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Delaware		6770		51-0668263
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

 

 

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		Stephen E. Older, Esq.
Raymond B. Check, Esq.		Joel L. Rubinstein, Esq.
Cleary Gottlieb Steen & Hamilton LLP		McDermott Will & Emery LLP
One Liberty Plaza		340 Madison Avenue
New York, New York 10006		New York, New York 10173
(212) 225-2000		(212) 547-5400
Fax: (212) 225-3999		Fax: (212) 547-5444

 

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Title of Each Class of Security Being Registered		Amount Being Registered			Proposed Maximum Offering Price Per Security(1)			Proposed Maximum Aggregate Offering Price(1)			Amount of Registration Fee
Units, each consisting of one share of common stock, $0.0001 par value, and one warrant(2)			17,250,000 units		$	10.00		$	172,250,000		$	6,770
Common stock included in the units			17,250,000 shares			—						—	(3)
Warrants included in the units(4)			17,250,000 warrants			—						—	(3)

 

(1)	Estimated solely for the purpose of calculating the registration fee.

 

(2)	Includes 2,250,000 units, consisting of 2,250,000 shares of common stock and 2,250,000 warrants, which may be issued upon exercise of a 30-day option granted to the underwriters to cover over-allotments, if any.

 

(3)	No fee due pursuant to Rule 457(g).

 

(4)	Pursuant to Rule 416, there are also being registered such indeterminable additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions as a result of the anti-dilution provisions of the warrants.

 

 

 

 

 

 

 

 

 

 

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		Public Offering Price			Underwriting Discount and Commissions(1)			Proceeds, Before Expenses
Per Unit		$	10.00		$	0.70		$	9.30
Total		$	150,000,000		$	10,500,000		$	139,500,000

 

(1)

Includes the underwriters’ deferred discount of 3.50% of the gross proceeds from the units offered to the public, or $0.35 per unit ($5,250,000 in the aggregate, or $6,037,500 if the underwriters’ over-allotment option is exercised in full), payable to the underwriters only upon completion of our initial business combination. However, the underwriters have waived their right to the deferred discount with respect to those units held by public stockholders who vote against our initial business combination (or against the extension vote, if applicable) and who exercise their conversion rights with respect to the shares underlying the units. The underwriters will not be entitled to any interest accrued on the deferred underwriting discount. See “Underwriting.”

 

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·

references to “we,” “us,” “our,” “company” or “our company” refer to Transformation Capital Corporation, and references to “we,” “us,” “company” or “our company” in the context of a business combination can also mean (i) an entity formed to effect the business combination or (ii) the surviving entity in the business combination, which may include the target company or business or its parent;

 

·

references to the “SEC” refer to the U.S. Securities and Exchange Commission;

 

·

references to our “founders” refer to Mr. Randall Yanker, Mr. Elliot Stein Jr. and Mr. Rodney Yanker;

 

·

references to the “founder units” refer to the 4,312,500 units previously issued to our founders for an aggregate purchase price of $25,000 (up to 562,500 of which are subject to forfeiture by our founders to the extent the underwriters’ over-allotment option is not exercised), and the shares of common stock and warrants comprising the founder units shall be referred to herein as “founder shares” and “founder warrants,” respectively;

 

·

references to the “underwriters’ deferred discount” refer to the $5,250,000 being held in the trust account ($6,037,500 if the underwriters’ over-allotment option is exercised in full) until the completion of an initial business combination, if any, which shall be released to the underwriters upon the completion of an initial business combination, reduced pro-ratably by the exercise of stockholder conversion rights;

 

·

references to the “insider warrants” refer to the 4,750,000 warrants to be purchased from us by our founders at a price of $1.00 per warrant ($4,750,000 in the aggregate) in a private placement that will occur on or prior to the date of the final prospectus for this offering;

 

·

references to “initial business combination” mean our initial acquisition of, or acquisition of control of, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, one or more operating businesses or assets having a fair market value, individually or collectively, of at least 80% of our net assets held in trust (net of taxes and amounts disbursed to us for working capital purposes and excluding the amount of the underwriters’ deferred discount) at the time of the initial business combination (or, if our stockholders have voted to extend our period to complete an initial business combination, at the time of the extension vote), which may be consummated only if a majority of the shares of common stock voted by the public stockholders are voted in favor of the initial business combination and less than 30% of our outstanding shares of common stock issued in this offering, on a cumulative basis, including the shares as to which conversion rights were exercised in connection with the stockholder vote, if any, required to approve an amendment to our amended and restated certificate of incorporation to provide for an extension of the time period within which we must complete our initial business combination, vote against our initial business combination and elect to exercise their conversion rights; and

