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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2012

 

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to_________________

 

Commission File Number: 000-54339

 

SCG FINANCIAL ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware   27-4452594

(State or Other Jurisdiction of Incorporation or

Organization)

  (I.R.S. Employer Identification No.)
     
615 N. Wabash, Chicago, IL   60611
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s Telephone Number, Including Area Code   (312) 784-3960

 

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   ¨ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes   x     No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ¨ Accelerated filer ¨
   
Non-accelerated filer x Smaller Reporting Company ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  x   No ¨

  

As of November 9, 2012, the registrant had 9,523,810 shares of Common Stock outstanding.

 

 
 

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION  
     
ITEM 1. INTERIM FINANCIAL STATEMENTS 1
     
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 14
     
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 17
     
ITEM 4. CONTROLS AND PROCEDURES 17
     
PART II. OTHER INFORMATION  
     
ITEM 1. LEGAL PROCEEDINGS 18
ITEM 1A. RISK FACTORS 18
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 18
ITEM 4. MINE SAFETY DISCLOSURES 18
ITEM 5. OTHER INFORMATION 18
ITEM 6. EXHIBITS 19

 

 
 

 

PART I. FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

  

SCG FINANCIAL ACQUISITION CORP.

(a development stage company)

INTERIM BALANCE SHEETS

 

   September 30, 2012   December 31, 2011 
  (Unaudited)   (Audited) 
ASSETS        
Current Assets:          
Cash  $11,321   $348,373 
Prepaid Expense   25,145    18,622 
Total Current Assets   36,466    366,995 
           
Noncurrent Assets:          
Investments Held in Trust   80,013,153    80,037,977 
           
Total Assets  $80,049,619   $80,404,972 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current Liabilities:          
Accounts Payable and Accrued Expenses  $542,540   $176,285 
Notes Payable, Sponsor   100,000    0 
Total Current Liabilities   642,540    176,285 
           
Other Liabilities:          
Deferred Underwriter's Fee   2,000,000    2,000,000 
           
Total Liabilities   2,642,540    2,176,285 
           
Commitments and Contingencies          
           
Common Stock, subject to possible redemption: 7,240,708
and 7,322,869 shares (at redemption value) as of     
September 30, 2012 and December 31, 2011, respectively.
   72,407,078    73,228,686 
           
Stockholders' Equity          
           
Common Stock, $.0001 par value, 250,000,000 shares
authorized; 2,283,102 and 2,200,941 shares issued and outstanding
as of September 30, 2012 and December 31, 2011, respectively
(excluding 7,240,708 and 7,322,869 shares subject to
possible redemption as of September 30, 2012 and
December 31, 2011, respectively)
   228    220 
Additional Paid-in Capital   6,183,886    5,362,286 
Deficit Accumulated during Development Stage   (1,184,113)   (362,505)
Total Stockholders' Equity   5,000,001    5,000,001 
           
Total Liabilities and Stockholders' Equity  $80,049,619   $80,404,972 

 

The accompanying notes are an integral part of the unaudited financial statements.

 

1
 

 

SCG FINANCIAL ACQUISITION CORP.

(a development stage company)

INTERIM STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended
September 30, 2012
   Three Months
Ended
September 30, 2011
   Nine Months
Ended
September 30, 2012
   For the Period from
January 5, 2011
 (date of inception)
to September 30, 2011
   For the Period from
January 5, 2011
(date of inception)
To September 30, 2012
 
                     
Revenue  $-   $-   $-   $-   $- 
                          
Expenses:                         
General and Administrative   (110,746)   (118,560)   (857,808)   (241,849)   (1,258,290)
                          
Loss from Operations   (110,746)   (118,560)   (857,808)   (241,849)   (1,258,290)
Interest Income   15,638    16,568    36,200    28,669    74,177 
                          
Net Loss Attributable to
Common Stockholders
  $(95,108)  $(101,992)  $(821,608)  $(213,180)  $(1,184,113)
                          
Weighted Average Number of Common Shares Outstanding, excludes shares subject to possible redemption - basic and diluted   2,283,102    2,186,009    2,260,323    1,905,572    2,101,440 
                          
Basic and Diluted Net Loss per common share, excludes shares subject to possible redemption - basic and diluted  $(0.04)  $(0.05)  $(0.36)  $(0.11)  $(0.56)

 

The accompanying notes are an integral part of the unaudited financial statements.

