Attached files
file | filename |
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EX-10.1 - EX-10.1 - Chart Acquisition Corp. | fs12012a9ex10i_chart.htm |
EX-10.2 - EX-10.2 - Chart Acquisition Corp. | fs12012a9ex10ii_chart.htm |
EX-3.3 - EX-3.3 - Chart Acquisition Corp. | fs12012a9ex3iii_chart.htm |
EX-10.6 - EX-10.6 - Chart Acquisition Corp. | fs12012a9ex10vi_chart.htm |
EX-10.11 - EX-10.11 - Chart Acquisition Corp. | fs12012a9ex10xi_chart.htm |
EX-10.7 - EX-10.7 - Chart Acquisition Corp. | fs12012a9ex10vii_chart.htm |
EX-10.3 - EX-10.3 - Chart Acquisition Corp. | fs12012a9ex10iii_chart.htm |
EX-5.1 - EX-5.1 - Chart Acquisition Corp. | fs12012a9ex5i_chart.htm |
EX-1.1 - EX-1.1 - Chart Acquisition Corp. | ex1i.htm |
EX-4.4 - EX-4.4 - Chart Acquisition Corp. | ex4iv.htm |
EX-23.1 - EX-23.1 - Chart Acquisition Corp. | d29918_ex23-1.htm |
EX-10.10 - EX-10.10 - Chart Acquisition Corp. | fs12012a9ex10x_chart.htm |
EX-10.5 - EX-10.5 - Chart Acquisition Corp. | fs12012a9ex10v_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. |
PRELIMINARY PROSPECTUS
(Subject to Completion) |
Dated November 20, 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 Chart Acquisition Corp. |
$ | 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 130. |
Deutsche Bank
Securities |
Cowen and Company | ||||||||||
Mitsubishi UFJ
Securities |
Page |
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130 | ||||||
134 | ||||||
Experts
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134 | |||||
135 | ||||||
F-1 |
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references to we, us, company or our company refer to Chart Acquisition Corp.; |
|
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; |
|
references to Cowen Overseas are to Cowen Overseas Investment LP, a Cayman Islands limited partnership and an affiliate of Cowen and Company, LLC, one of the representatives of the underwriters of this offering; |
|
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; |
|
references to initial holders are to Joseph Wright, Cowen Overseas and our sponsor, each of whom is purchasing placement units in the private placement, and who, collectively, have committed to commence a warrant tender offer to purchase up to 50% of the outstanding public warrants in connection with our initial business combination; |
|
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); |
|
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; |
|
references to private placement refers to the private placement of 231,250 placement units being purchased by our sponsor, 12,500 placement units being purchased by Joseph Wright and 131,250 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 $3,750,000; |
|
references to placement units are to an aggregate of 375,000 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 375,000 shares of our common stock included within the placement units being purchased separately by our initial holders; |
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references to placement warrants are to warrants to purchase an aggregate of 375,000 shares of our common stock included within the placement units being purchased separately by our initial holders in the private placement, and which will not be tendered in the proposed warrant tender offer; and |
|
references to tendered public warrants are to the up to 3,750,000 public warrants that our sponsor, Joseph Wright and Cowen Overseas or their designees have agreed, collectively, to offer to purchase at $0.60 per warrant pursuant to a proposed tender offer that would commence after our announcement of our initial business combination and would be completed upon the consummation of such initial business combination, and does not include any placement warrants, which the sponsor, Joseph Wright and Cowen Overseas have agreed not to tender in the tender offer. |
will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able independently to determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, with respect to the satisfaction of such criteria. 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).
|
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 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. |
we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
investment market participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions.