 

·

references to “public stockholders” refer to holders of common stock sold as part of the units in this offering or in the public market, including our founders or our officers or directors to the extent that they purchase or acquire such common stock in this offering or hereafter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

Mr. Randall S. Yanker, our chief executive officer, president and director, has more than 25 years of trading, investment management and business development experience with various investment banks including Salomon Brothers, Swiss Bank Corporation and Lehman Brothers. Randy is a co-founder and senior partner of AAM, a private investment boutique focused on advising institutions on alternative asset management. Randy and his brother Rodney founded AAM in 2004 to develop strategic investments in emerging alternative asset managers. Prior to founding AAM, Randy was the chief executive officer of Lehman Brothers Alternative Investment Management and was responsible for developing the operation from its initial stages to becoming a global hedge fund platform with assets under management in excess of $4 billion. Before joining Lehman in 2002, he and Rodney co-founded a private investment boutique focused on investments in early-stage managers, development of new investment products and the valuation of general partnership interests in hedge funds. Prior to founding that private investment boutique, Randy was a managing director of Swiss Bank Corp. (“SBC”) (now part of UBS), where he founded and managed SBC’s alternative asset management business from initial concept in 1992 to assets under management in excess of $4 billion in 1998. At SBC, he built a global hedge fund platform for both single strategy hedge funds and a fund of hedge funds business with primary offices in New York, London and Tokyo.

 

 

·

Mr. Elliot Stein Jr., the chairman of our board of directors, has been an executive and an investor in various companies for more than 30 years, and during that time has served as an officer and director in various private and publicly-owned companies in multiple industries, including media, finance, retail and manufacturing. He is a director of Apollo Investment Corporation, a publicly traded closed-end, non-diversified management investment company. In addition, he has been the chairman of the board of Caribbean International News Corporation, a Spanish-language newspaper company that publishes El Vocero de Puerto Rico, since 1985. This acquisition was one of the earliest mainstream acquisitions of a Spanish language media company. Mr. Stein is also director of several privately owned companies, including Cloud Solutions, LLC (a packaging company) and Cohere Communications, LLC. Previously, Mr. Stein was a general partner of the management entity that created Television Station Partners (owner of four network affiliated television stations), which was one of the earliest leveraged buy-out transactions, and has been a director of several other privately owned companies, including The Bargain Shop! Holdings, Inc., Playpower, Inc. and Aldila, Inc.

 

·

Mr. Rodney Yanker, our chief operating officer, secretary and director, has over 25 years of management consulting, direct investing, family office management, infrastructure building and operational expertise with leading firms including Deloitte & Touche and Ramsey Financial. He is a co-founder and senior partner of AAM. Prior to founding AAM, Rodney and his brother Randy co-founded a private boutique that advised institutions and family offices on hedge fund related strategies and private equity transactions with an emphasis on investments in early-stage managers, development of new investment products and valuation of general partnership interests in hedge funds. Prior to founding that private investment boutique, Rodney was the executive vice president of Ramsey Financial, Inc. (“Ramsey”), which manages substantial proprietary and client capital allocated to global hedge funds and private equity investments, where he co-chaired the investment committee responsible for making all investment decisions. At Ramsey, he successfully incubated several start-up hedge funds, co-managed the first significant investment allocation to managed futures by a large public pension plan, and was responsible for managing a direct investment portfolio that included venture capital interests, real estate, high yield debt, bankruptcy claims and a Venezuelan-based coal development project. He also serves on the board of managers for certain publicly registered funds of Ivy Asset Management, a subsidiary of The Bank of New York Mellon.

 

 

 

 

 

 

 

 

 

·

Experienced Management Teams. We will seek to acquire businesses with experienced, proven management teams that have created an effective business culture and implemented best practices in their operations such as investing capital, analyzing risk and underwriting.

 

·

Competitive Industry Position. We will seek to acquire businesses or operations that have strong market positions in their respective areas of the alternative asset management sector. For example, we will focus on companies that have leading or niche market positions and that demonstrate sustainable advantages when compared to their competitors.