 

2
 

 

SCG FINANCIAL ACQUISITION CORP.

(a development stage company)

INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

For the Period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

  

   Common Stock   Additional
Paid-in
   Deficit
Accumulated
During
Development
   Total
Stockholders'
 
   Shares   Amount $.0001 Par   Capital   Stage   Equity 
Sale of common stock issued to initial
stockholders on January 28, 2011
   1,752,381   $175   $24,825   $-   $25,000 
                          
Sale of 8,000,000 units on April 18, 2011, net of underwriters' discount and offering costs   8,000,000    800    75,565,392         75,566,192 
                          
Forfeiture of sponsor shares in connection with the underwriter’s election to not exercise their over-allotment option   (228,571)   (23)   23           
                          
Net loss attributable to common stockholders                  (362,505)   (362,505)
                          
Sale of private placement warrants                         
On April 12, 2011             3,000,000         3,000,000 
                          
Net proceeds subject to possible redemption of 7,322,869 shares at redemption value   (7,322,869)   (732)   (73,227,954)        (73,228,686)
                          
Balance at December 31, 2011 (audited)   2,200,941   $220   $5,362,286   $(362,505)  $5,000,001 
                          
Change in shares subject to possible redemption to 7,240,708 common shares at redemption value (unaudited)   82,161    8    821,600         821,608 
                          
Net loss attributable to common shares not subject to possible redemption (unaudited)             

 

 

    (821,608)   (821,608)
                          
Balance, September 30, 2012 (unaudited)   2,283,102   $228   $6,183,886   $(1,184,113)  $5,000,001 

 

The accompanying notes are an integral part of the unaudited financial statements.

 

3
 

 

SCG FINANCIAL ACQUISITION CORP.

(a development stage company)

INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Nine Months
Ended
September 30, 2012
   For the Period
from January 5, 2011
(date of inception) to
September 30, 2011
   For the Period
from January 5, 2011
(date of inception) to
September 30, 2012
 
             
Cash Flows from Operating Activities               
Net Loss  $(821,608)  $(213,180)  $(1,184,113)
Adjustments to reconcile net loss to net cash used in operating activities:               
(Increase) decrease in accrued interest income   24,823    (28,669)   (13,153)
Increase in prepaid expenses   (6,522)   (36,349)   (25,145)
Increase in accrued expenses   366,255    124,112    542,540 
                
Net cash used in operating activities   (437,052)   (154,086)   (679,871)
                
Cash Flows from Investing Activities               
Investments held in Trust Account   -    (80,000,000)   (80,000,000)
                
Cash Flows from Financing Activities               
Proceeds from public offering, net of underwriting discount        78,000,000    78,000,000 
Proceeds from issuance of warrants        3,000,000    3,000,000 
Proceeds from notes payable, stockholder   100,000    175,000    275,000 
Proceeds from issuance of stock to initial investor        25,000    25,000 
Payment of note payable, stockholder        (175,000)   (175,000)
Payment of offering costs        (433,808)   (433,808)
                
Net cash provided by financing activities   100,000    80,591,192    80,691,192 
                
Net increase (decrease)  in cash   (337,052)   437,106    11,321 
                
Cash at beginning of the period   348,373    -    - 
                
Cash at end of the period  $11,321   $437,106   $11,321 
    

 

 

           
Supplemental disclosure of non-cash financing activities:               
Deferred underwriter’s fee  $-   $2,000,000   $2,000,000 

 

The accompanying notes are an integral part of the unaudited financial statements.

 

4
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

( Unaudited )

 

 

NOTE A—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

 

SCG Financial Acquisition Corp. (a corporation in the development stage) (the “Company”) was incorporated in Delaware on January 5, 2011. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets that the Company has not yet identified (“Initial Business Combination”). The Company has neither engaged in any operations nor generated any income, other than interest on the trust account assets (the “Trust Account”). The Company is focused on identifying a prospective target business or asset with which to consummate an Initial Business Combination. The Company is considered to be in the development stage as defined in FASB Accounting Standards Codification 915, or FASB ASC 915, “Development Stage Entities,” and is subject to the risks associated with activities of development stage companies. The Company has selected December 31 as its fiscal year end.