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 |
375,000 |
Number of
units to be outstanding after this offering and the private placement |
7,875,000 |
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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 |
9,750,000 (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 |
7,875,000 (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 375,000 private placement units, each unit consisting of one placement share and one placement warrant. Our initial stockholders and Cowen Overseas will hold 21.7% and 1.3%, 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, Placement Units (including securities contained therein) and Tendered Public Warrants). |
(4) |
Includes 375,000 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 (including any tendered public 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; provided that warrants held by Cowen Overseas will expire not later than five years
after the date of this prospectus. 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 or
tendered public 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 |
if, and only if, the last sale price of our common stock (or the closing bid price of our common stock in the event the
shares of common stock are not traded on any specific trading day) 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. |
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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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None
of the placement warrants or tendered public 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 890,625 shares to The Chart Group, L.P., the sole managing
member of our sponsor. Subsequently in January 2012, The Chart Group, L.P. transferred, an aggregate of 525,469 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. |
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 21.7% of our issued and outstanding shares of common stock after this offering (which includes 1,875,000 founder shares and 243,750
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 |
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. |
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Transfer
restrictions on founder shares |
Each of our initial stockholders has 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, Placement Units (including securities
contained therein) and Tendered Public Warrants 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, Placement
Units (including securities contained therein) and Tendered Public Warrants) 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. |
Placement
Units |
Our
sponsor has committed to purchase 231,250 placement units, Joseph Wright, our chief executive officer and chairman of the board, has committed
to purchase 12,500 placement units and Cowen Overseas Investment LP, an affiliate of Cowen and Company, LLC, one of the
representatives of the underwriters of this offering, has committed to purchase 131,250 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 ($3.750 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 our sponsor, Mr. Wright or Cowen
Overseas or their permitted transferees (except as described herein under Principal StockholdersTransfers of Founder Shares,
Placement Units (including securities contained therein) and Tendered Public Warrants); provided that Cowen Overseas will not
in any event be permitted to sell any placement units (including the component securities therein) or any tendered public warrants it purchases
prior to the date 180 days immediately following the date on which the registration statement of which this prospectus forms a part is declared
effective. 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. |
Proceeds to be
held in trust account |
$75.0 million, or $10.00 per public share of the proceeds of this offering together with all the proceeds of the private
placement of the placement units (approximately $85.9 million, or approximately $9.96 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 $0.05. |
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We
may increase the initial amount held in the trust account from approximately $10.00 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 $925,000 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. |
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 $925,000 in working capital after the
payment of approximately $762,500 in expenses relating to this offering (not including underwriting discounts). |
||||||
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. However, we will not make any such purchase
if the effect thereof would reduce the per share amount in the trust account to less than $10.00 per share ($9.96 if the
underwriters overallotment option is exercised in full). |
||||||
Warrant
tender offer |
Our sponsor, Chart Acquisition Group LLC, Joseph Wright, our chairman and chief executive officer, and Cowen Overseas Investment LP,
an affiliate of Cowen and Company, LLC, one of the lead underwriters in this offering, have collectively committed to offer to purchase
up to 3,750,000 of our issued and outstanding warrants at a purchase price of $0.60 per warrant in a proposed tender offer that would
commence after our announcement of our initial business combination and would close upon the consummation of such initial business combination.
At the time of the proposed tender offer, each of our sponsor, Mr. Wright and Cowen Overseas will hold placement warrants and has agreed
not to tender such placement warrants in the proposed tender offer. Through the warrant tender offer, our sponsor, Mr. Wright and Cowen
Overseas will collectively offer to purchase up to 50% of the warrants sold as part of the units in this offering, without giving effect
to any exercise of the underwriters over-allotment option. The warrant tender offer will not be conditioned upon any minimum number of
warrants being tendered, but will only be consummated upon, and simultaneously with, the consummation of our business
combination. |
Upon the consummation of this offering, our sponsor, Mr. Wright and Cowen Overseas will deposit an aggregate of $2,250,000
with Continental Stock Transfer & Trust Company, as escrow agent, into a segregated escrow account (representing $0.60 per warrant for up
to 3,750,000 warrants) to fund the warrant tender offer. The funds held in the escrow account will be invested only in United States
treasuries or in money market funds that invest solely in United States treasuries with a maturity of 180 days or
less. |
||||||
If
we are unable to consummate our initial business combination within the allotted time, holders of our outstanding public warrants will receive a
pro-rata portion of the proceeds on deposit in this escrow account as promptly as reasonably possible but no more than five business days
thereafter, after which time all such warrants will expire worthless. |
||||||
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
$10.00 per public share (or approximately $9.96 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. However, our sponsor, Mr.
Wright and Cowen Overseas have agreed to offer to purchase, collectively, up to 3,750,000 warrants at $0.60 per warrant in a proposed tender
offer to be commenced in connection with our initial business combination, as described above. 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 13% 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 13% 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 13% 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 13% 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 September 30, 2012 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
As Adjusted |
||||||||||
Balance
Sheet Data: |
|||||||||||
Working
capital (deficiency) |
$(154,259 | ) | $73,602,543 | ||||||||
Total
assets |
206,293 | 75,946,293 | |||||||||
Total
liabilities |
185,000 | 2,343,750 | |||||||||
Value of
common stock that may be redeemed in connection with our initial business combination (approximately $10.00 per share) |
| 68,602,541 | |||||||||
Stockholders equity(1) |
21,293 | 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.