 

·

Proven Operating Track Record. We will seek to acquire established businesses with a history of, or potential for, generating strong and stable free cash flows. We will focus on targets with stable predictable, recurring revenue streams and low working capital and capital expenditure requirements. While we do not intend to acquire a start-up company, we would not be precluded from doing so in appropriate circumstances.

 

·

Potential to Increase Profitability. We will seek to acquire a business that has potential to significantly improve profitability, where we could assist in improving performance by augmenting asset growth or by applying our proprietary management and risk evaluation strategies to enhance the target’s existing capabilities. We may consider businesses in need of refinancing or recapitalization that demonstrate significant potential for strong future financial performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities offered:		15,000,000 units, at $10.00 per unit, each unit consisting of:
		· one share of common stock; and
		· one warrant to purchase one share of our common stock.
Trading commencement and separation of common stock and warrants:		The units will begin trading on or promptly after the date of the final prospectus for this offering. The common stock and warrants comprising the units will become eligible for separate trading five business days (or as soon as practicable thereafter) following the earlier to occur of (1) the expiration or termination of the underwriters’ over-allotment option or (2) the exercise of the over-allotment option in full, subject in either case to our having filed a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering, including the over-allotment option, if applicable, and the proceeds of the private placement of the insider warrants, and issuing a press release announcing when such separate trading will begin.
		Following the date the common stock and warrants are eligible to trade separately, the units will continue to be listed for trading, and any security holder may elect to break apart a unit and trade the common stock or warrants separately or as a unit. Even if the component parts of the units are broken apart and traded separately, the units will continue to be listed as a separate security; consequently, any subsequent security holder owning common stock and warrants may elect to combine them together and trade them as a unit. Security holders will have the ability to trade our securities as units until such time as the warrants expire or are redeemed.
		We will file the Form 8-K described above promptly upon the completion of this offering, which is anticipated to take place four business days from the date of the final prospectus for this offering. If the over-allotment option is exercised following the initial filing of such Form 8-K, an amended Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option. Although we will not distribute copies of the Form 8-K to individual unit holders, it will be available on the SEC’s website (www.sec.gov) after it is filed.

 

 

Units:
Number outstanding before this offering		3,750,000 units (or up to 4,312,500 units to the extent the underwriters’ over-allotment option is exercised).
Number to be outstanding after this offering		18,750,000 units (or up to 21,562,500 units to the extent the underwriters’ over-allotment option is exercised).
Common stock:
Number outstanding before this offering		3,750,000 shares (or up to 4,312,500 shares to the extent the underwriters’ over-allotment option is exercised).
Number to be outstanding after this offering		18,750,000 shares (or up to 21,562,500 shares to the extent the underwriters’ over-allotment option is exercised).
Warrants:
Number outstanding before this offering and the private placement of insider warrants		3,750,000 warrants (or up to 4,312,500 warrants to the extent the underwriters’ over-allotment option is exercised).
Number of insider warrants to be sold to the founders in an insider private placement		4,750,000 warrants.
Number to be outstanding after this offering and the private placement of insider warrants		23,500,000 warrants (or up to 26,312,500 warrants to the extent the underwriters’ over-allotment option is exercised).
Exercisability:		Each warrant is exercisable for one share of common stock.
Exercise price:		$7.50 per share.
		The exercise price and the number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger, or consolidation.
Exercise period:		The warrants will become exercisable on the later of:
		·    the completion of our initial business combination, and   ·                     , 2009 (one year from the date of the final prospectus for this offering), provided that we have an effective registration statement covering the shares issuable upon exercise of the warrants and a related current prospectus is available.   The warrants will expire at 5:00 p.m., New York time, on the date that is five years from the date of the final prospectus for this offering or earlier upon redemption.

 

 