 

The Company is currently evaluating Initial Business Combination candidates. All activity through September 30, 2012 relates to the Company’s formation, initial public offering (“Offering”) and identification and investigation of prospective target businesses with which to consummate an Initial Business Combination.

 

The registration statement for the Offering was declared effective April 8, 2011. The Company consummated the Offering on April 18, 2011 and received net proceeds of approximately $82,566,000, before deducting underwriting compensation of $4,000,000 (which includes $2,000,000 of deferred contingent underwriting compensation payable upon consummation of an Initial Business Combination) and includes $3,000,000 received for the purchase of 4,000,000 warrants by SCG Financial Holdings LLC (the “Sponsor”). Total offering costs (excluding $2,000,000 in underwriting fees) was $433,808.

 

On April 12, 2011, the Sponsor purchased 4,000,000 warrants (“Sponsor Warrants”) from the Company for an aggregate purchase price of $3,000,000. The Sponsor Warrants are identical to the warrants sold in the Offering, except that if held by the original holder or its permitted assigns, they (i) may be exercised for cash or on a cashless basis and (ii) are not subject to being called for redemption.

 

Total gross proceeds to the Company from the 8,000,000 units sold in the offering was $80,000,000. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering, although substantially all of the net proceeds of the Offering are intended to be generally applied toward consummating an Initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully consummate an Initial Business Combination.

 

On April 27, 2011, $80,000,000 from the Offering and Sponsor Warrants that was placed in a trust account (“Trust Account”) was invested, as provided in the Company’s registration statement. The Company is permitted to invest the proceeds of the Trust Account in U.S. “government securities,” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 (the “1940 Act”) with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the 1940 Act. The Trust Account assets will be maintained until the earlier of (i) the consummation of an Initial Business Combination or (ii) the distribution of the Trust Account as described below.

 

On May 2, 2012, the Company’s common stock commenced trading on The Nasdaq Capital Market (“Nasdaq”), under the symbol “SCGQ”. Prior to May 2, 2012, the common stock was quoted on the Over-the-Counter Bulletin Board quotation system under the same symbol.

 

5
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

The Company, after signing a definitive agreement for the acquisition of one or more target businesses or assets, will not submit the transaction for stockholder approval, unless otherwise required by law or the rules of the Nasdaq Stock Market. The Company will proceed with an Initial Business Combination if it is approved by the board of directors. Only in the event that the Company is required to seek stockholder approval in connection with its Initial Business Combination, the Company will proceed with an Initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination. In connection with such a vote, if an Initial Business Combination is approved and consummated, stockholders that elect to redeem their shares of common stock will be entitled to receive their pro-rata portion of the Trust Account as follows: (i) public stockholders voting against the Initial Business Combination and electing to redeem shares of common stock shall be entitled to receive a per share pro rata portion of the Trust Account (excluding interest and net of taxes) and (ii) public stockholders voting in favor of the Initial Business Combination and electing to redeem shares of common stock shall be entitled to receive a per share pro rata portion of the Trust Account (together with interest thereon which was not previously used for working capital but net of taxes). These shares of common stock are recorded at a fair value and classified as temporary equity, in accordance with ASC 480. The Sponsor, Gregory H. Sachs and each member of the Sponsor have agreed, in the event the Company is required to seek stockholder approval of its Initial Business Combination, to vote the initial shares acquired by them in favor of approving an Initial Business Combination. The Sponsor, Gregory H. Sachs and each member of the Sponsor have also agreed to vote shares of common stock acquired by them in the Offering or in the aftermarket in favor of an Initial Business Combination submitted to the Company’s stockholders for approval.

 

Going Concern Consideration

 

The Company’s Sponsor, officers and directors have agreed that the Company will have until January 12, 2013 to consummate an Initial Business Combination and one three month extension subject to (i) a signed letter of intent to consummate its Initial Business Combination by January 12, 2013 (and an Initial Business Combination relating thereto has not been consummated) and (ii) the approval of at least 65% of the holders of the Company’s common stock. If the Company does not consummate an Initial Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up, (ii) redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including a portion of the interest earned thereon which was not previously used for working capital (less up to $100,000 of such net interest to pay dissolution expenses), but net of any taxes (which redemption would completely extinguish such holders’ rights as stockholders, including the right to receive further liquidation distributions, if any) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation. This mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern.