Nasdaqs continued listing rules, if the number of our public holders falls below 300, we will be non-compliant with Nasdaqs continued listing rules and our securities would be de-listed.
interest earned on funds held in the trust account to us, unless and until the funds in the trust account were released to us in connection with our consummation of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see Proposed BusinessComparison of This Offering to Those of Blank Check Companies Subject to Rule 419.
least the next 21 months; however, we cannot assure you of this. We could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a no-shop provision (a provision in letters of intent designed to keep target businesses from shopping around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we are unable to fund such down payments or no shop 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.
the sale proceeds of the private placement ($3,750,000) will be spread pro rata across a greater number of public shares, which will reduce the per-share amount payable to each public stockholder. Assuming a 20% increase in the size of this offering, the per-share redemption or liquidation amount could decrease by as much as approximately $0.05.
reserve for such indemnification obligations and we cannot assure you that Messrs. Wright and Brady would be able to satisfy those obligations. With the exception of Messrs. Wright and Brady as described above, none of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
|
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. |
be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholders pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. 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 beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not consummate our 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.
managements expertise related to that industry would not be directly applicable to its evaluation or operation, and the information contained herein regarding the government services industry might not be relevant to an understanding of the business that we elect to acquire.
|
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. |
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. The personal and financial interests of certain of our officers and directors, directly or as members of our sponsor, may influence their motivation in identifying and selecting a target business combination and completing an initial business combination. Consequently, the discretion of our officers and directors, in identifying and selecting a suitable target business combination may result in a conflict of interest when determining whether the terms, conditions and timing of a particular initial business combination are appropriate and in the best interest of our public stockholders.
|
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; |
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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; |
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our inability to pay dividends on our common stock; |
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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; |
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
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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; |
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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; |
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cultural and language differences; |
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employment regulations; |
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crime, strikes, riots, civil disturbances, terrorist attacks and wars; and |
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deterioration of political relations with the United States. |
of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. The current economic environment has made it especially difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to consummate our initial business combination, we would be compelled to either restructure the transaction or abandon that particular initial business combination and seek an alternative target business candidate. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.00 per share (or approximately $9.96 per share if the underwriters overallotment option is exercised in full) on our redemption. In addition, even if we do not need additional financing to consummate our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after a business combination.
offering except that, (i) so long as they are held by the initial holders or their permitted transferees, (a) they will not be redeemable by us, (b) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions (as described in more detail below under Principal StockholdersTransfers of Founder Shares, Placement Units (including securities contained therein) and Tendered Public Warrants), be transferred, assigned or sold by the holders until 30 days after the consummation of our initial business combination and (c) they may be exercised by the holders on a cashless basis, and (ii) the placement warrants which form a part of the placement units issued to Cowen Overseas, so long as they are held by Cowen Overseas or any of its related persons under FINRA rules, will expire five years from the effective date of the registration statement of which this prospectus forms a part, or earlier upon our liquidation, whereas any placement warrants held by holders other than Cowen Overseas or any of its related persons under FINRA rules, will expire five years from the consummation of our initial business combination, or earlier upon our liquidation.
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the history and prospects of companies whose principal business is the acquisition of other companies; |
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prior offerings of those companies; |
|
our prospects for acquiring an operating business at attractive values; |
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a review of debt to equity ratios in leveraged transactions; |
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our capital structure; |
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an assessment of our management and their experience in identifying operating companies; |
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general conditions of the securities markets at the time of this offering; and |
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other factors as were deemed relevant. |
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a limited availability of market quotations for our securities; |
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reduced liquidity for our securities; |
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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; |
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a limited amount of news and analyst coverage; and |
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a decreased ability to issue additional securities or obtain additional financing in the future. |
America, or GAAP, and the historical financial statements must be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and consummate our initial business combination within our 21 month time frame.