		On the exercise of any warrant (other than on a cashless basis), the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption:		We may redeem the outstanding warrants (except as described below with respect to the founder warrants and the insider warrants) at any time after the warrants become exercisable:
		·   in whole and not in part;   ·   at a price of $0.01 per warrant;   ·   upon a minimum of 30 days’ prior written notice of redemption; and
		·   if, and only if, the last sale price of our common stock equals or exceeds $14.25 per share (the “redemption trigger price”) for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption.
		We may not redeem the warrants unless the shares of common stock issuable upon exercise of the warrants included in the units sold in this offering are covered by an effective registration statement, and a related current prospectus is available from the date of notice of redemption through the date fixed for redemption.
		The redemption trigger price of $14.25 has been established to provide warrant holders a premium to the initial exercise price. We cannot assure you, however, that the price of the common stock will exceed either the redemption trigger price of $14.25 or the warrant exercise price of $7.50 after we call the warrants for redemption.
		If the foregoing conditions are satisfied and we call the warrants for redemption, each warrant holder will then be entitled to exercise its warrants prior to the date scheduled for redemption. If we call the warrants for redemption, we will have the option to require all holders who wish to exercise warrants to do so on a “cashless basis.” Exercising warrants on a “cashless basis” means that in lieu of paying the exercise price in cash, the holder would forfeit a number of the shares underlying the warrants being exercised with a value equal to the aggregate exercise price and the holder will therefore receive fewer shares than such holder would otherwise have received upon exercise of those warrants. Thus, in such event, each holder would surrender all of its warrants and receive that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock issuable upon exercise of the warrants, multiplied by the difference between the exercise price of the warrants and the fair market value (as defined below) by (y) the fair market value. For this purpose, the “fair market value” means the average reported last sale price of our common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

 

 

		For example, in a cashless exercise, assuming there are 100 warrants held by a holder, the fair market value of our common stock is $15.00 per share, and the holder elects to exercise all of its warrants, the holder would pay the exercise price of $7.50 per share of common stock by surrendering a number of warrants calculated as follows:
		1.   Number of shares of common stock underlying warrants:	100
		2.   Difference between the fair market value per share ($15.00) and the exercise price per share ($7.50):	$7.50
		3.   Item 1 multiplied by Item 2:	750
		4.   Item 3 divided by the fair market value per share of common stock ($15.00):	50
		5.   Warrants to be surrendered equals the percentage determined in Item 4 (50%) multiplied by the total warrants held (100):	50
		6.   Number of shares of common stock issuable to the holder equals the shares of common stock underlying warrants specified in Item 1 (100) less the shares of common stock underlying the warrants to be surrendered determined in Item 5 (50):	50
		No fractional shares of common stock will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder.
		If our management chooses to require holders to exercise their warrants on a cashless basis, the number of shares of common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised its warrants for cash.   The foregoing redemption provisions do not apply to the founder warrants or the insider warrants, in each case for as long as such warrants are held by our founders or their permitted transferees. If we call the warrants for redemption and require holders wishing to exercise to do so on a cashless basis, our founders will still be entitled to exercise their founder warrants and insider warrants for cash. As a result, our management and directors, which includes our founders, may have a conflict of interest in determining when to call the warrants for redemption, as they would potentially be able to avoid any negative price pressure on the price of the warrants and common stock due to the redemption of the warrants (other than the founder warrants and the insider warrants) by means of a cashless exercise.

 

 

Founder units:

On February 20, 2008, our founders purchased an aggregate of 4,312,500 founder units for an aggregate purchase price of $25,000, or approximately $0.0058 per unit. This includes an aggregate of up to 562,500 founder units that are subject to forfeiture by our founders to the extent the underwriters’ over-allotment option is not exercised, so that our founders and their permitted transferees will own 20% of our issued and outstanding units after this offering (assuming they do not purchase units in this offering). Each founder unit consists of one share of common stock and one warrant to purchase one share of common stock. The founder shares and founder warrants comprising the founder units are identical to the common stock and warrants comprising the units being sold in this offering, except that:   ·  our founders and their permitted transferees will not be able to exercise conversion rights (as described below) with respect to the founder shares;   ·  our founders have agreed, and any permitted transferees will agree, to vote the founder shares in connection with the vote required to approve our initial business combination, the vote required to approve an amendment to our amended and restated certificate of incorporation to allow for our perpetual existence, and any vote to approve an extension of our corporate existence to up to 30 months from the date of the final prospectus for this offering as described herein, in the same manner as a majority of the shares of common stock voted by our public stockholders;   ·  our founders have agreed, and any permitted transferees will agree, to waive their right to participate in any liquidation distribution with respect to the founder shares if we fail to complete our initial business combination;   ·  the founder warrants may not be exercised unless and until the last sale price of our common stock equals or exceeds $14.25 for any 20 days within any 30- trading day period beginning 90 days after our initial business combination;   ·  the founder units are being purchased pursuant to an exemption from the registration requirements of the Securities Act and so the founder units, founder shares and founder warrants, will become freely tradable only after they are registered for sale pursuant to a registration rights agreement to be entered into in connection with the private placement;   ·  the founder warrants will not be redeemable by us as long as they are held by our founders or their permitted transferees;   ·  the founder warrants may by exercised by their holders for cash or on a cashless basis; and