 

The Sponsor, Gregory H. Sachs and each member of the Sponsor have waived their rights to participate in any redemption with respect to their initial shares. However, if the Sponsor, Gregory H. Sachs or any member of the Sponsor acquire shares of common stock after the Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not consummate an Initial Business Combination within the required time period. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Offering.

 

6
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying unaudited interim financial statements should be read in conjunction with the audited statements and notes thereto included in the Company’s 2011 Annual Report on Form 10-K filed with the SEC on March 22, 2012. The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange of Commission (SEC), and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2012 and the results of operations for the three months ended September 30, 2012 and 2011, nine months ended September 30, 2012, period from January 5, 2011 (date of inception) to September 30, 2011 and period from January 5, 2011 (date of inception) to September 30, 2012. The balance sheet as of December 31, 2011, as presented herein, was derived from the Company’s audited financial statements as reported in previous filings with the SEC. Certain information and disclosures normally included in interim financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

 

Development stage company

 

The Company complies with the reporting requirements of FASB ASC 915, “Development Stage Entities.” At September 30, 2012, the Company had not commenced any operations nor generated revenue to date, other than interest on the Trust Account balance. All activity through September 30, 2012 relates to the Company’s formation, the Offering and the investigation of prospective target businesses with which to consummate an Initial Business Combination.

 

Net loss per common share

 

The Company complies with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. At September 30, 2012, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common share for the period.

 

Concentration of credit risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

 

Restricted cash equivalents held in the Trust Account

 

The amounts held in the Trust Account represent substantially all of the proceeds of the Offering and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of an Initial Business Combination. The funds held in the Trust Account are invested primarily in United States Treasury Securities.

 

7
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

Fair value of financial instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets.

 

Use of estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Redeemable common stock

 

The 8,000,000 common shares sold as part of the Offering contain a redemption feature which allows for the redemption of common shares under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with FASB ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the Company does not specify a maximum redemption threshold, its Charter provides that in no event will it redeem any of its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its public shares and the related Initial Business Combination, and instead may search for an alternate Initial Business Combination.

 

The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of the security to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock shall be affected by charges against the par value of common stock and paid-in capital. Accordingly, at September 30, 2012 and December 31, 2011, 7,240,708 and 7,322,869 public shares, respectively, are classified outside of permanent equity at their redemption value. The redemption value is equal to the pro rata share of the aggregate amount then on deposit in the Trust Account, including interest but less franchise and income taxes payable (approximately $10.00 per share at September 30, 2012).

 

Reclassifications

 

Certain reclassifications have been made to amounts previously reported for 2011 to conform with the 2012 presentation. Such reclassifications have no effect on previously reported net loss.

 

Securities held in Trust Account

 

Investment securities consist of United States Treasury securities. The Company classifies its securities as held-to-maturity in accordance with FASB ASC 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

 

8
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities' fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest income is recognized when earned.

 

Income tax

 

The Company complies with the accounting and reporting requirements of Financial Accounting Standards Board Accounting Standards Codification 740, or FASB ASC 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the interim financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

There were no unrecognized tax benefits as of September 30, 2012. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the interim financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2012. The Company is not currently aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The adoption of the provisions of FASB ASC 740 did not have a material impact on the Company’s financial position and results of operation and cash flows as of and for the period ended September 30, 2012.

 

The Company is subject to income tax examinations by major taxing authorities and has been since its inception.

 

9
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

Recently issued accounting standards

 

The Company does not believe that the adoption of any recently issued, but not yet effective, accounting standards will have a material impact on its financial position and results of operations.

 

NOTE C—INITIAL PUBLIC OFFERING

 

The Company consummated its Offering on April 18, 2011. Pursuant to the Offering, the Company sold 8,000,000 units at $10.00 per unit (“Units”). Each Unit consists of one share of the Company’s common stock, $0.0001 par value, and one redeemable common stock purchase warrant (“Warrant”). Each Warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $11.50 commencing on the later of (a) one year from the date of the prospectus for the Offering (April 12, 2012) or (b) 30 days after the completion of an Initial Business Combination, and will expire five years from the date of the consummation of the Initial Business Combination. The Warrants will be redeemable by the Company at a price of $0.01 per Warrant upon 30 days prior notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $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 on which notice of redemption is given.