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and our share price may be more volatile. See Managements Discussion and Analysis Results of Operations and Known Trends or Future Events for a further discussion of this extended transition period.
technologies, and the emergence of new industry standards and practices could render the existing products of the business we acquire obsolete. Our success will depend, in part, on our ability to:
|
enhance products and services; |
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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. |
|
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. |
amount of such insurance will be sufficient to fully indemnify us against liabilities arising out of pending and future claims and litigation. The insurance will have deductibles or self-insured retentions and will contain certain coverage exclusions. The insurance will not cover damages from breach of contract by us or based on alleged fraud or deceptive trade practices. Insurance and customer agreements do not provide complete protection against losses and risks, and our financial condition and results of operations could be adversely affected by unexpected claims not covered by insurance. Furthermore, our target business, if engaged in the sale of so-called anti-terrorism technologies, may not be able to avail itself of the liability protections intended to be afforded by the Support Anti-Terrorism by Fostering Effective Technologies Act of 2002, or the SAFETY Act.
|
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. |
customers and may impose added costs on their business. For example, our target business or parties with which it does business will likely be subject to the Federal Acquisition Regulations and all supplements (including those issued by the Department of Homeland Security), 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. If a government review or investigation uncovers improper or illegal activities, our target business may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or debarment from doing business with federal government agencies, which could materially adversely affect our target businesss operations, prospects, financial condition or operating results. In addition, our target business or parties with which it does business will likely be subject to industrial security regulations of the Department of Defense and other federal agencies that are designed to safeguard against foreign access to classified information. We may also be liable for systems and services failure and security breaks with respect to the solutions, services, products, or other applications we sell to the government. 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 our target businesss ability to obtain new contracts.
|
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. |
|
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 |
3,750,000 | 3,750,000 | ||||||||
Total gross
proceeds |
$78,750,000 | $90,000,000 | ||||||||
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 |
45,000 | 45,000 | ||||||||
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 |
50,000 | 50,000 | ||||||||
Travel and
roadshow |
30,000 | 30,000 | ||||||||
Directors and
officers insurance |
250,000 | 250,000 | ||||||||
Miscellaneous
expenses |
67,321 | 67,321 | ||||||||
Total
offering expenses |
$2,825,000 | $3,134,375 | ||||||||
Proceeds
after offering expenses |
$75,925,000 | $86,865,625 | ||||||||
Held in trust
account |
75,000,000 | 85,940,625 | ||||||||
% of
public offering proceeds held in trust(4) |
100 | % | 99.6 | % | ||||||
Not held in
trust account |
$925,000 | $925,000 |
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) |
$170,363 | 18.2 | % | |||||||
Legal and
accounting expenses attendant to the due diligence investigations, structuring and negotiations of an initial business combination |
402,137 | 37.4 | % | |||||||
Legal and
accounting fees relating to SEC reporting obligations |
150,000 | 13.9 | % | |||||||
Administrative services and support payable to an affiliate of our sponsor (up to $10,000 per month for up to 21 months) |
210,000 | 19.5 | % | |||||||
Reserve for
liquidation expenses |
30,000 | 2.8 | % | |||||||
Nasdaq
continued listing fees |
48,125 | 4.5 | % | |||||||
Other
miscellaneous expenses |
39,375 | 3.7 | % | |||||||
Total |
$1,025,000 | 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. 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 the net proceeds of the offering (being $71,250,000 of the net proceeds from this offering, including deferred underwriting commissions of approximately $2.34 million (or $82,190,625 of the net proceeds from this offering, including deferred underwriting commissions of approximately $2.7 million, if the underwriters overallotment option is exercised in full)), will be placed in a trust account located in the United States 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 $100,000 (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 0.17% 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. |
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).
