1 | Code
of Business and Ethics.* |
|||||
23.1 | Consent of Rothstein Kass |
|||||
23.2 | Consent of Ellenoff Grossman & Schole LLP (included in Exhibit 5.1).* |
|||||
24 | Power
of Attorney (included in signature) |
|||||
99.1 | Audit
Committee Charter* |
* |
Previously filed. |