 

NOTE D—RELATED PARTY TRANSACTIONS

 

The Company issued $75,000 and $100,000 unsecured promissory notes to the Sponsor on January 28, 2011 and February 9, 2011, respectively. The notes were non-interest bearing and were payable on the earlier of December 30, 2011 or the consummation of the Offering. The notes were repaid from the proceeds of the Company’s Offering. The Company issued a $100,000 unsecured promissory note to the Sponsor on August 15, 2012. This note is non-interest bearing and is payable upon the consummation of the Initial Business Combination.

 

On January 28, 2011, the Company issued to the Sponsor 1,752,381 shares of restricted common stock for an aggregate purchase price of $25,000 in cash. The purchase price for each share of common stock was approximately $0.0001 per share. These shares included 228,571 shares of common stock that were forfeited on June 2, 2011 (as a result of the underwriters not exercising their overallotment option) upon the expiration of the underwriter’s overallotment option. The Sponsor and its permitted transferees own 16% of the Company’s issued and outstanding shares after the Offering. A portion of the Sponsor’s shares, in an amount equal to 3% of the Company’s issued and outstanding shares, will be subject to forfeiture by the Sponsor in the event the last sales price of the Company’s stock does not equal or exceed $12.00 per share for any 20 trading days within any 30 trading day period within 24 months following the closing of an Initial Business Combination. The Sponsor, Gregory H. Sachs and each member of the Sponsor have agreed that they will not sell or transfer their initial shares until one year following the consummation of an Initial Business Combination, subject to earlier release in certain circumstances. 

 

10
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

The Sponsor purchased, in a private placement, 4,000,000 warrants prior to the Offering at a price of $0.75 per warrant (an aggregate purchase price of $3,000,000) from the Company. Based on the observable market prices, the Company believes that the purchase price of $0.75 per warrant for such warrants exceeded the fair value of such warrants on the date of the purchase. The valuation was based on comparable initial public offerings by previous blank check companies. The Sponsor has agreed that the warrants purchased will not be sold or transferred until 30 days following consummation of an Initial Business Combination, subject to certain limited exceptions. If the Company does not complete an Initial Business Combination, then the proceeds will be part of the liquidating distribution to the public stockholders and the warrants issued to the Sponsor will expire worthless. The private placement warrants are classified within permanent equity as additional paid-in capital in accordance with ASC 815-40-25-13.

 

The Company has entered into an Administrative Services Agreement, effective as of April 12, 2011, with Sachs Capital Group, LP, an affiliate of the Sponsor, for an estimated aggregate monthly fee of $7,500 for office space and secretarial and administrative services, with up to an additional $7,500 for other operating expenses incurred by the Sponsor on behalf of the Company. This agreement will expire upon the earlier of: (a) the successful completion of our Company’s Initial Business Combination, (b) January 12, 2013 (plus one 3 month extension subject to (i) a signed letter of intent and (ii) approval of at least 65% of the holders of the Company’s common stock), or (c) the date on which the Company is dissolved and liquidated.

 

The Sponsor is entitled to registration rights pursuant to a registration rights agreement. The Sponsor will be entitled to demand registration rights and certain “piggy-back” registration rights with respect to its shares of common stock, the Sponsor Warrants and the common stock underlying the Sponsor Warrants, commencing on the date such common stock or Sponsor Warrants are released from escrow. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

NOTE E—COMMITMENTS AND CONTINGENCIES

 

In conjunction with the Offering on April 18, 2011, the Company granted the underwriters a 45-day option to purchase up to 1,200,000 additional Units to cover the over-allotment at the initial offering price less the underwriting discounts and commissions.  This option expired unexercised on June 2, 2011.

 

A contingent fee payable to the underwriters of the Offering equal to 2.50% of the gross proceeds from the sale of the Units sold in the Offering will become payable from the amounts held in the Trust Account solely in the event the Company consummates its Initial Business Combination. Such contingent fee is reflected as deferred underwriter’s fee of $2,000,000 on the accompanying September 30, 2012 interim and December 31, 2011 balance sheets.