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 |
$(0.07 | ) | ||||||||
Increase
attributable to new investors |
1.80 | |||||||||
Pro forma net
tangible book value after this offering |
1.73 | |||||||||
Dilution to
new investors |
$8.27 |
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 |
375,000 | 4 | %(2) | 3,750,000 | 5 | % | $ | 10.00 | ||||||||||||||
Public
stockholders |
7,500,000 | 77 | % | 75,000,000 | 95 | % | $ | 10.00 | ||||||||||||||
Total |
9,750,000 | 100 | % | $78,775,000 | 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 |
$(154,259 | ) | ||||
Net proceeds
from this offering and sale of placement units |
75,925,000 | |||||
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 |
175,552 | |||||
Less:
Deferred underwriting commission |
(2,343,750 | ) | ||||
Less:
Proceeds held in the trust account which may be redeemed for cash |
(68,602,541 | ) | ||||
$ | 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 |
375,000 | |||||
Less: Shares
subject to forfeiture assuming no overallotment option exercised |
(281,250 | ) | ||||
Less: Shares
subject to redemption to maintain net tangible assets of $5,000,001(2) |
(6,860,254 | ) | ||||
$2,889,746 |
(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: $68,602,541 (assuming the redemption threshold is $5,000,001) divided by redemption value per share ($10.00); redemption value per share is computed as follows: Proceeds held in the trust account ($75,000,000) divided by total public shares (7,500,000). |
September 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) |
| 68,602,541 | |||||||||
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; 9,750,000 shares issued and outstanding, as adjusted
(includes 6,860,321 shares subject to redemption)(5) |
216 | 975 | (4) | ||||||||
Additional
paid-in capital |
24,784 | 5,002,734 | |||||||||
Deficit
accumulated during the development stage |
(3,707 | ) | (3,707 | ) | |||||||
Total
stockholders equity |
21,293 | 5,000,002 | |||||||||
Total
capitalization |
$196,293 | $75,946,293 |
(1) |
Includes the $3.750 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 December 31, 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. |
Further, we 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.
the trust account. 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.
|
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. |
transferees. The placement warrants may also be exercised by the initial holders, or their permitted transferees, for cash or on a cashless basis. In addition, the placement warrants which form a part of the placement units issued to Cowen Overseas, so long as they held by Cowen Overseas or any of its related persons under FINRA rules, will expire five years from the effective date of the registration statement of which this prospectus forms a part, or earlier upon our liquidation, instead of five years from the consummation of our initial business combination, or earlier upon our liquidation. Other than as stated above, the placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. The tendered warrants will have the same features as the placement warrants, so long as they are held by our sponsor, Mr. Wright and Cowen Overseas or their permitted transferees.
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 |
|
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. |
|
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 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. |
|
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. |
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.
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 the 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.
Wright before our entering into an agreement with such third party. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver and where Messrs. Brady and Wright execute a written consent. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, pursuant to a written agreement, Messrs. Wright and Brady, our Chairman and Chief Executive Officer, and President and Director, respectively, have agreed that they will be jointly and severally liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a definitive transaction agreement, reduce the amounts in the trust account to below $10.00 per share (or approximately $9.96 per share if the underwriters overallotment option is exercised in full), except as to any claims by a third party who executed a waiver of rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, Messrs. Wright and Brady will not be responsible to the extent of any liability for such third party claims. We cannot assure you, however, that, Messrs. Wright and Brady would be able to satisfy those obligations. With the exception of Messrs. Wright and Brady as described above, none of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholders pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a preferential transfer or a fraudulent conveyance. As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
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 $10.00 per public share, or approximately $9.96 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 $10.00
per public share, or approximately $9.96 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 | ||||||||||||
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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
$75.0 million of the net offering proceeds, which includes a portion of the approximately $3.750 million net proceeds from the sale of
231,250 placement units to the sponsor, 12,500 to Joseph Wright and 131,250 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 in the United States with Continental Stock Transfer & Trust Company, acting as
trustee. |
Approximately
$72.7 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
$75.0 million of the net offering proceeds, which includes a portion of the approximately $3.750 million net proceeds from the sale of
231,250 placement units to the sponsor, 12,500 placement units to Joseph Wright and 131,250 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. |
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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 | |||||||||
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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. |
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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. |
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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. |
||||||||||
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 |
||||||||||||
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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 | ||||||||||||
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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 | ||||||||||||
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Limited
Redemption of 13% 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 13% 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. |
|||||||||||
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 | ||||||||||||
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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 | ||||||||||||
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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 |
74 | Chairman and Chief Executive Officer |
||||||||
Christopher D.
Brady |
58 | President and Director |
||||||||
Michael
LaBarbera |
63 | Chief
Financial Officer, Secretary |
||||||||
Peter A.
Cohen |
65 | Director |
||||||||
Governor
Thomas Ridge |
67 | Director |
||||||||
Senator Joseph
Robert Bob Kerrey |
69 | Director |
||||||||
Timothy N.
Teen |
48 | Director |
||||||||
Manuel D.
Medina |
60 | Director |
affiliates have invested. Mr. Brady serves as the Chairman for Chart Capital Partners I, II and Chart Venture Partners. Mr. Brady served as a member of the Transition Team for the United States Army Secretary Dr. Francis Harvey 2004-2005. Mr. Brady earned his B.A. from Middlebury College and his M.B.A. from 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.
and local government and raising awareness of their products and services that are relevant to government markets. As twice-elected Governor of Pennsylvania, he has championed issues such as health care and the environment. As Secretary of the Department of Homeland Security, he formed a new agency from 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; |
|
reviewing and approving all related-party transactions; |
|
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; |
|
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 890,625 shares to The Chart Group, L.P., the sole managing member of our sponsor. Subsequently in January 2012, The Chart Group, L.P. transferred an aggregate of 525,469 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 375,000 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, Placement Units (including |
securities contained therein) and Tendered Public Warrants), 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. |
litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholders investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
|
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 |
1,487,031 | (4) | 58.7 | % | 1,288,750 | 13.2 | % | ||||||||||||
The Chart
Group L.P. |
1,487,031 | (4) | 58.7 | % | 1,288,750 | 13.2 | |||||||||||||
Joseph
Wright |
237,500 | (5) | 9.4 | % | 237,500 | 2.4 | |||||||||||||
Christopher
D. Brady |
1,616,172 | (4) | 63.8 | % | 1,397,500 | 14.3 | |||||||||||||
Michael
LaBarbera |
102,422 | 4.0 | % | 86,250 | * |
||||||||||||||
Governor
Thomas Ridge |
37,500 | (6) | 1.5 | % | 37,500 | * |
|||||||||||||
Senator
Joseph Robert Kerrey |
37,500 | (6) | 1.5 | % | 37,500 | * |
|||||||||||||
Timothy N.
Teen |
37,500 | (6) | 1.5 | % | 37,500 | * |
|||||||||||||
Peter A.
Cohen |
131,250 | (7) | 5.2 | % | 131,250 | 1.3 | |||||||||||||
Manuel D.
Medina |
37,500 | (6) | 1.5 | % | 37,500 | * |
|||||||||||||
Cowen
Overseas Investment LP |
131,250 | (7) | 5.2 | % | 131,250 | 1.3 | |||||||||||||
Kendall
Family Investments |
1,103,125 | (8) | 43.6 | % | 962,500 | 9.9 | |||||||||||||
All
directors and officers as a group (8 persons) |
2,237,344 | 88.4 | % | 2,002,500 | 20.5 | % |
* |
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 375,000 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 1,487,031 shares composed of 1,255,781 founder shares and 231,250 placement shares. The Chart Group L.P., through its membership interest in the sponsor, is the indirect holder of 365,156 founder shares and 18,750 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 1,487,031 shares composed of 1,255,781 founder shares and 231,250 placement shares, held by our sponsor. Mr. Brady directly holds 129,141 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 237,500 shares composed of 225,000 founder shares and 12,500 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 date on which the registration statement of which this prospectus forms a part is declared effective. 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, 19 th 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 1,103,125 shares composed of 212,500 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.
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, including the component securities therein, and tendered public warrants, 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 immediately following the date on which the registration statement of which this prospectus forms a part is declared effective.
under FINRA rules, are subject to a minimum lock-up of 180 days from the effective date of the registration statement of which this prospectus forms a part. If we do not complete an initial business combination that meets the criteria described in this prospectus, the portion of the $3,750,000 purchase price 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 21.7% and Cowen Overseas will own 1.3% 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.)
2012 or the closing of this offering. We intend to repay these loans from the proceeds of this offering not placed in the trust account.
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.
as a condition to such transfer, to waive these same redemption rights. Also, Cowen Overseas has committed to purchase 131,250 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 (or the closing bid price of our common stock in the event shares of our common stock are not traded on any specific day) 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. |
shares of common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of common stock so purchasable immediately thereafter.
redemption, and (ii) the placement warrants which form a part of the placement units issued to Cowen Overseas, or tendered public warrants acquired by Cowen Overseas, so long as they are held by Cowen Overseas or any of its related persons under FINRA rules, will expire five years from the effective date of the registration statement of which this prospectus forms a part, or earlier upon our liquidation, whereas any placement warrants or tendered public warrants held by holders other than Cowen Overseas or any such related person will expire five years from the consummation of our initial business combination, or earlier upon our liquidation. A portion of the proceeds from the sale of the placement warrants will be held in our trust account for the benefit of our public stockholders. If we do not complete one or more business combinations as described in this prospectus, the placement warrants will become worthless.
|
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 975,000 shares immediately after this offering (or 1,115,625 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 |
|||||
---|---|---|---|---|---|---|
Deutsche
Bank Securities Inc. |
||||||
Cowen and
Company, LLC |
||||||
Mitsubishi
UFJ Securities (USA), Inc. |
||||||
Total
|
7,500,000 |
determination of our per unit offering price was more arbitrary than would typically be the case if we were an 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.