 

11
 

 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

NOTE F—INVESTMENT IN TRUST ACCOUNT

 

On April 27, 2011, $80,000,000 from the Offering and the sale of the Sponsor Warrants that was placed in a Trust Account was invested, as provided in the Company’s registration statement.  The Company is permitted to invest the proceeds of the Trust Account in U.S. “government securities,” within the meaning of Section 2(a)(16) of the 1940 Act with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the 1940 Act.  The Trust Account assets will be maintained until the earlier of (i) the consummation of an Initial Business Combination or (ii) the distribution of the Trust Account. 

 

Investment securities in the Company’s Trust Account consist of $79,991,200 and $80,041,697 in United States Treasury Bills and $20,270 and $740 of cash equivalents as of September 30, 2012 and December 31, 2011, respectively. The Company classifies its United States Treasury and equivalent securities as held-to-maturity in accordance with FASB ASC 320, "Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. The carrying amount, gross unrealized holding gains and fair value of held-to-maturity securities at September 30, 2012 and December 31, 2011 are as follows:

 

   Carrying
Amount
   Gross
Unrealized
Holding
Gains (Loss)
   Fair Value 
Held-to-maturity:               
U.S. Treasury Securities – September 30, 2012  $79,992,883   $(1,683)  $79,991,200 
U.S. Treasury Securities – December 31, 2011  $80,037,237   $4,460   $80,041,697 
                

 

NOTE G—FAIR VALUE MEASUREMENTS

 

The Company adopted FASB ASC 820, “Fair Value Measurements” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The adoption of FASB ASC 820 did not have an impact on the Company’s financial position or results of operations.

 

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2012, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability:

 

12
 

 

SCG Financial Acquisition Corp.

(a development stage company)

NOTES TO INTERIM FINANCIAL STATEMENTS

For the period from January 5, 2011 (date of inception) to September 30, 2012

(Unaudited)

 

Description  Fair Value   Quoted Prices
In
Active
Markets
(Level 1)
   Significant
Other
Observable
Inputs
(Level 2)
   Significant
Other
Unobservable
Inputs
(Level 3)
 
Assets:                    
U.S. Treasury Securities held in Trust Account:                    
September 30, 2012  $79,991,200   $79,991,200         
December 31, 2011  $80,041,697   $80,041,697         

 

NOTE H—PREFERRED STOCK

 

The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. As of September 30, 2012, the Company has not issued any shares of preferred stock.

 

 NOTE I – SUBSEQUENT EVENTS

 

On October 11, 2012, the Company issued an additional $100,000 unsecured promissory note to the Sponsor. This note is non-interest bearing and is payable upon the consummation of the Initial Business Combination.

 

13
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

References to the “Company,” “us” or “we” refer to SCG Financial Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the interim financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (the “Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

 

Forward-Looking Statements

 

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believe,” “expect,” “anticipate,” “project,” “target,” “optimistic,” “intend,” “aim,” “will” or similar expressions are intended to identify forward-looking statements. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These statements are based on the beliefs of our management as well as assumptions made by and information currently available to us and reflect our current view concerning future events. As such, they are subject to risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among many others: our ability to consummate a successful business transaction; uncertainty of capital resources; the speculative nature of our business; our ability to successfully implement new strategies; present and possible future governmental regulations; operating hazards; competition; the loss of key personnel; any of the factors in the “Risk Factors” section of our Annual Report for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (“SEC”) on March 22, 2012 (“Annual Report”); other risks identified in this Report; and any statements of assumptions underlying any of the foregoing. You should also carefully review other reports that we file with the SEC. We assume no obligation and do not intend to update these forward-looking statements, except as required by law.

 

Overview

 

We are a blank check company formed on January 5, 2011 for the purpose of effecting the Initial Business Combination. We are not limited to a particular industry or geographic region for purposes of consummating an Initial Business Combination, except that we will seek to capitalize on the substantial deal sourcing, investing and operating expertise of our management team to identify, acquire and operate a business located within or outside North America. The Nasdaq rules require 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 sum of the balance in the Trust Account (less any deferred corporate finance fees and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our Initial Business Combination. We anticipate structuring an Initial Business Combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure an Initial Business Combination to acquire less than 100% of such interests or assets of the target business, but we will only consummate such business combination if we (or any entity that is a successor to us in such business combination) will become the majority (50.1%) stockholder of the target. We will not consider any transaction that does not meet such criteria.