Per Unit |
Without Exercise of the Overallotment Option |
With Exercise of Overallotment Option |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Public
offering price |
$ | 10.00 | $ | 75,000,000 | $86,250,000.00 | |||||||||
Underwriting
discount(1) |
0.275 | 2,062,500 | 2,371,875.00 | |||||||||||
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 $762,500, 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. |
prospectus to the public in that relevant member state prior to the publication of a prospectus in relation to the units that has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive, except that, with effect from and including the relevant implementation date, it may make an offer of our units to the public in that relevant member state at any time:
|
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 representatives 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-13 |
|||||
Chart Acquisition Corp.
/s/
Rothstein Kass Rothstein Kass |
November 19, 2012
(a development stage company)
September 30, 2012 (Unaudited) |
December 31, 2011 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ASSETS |
|||||||||||
Current
Assets: |
|||||||||||
Cash
|
$30,332 | $ | 70,274 | ||||||||
Due from
Sponsor |
409 | 409 | |||||||||
Non-current
Assets: |
|||||||||||
Deferred
Offering Costs |
175,552 | 154,042 | |||||||||
Total Assets
|
$206,293 | $ | 224,725 | ||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
|||||||||||
Current
Liabilities: |
|||||||||||
Accounts
Payable and Accrued Expenses |
$10,000 | $ | 25,252 | ||||||||
Note Payable,
Sponsor |
175,000 | 175,000 | |||||||||
Total Current
Liabilities |
185,000 | 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 |
(3,707 | ) | (527 | ) | |||||||
Total
Stockholders Equity |
21,293 | 24,473 | |||||||||
Total
Liabilities and Stockholders Equity |
$206,293 | $ | 224,725 |
(a development stage company)
Nine Months Ended September 30, 2012 (Unaudited) |
July 22, 2011 (date of inception) to September 30, 2011 (Unaudited) |
July 22, 2011 (date of inception) to December 31, 2011 |
July 22, 2011 (date of inception) to September 30, 2012 (Unaudited) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenue
|
$ | | $ | | $ | | $ | | ||||||||||
Formation and
operating costs |
(3,180 | ) | (461 | ) | (527 | ) | (3,707 | ) | ||||||||||
Net Loss
Attributable to Common Stockholders |
(3,180 | ) | (461 | ) | (527 | ) | (3,707 | ) | ||||||||||
Weighted
Average Number of Common Shares Outstanding, basic and diluted |
2,156,250 | 2,156,250 | 2,156,250 | 2,156,250 | ||||||||||||||
Basic and
Diluted Net Loss |
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
(a development stage company)
For the Period from July 22, 2011 (date of inception) to September 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) |
| | | (3,180 | ) | (3,180 | ) | |||||||||||||||
Balance,
September 30, 2012 (unaudited) |
2,156,250 | $ | 216 | $ | 24,784 | $(3,707 | ) | $21,293 |
(a development stage company)
Nine Months Ended September 30, 2012 (Unaudited) |
July 22, 2011 (date of inception) to September 30, 2011 (Unaudited) |
July 22, 2011 (date of inception) to December 31, 2011 |
July 22, 2011 (date of inception) to September 30, 2012 (Unaudited) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash
Flows from Operating Activities |
||||||||||||||||||
Net
Loss |
$ | (3,180 | ) | $ | (461 | ) | $ | (527 | ) | $ | (3,707 | ) | ||||||
Adjustment
to reconcile net loss to net cash used in operating activities: |
||||||||||||||||||
Change in
operating assets and liabilities: |
||||||||||||||||||
Accounts
payable and accrued expenses |
835 | |||||||||||||||||
Due from
Sponsor |
| (409 | ) | (409 | ) | (409 | ) | |||||||||||
Net Cash
Used in Operating Activities |
(3,180 | ) | (35 | ) | (936 | ) | (4,116 | ) | ||||||||||
Cash
Flows from Financing Activities |
||||||||||||||||||
Deferred
Offering Costs |
(36,762 | ) | | (128,790 | ) | (165,552 | ) | |||||||||||