 

14
 

 

Results of Operations

 

We have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception up to the closing of our Offering has been in preparation of the Offering. Since the completion and closing of our Offering, our activity has been limited to evaluating business transaction candidates.  We will not generate any operating revenues until after completion of our Initial Business Combination. We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (i.e. United States Treasury Bills).

 

For the nine months ended September 30, 2012 and the period January 5, 2011 through September 30, 2011, we had net losses of $821,608 ($857,808 of expenses and $36,200 of accrued interest) and $213,180 ($241,849 of expenses and $28,669 of accrued interest), respectively. For the three months ended September 30, 2012 and September 30, 2011, we had net losses of $95,108 ($110,746 of expenses and $15,638 of accrued interest) and $101,992 ($118,560 of expenses and $16,568 of accrued interest), respectively.

 

Liquidity and Capital Resources

 

As of September 30, 2012, we had $11,321 in a bank account which is available for use by management to cover the costs associated with identifying a target business and negotiating an acquisition or merger. Out of the proceeds of our Offering which remained available outside of the Trust Account, we obtained officers and directors insurance covering a 12 month period from April 12, 2011 through April 12, 2012 for a cost of $65,000. The officers and directors insurance policy was renewed for nine months, providing coverage through January 12, 2013. The premium for coverage during the period April 13, 2012 through January 12, 2013 is $48,839. The prepaid balance as of September 30, 2012 was $18,269.

 

The cash balance as of September 30, 2012 is $11,321, which includes 1) receipt of $81,025,000 from the public and private sale of securities, net of underwriter fees, 2) payment of $433,808 of expenses associated with the Offering, 3) payment of $679,871 in operating expenditures, 4) investment of $80,000,000 in the Trust Account, and 5) loan from the Sponsor of $100,000.

 

We intend to use substantially all of the funds held in the Trust Account (net of taxes) to consummate our Initial Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to consummate our Initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital, to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

 

SCG Financial Holdings LLC may, but is not obligated to, loan us funds, from time to time, or at any time, in whatever amount it deems reasonable in its sole discretion, which may be convertible into warrants of the post business transaction entity at a price of $0.75 per warrant at the option of the lender. The warrants would be identical to the Sponsor Warrants. The holders of a majority of such warrants (or underlying shares) will be entitled to demand that we register these securities pursuant to an agreement to be entered into at the time of the loan. The holders of a majority of these securities would have certain “piggy-back” registration rights with respect to registration statements filed subsequent to such date. We will bear the expense incurred with the filing of any such registration statements. We believe that the $11,321 not held in trust as of September 30, 2012, supplemented with loans from SCG Financial Holdings LLC, will be sufficient to allow us to operate until January 12, 2013, the date by which we must consummate an Initial Business Combination. Over this time period, we will be using these funds for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the property and asset locations of prospective target businesses, reviewing corporate, title, environmental, financial documents and material agreements regarding prospective target businesses, audit fees and structuring, negotiating and consummating the business transaction.

 

Going Concern Consideration

 

The Company’s Sponsor, officers and directors have agreed that the Company will have until January 12, 2013 to consummate an Initial Business Combination and one three month extension subject to (i) a signed letter of intent to consummate its Initial Business Combination by January 12, 2013 (and an Initial Business Combination relating thereto has not been consummated) and (ii) the approval of at least 65% of the holders of the Company’s common stock. If the Company does not consummate an Initial Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up, (ii) redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including a portion of the interest earned thereon which was not previously used for working capital (less up to $100,000 of such net interest to pay dissolution expenses), but net of any taxes (which redemption would completely extinguish such holders’ rights as stockholders, including the right to receive further liquidation distributions, if any) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation. This mandatory liquidation and subsequent dissolution raises doubt about the Company’s ability to continue as a going concern.

 

15
 

 

We do not believe we will need to raise additional funds until the consummation of our Initial Business Combination to meet the expenditures required for operating our business. However, we may need to raise additional funds through a private offering of debt or equity securities if such funds are required to consummate a business transaction that is presented to us. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our Initial Business Combination.

 

We have evaluated the appropriate accounting treatment for the Sponsor Warrants and the warrants attached to the public Units. As we are not required to net-cash settle such warrants under any circumstances, including when we are unable to maintain sufficient registered shares to settle such warrants, the terms of the warrants satisfy the applicable requirements of FASB ASC 815, which provides guidance on identifying those contracts that should not be accounted for as derivative instruments, in accordance with FASB ASC 815. Accordingly, we intend to classify such instruments within permanent equity as additional paid-in capital.

 

We believe the purchase price of the Sponsor Warrants was greater than the fair value of such warrants when purchased.  Therefore, we will not be required to incur a compensation expense in connection with the purchase by our Sponsor of the Sponsor Warrants.

 

Off-balance sheet arrangements:

 

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial assets.

 

Contractual obligations:

 

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than a monthly fee of $7,500 payable to Sachs Capital Group, LP, an affiliate of the Sponsor, for office space and secretarial and administrative expenses, with up to an additional $7,500 for other operating expenses incurred by the Sponsor on behalf of the Company. We began incurring these fees on April 18, 2011 (the date the Company’s securities were first quoted on the OTCBB). This agreement will expire upon the earlier of: (a) the successful completion of the Company’s Initial Business Combination, (b) January 12, 2013 (plus one 3 month extension subject to (i) a signed letter of intent and (ii) approval of at least 65% of the holders of the Company’s common stock), or (c) the date on which the Company is dissolved and liquidated.

 

Critical Accounting Policies

 

The preparation of interim financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the interim financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:

 

Loss per common share:

 

Loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period.

 

16
 

 

Recent accounting pronouncements:

 

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s interim financial statements.

 

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

 

The net proceeds of our Offering that were put in the Trust Account have been invested, as provided in the Company’s registration statement.  The Company is permitted to invest the proceeds of the Trust Account in U.S. “government securities,” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 (the “1940 Act”) with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the 1940 Act.  The Trust Account assets will be maintained until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account.   Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures:

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2012. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

 

Changes in Internal Control:

 

During the most recently completed fiscal quarter, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

 

17
 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None

 

ITEM 1A.  RISK FACTORS

 

Factors that could cause the Company’s actual results to differ materially from those in this Report are any of the risks described in our Annual Report, which is incorporated herein by reference. Any of these factors could result in a significant or material adverse effect on the Company’s results of operations or financial condition. Additional risk factors not presently known to the Company or that the Company currently deems immaterial may also impair its business or results of operations.

 

Other than as stated below, as of the date of this Report, there have been no material changes to the risk factors disclosed in the Company’s Annual Report, except the Company may disclose changes to such factors or disclose additional factors from time to time in its future filings with the SEC.

 

Our common stock may not continue to be listed on Nasdaq in the future, which could limit investors’ ability to make transactions in our common stock and subject us to additional trading restrictions.

 

Although our common stock is currently listed on Nasdaq, a national securities exchange, we cannot assure you that our common stock will continue to be listed on the Nasdaq in the future. Additionally, in connection with our Initial Business Combination, we believe Nasdaq will require us to file a new initial listing application and meet its initial listing requirements, as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time.

 

If Nasdaq delists our securities, we could face significant material adverse consequences, including:

 

limited availability of market quotations for our common stock;
   
reduced liquidity with respect to our common stock;
   
determination that our common stock is a “penny stock”, which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market;
   
a limited amount of news and analyst coverage for our Company; and
   
a decreased ability to issue additional shares of common stock or obtain additional financing in the future.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4.  MINE SAFETY DISCLOSURES

 

Not applicable

 

ITEM 5. OTHER INFORMATION

 

None

 

18
 

 

ITEM 6.EXHIBITS.

 

(a)Exhibits.

 

Exhibit
Number

 

Description

31.1*   Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2*   Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1*   Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2*   Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
101.INS**   XBRL Instance Document
101.SCH**   XBRL Taxonomy Extension Schema Document
101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document               
101.DEF**   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**   XBRL Taxonomy Extension Label Linkbase Document
101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith.

 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

19
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date:  November 9, 2012   SCG Financial Acquisition Corp.
     
  By: /s/ Gregory H. Sachs
    Gregory H. Sachs
    Chief Executive Officer
     
  By: /s/ Michelle Sibley
    Michelle Sibley
    Chief Financial Officer

 

20