Proceeds
from Note Payable, Sponsor |
| 175,000 | 175,000 | 175,000 | ||||||||||||||
Proceeds
from Sale of Common Stock to Sponsor |
| 25,000 | 25,000 | 25,000 | ||||||||||||||
Net Cash
Provided by (Used in) Financing Activities |
(36,762 | ) | 200,000 | 71,210 | 34,448 | |||||||||||||
Net
increase(decrease) in Cash |
(39,942 | ) | 199,965 | 70,274 | 30,332 | |||||||||||||
Cash at
Beginning of the Period |
70,274 | | | | ||||||||||||||
Cash at
Ending of the Period |
$ | 30,332 | $ | 199,965 | $ | 0,274 | $ | 30,332 | ||||||||||
Supplemental Disclosure for Non-cash Financing Activities |
||||||||||||||||||
Accrued
expenses included in Deferred Offering Costs |
$ | 10,000 | $ | 57,077 | $ | 25,252 | $ | 10,000 |
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to September 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to September 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to September 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to September 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to September 30, 2012
warrants shall not be entitled to exercise such warrants (except on a cashless basis under certain circumstances) and in no event (whether in the case of a registration statement not being effective or otherwise) will the Company be required to net cash settle the warrants and the warrants will expire worthless.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to September 30, 2012
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Period from July 22, 2011 (date of inception) to September 30, 2012
PROSPECTUS
Deutsche Bank
Securities Cowen and Company Mitsubishi UFJ Securities |
SEC filing
fee |
13,179 | |||||
FINRA filing
fee |
12,000 | |||||
Accounting
fees and expenses |
45,000 | |||||
Printing and
engraving expenses |
45,000 | |||||
Legal fees
and expenses |
250,000 | |||||
NASDAQ
Capital Market fees |
50,000 | |||||
Travel and
roadshow |
30,000 | |||||
Directors and
officers insurance |
250,000 | |||||
Miscellaneous
expenses(1) |
67,321 | |||||
Total |
$762,500 |
(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, transfer agent fees, warrant agent fees and trustee fees. |
(including attorneys fees) actually and reasonably incurred by the person in connection with the defense or 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 |
November 20, 2012 |
||||||||
Joseph R.
Wright |
Chairman
of the Board |
|||||||||
/s/ CHRISTOPHER D. BRADY |
President
and Director |
November 20, 2012 |
||||||||
Christopher D.
Brady |
||||||||||
/s/ MICHAEL LABARBERA* |
Principal
Accounting and Financial |
November 20, 2012 |
||||||||
Michael
LaBarbera |
Officer,
Secretary |
|||||||||
/s/ GOVERNOR THOMAS RIDGE* |
Director |
November 20, 2012 |
||||||||
Governor Thomas
Ridge |
||||||||||
/s/ SENATOR JOSEPH ROBERT* BOB
KERREY |
Director |
November 20, 2012 |
||||||||
Senator Joseph
Robert Bob Kerrey |
||||||||||
/s/ PETER A. COHEN* |
Director |
November 20, 2012 |
||||||||
Peter A.
Cohen |
||||||||||
/s/ TIMOTHY N. TEEN* |
Director |
November 20, 2012 |
||||||||
Timothy N.
Teen |
||||||||||
/s/ MANUEL D. MEDINA |
Director |
November 20, 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 | Second Amended and Restated Promissory Note, dated as of September 30, 2012 issued to Chart Acquisition Group LLC in the amount
of $175,000. |
|||||
10.6 | Third Amended and Restated Placement Unit Subscription Agreement between the Registrant and Sponsor. |
|||||
10.7 | Third 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 | Second Amended and Restated Placement Unit Subscription Agreement between the Registrant and Joseph Wright. |
|||||
10.11 | Form of Escrow Agreement among Sponsor, Joseph Wright, Cowan Overseas, Continental Stock Transfer & Trust Company and Cowan and
Company, LLC. |
|||||
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.* |
|||||
99.1 | Audit
Committee Charter.* |
* |
Previously filed. |