 

 

		·  the founder units, founder shares and founder warrants (including the common stock issuable upon exercise of the founder warrants) will be subject to certain transfer restrictions described below until one year after the completion of our initial business combination.
Private placement of insider warrants:		Our founders have agreed to purchase an aggregate of 4,750,000 insider warrants at a price of $1.00 per warrant for a total of $4,750,000 in a private placement that will occur on or prior to the date of the final prospectus for this offering. The insider warrants will be purchased separately and not in combination with common stock in the form of units.
		The proceeds from the private placement of the insider warrants will be added to the proceeds from this offering to be held in the trust account pending the completion of our initial business combination. If we do not complete our initial business combination within 24 months (or up to 30 months if our stockholders approve an extension), then the $4,750,000 purchase price of the insider warrants will become part of the amount payable to our public stockholders upon the liquidation of our trust account and the insider warrants will become worthless.
		The insider warrants have terms and provisions that are identical to the warrants contained in the units being sold in this offering, except that:   ·  the insider warrants are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after they are registered for sale pursuant to a registration rights agreement to be entered into in connection with the private placement;   ·  the insider warrants will be not be redeemable by us as long as they are held by our founders or their permitted transferees;   ·  the insider warrants may be exercised by their holders for cash or on a cashless basis; and   ·  the insider warrants will be subject to certain transfer restrictions described below until the completion of our initial business combination.
		No commissions, fees or other compensation will be payable in connection with the private placement of the insider warrants.
Transfer restrictions on founders securities:		Our founders have agreed, subject to certain exceptions described below, not to transfer, assign or sell, directly or indirectly:
		·  any of the founder units, founder shares or founder warrants included in such units (including the shares issuable upon exercise of the founder warrants) until one year after the completion of our initial business combination, or

 

 

		·  any of the insider warrants until after the completion of our initial business combination.
		Notwithstanding the foregoing, our founders will be permitted to transfer all or any portion of the founder units, founder shares, founder warrants and the insider warrants (including the securities issuable upon exercise of such securities) to certain permitted transferees described under “Principal Stockholders—Transfers of Units, Common Stock and Warrants by our Founders.” These permitted transferees include our officers, directors and employees, any affiliates or family members of such individuals, any affiliates of our founders and any officers, directors, members and employees of such affiliates, and certain other individuals specifically designated by us prior to this offering. All permitted transferees receiving such securities will be subject to the same transfer restrictions as our founders and any such transfers will be made in accordance with applicable securities laws.
Registration rights:		Pursuant to a registration rights agreement between us and our founders, the holders of the founder units (and the founder shares and founder warrants and the shares issuable upon exercise of the founder warrants) and the insider warrants (and the common stock issuable upon exercise of the insider warrants) will be entitled to three demand registration rights and “piggy-back” registration rights commencing after the completion of our initial business combination, in the case of the insider warrants, and one year after the completion of our initial business combination, in the case of the founder units.
American Stock Exchange listing:		We have applied to list our securities on the American Stock Exchange upon completion of this offering. Although after giving effect to this offering we expect to meet on a pro forma basis the minimum initial listing standards set forth in Section 101(c) of the AMEX Company Guide, which only requires that we meet certain requirements relating to stockholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements, we cannot assure you that our securities will continue to be listed on the American Stock Exchange as we might not meet certain continued listing standards such as income from continuing operations.
AMEX symbols for our:
Units		TCY.U
Common stock		TCY
Warrants		TCY.W

 

 

Offering proceeds to be held in trust:		$148,500,000 of the proceeds of this offering and the private placement (or $170,212,500, if the underwriters’ over-allotment option is exercised in full) or approximately $9.90 per unit (or $9.87, if the over-allotment option is exercised in full, will be placed in a trust account maintained by                                      , acting as trustee pursuant to an agreement to be signed on the effective date of the registration statement of which this prospectus forms a part. These proceeds include $4,750,000 in net proceeds from the private placement and $5,250,000 in deferred underwriting discount (or $6,037,500, if the over-allotment option is exercised in full). We believe that the placement of the underwriters’ deferred discount and the purchase price of the insider warrants in a trust account is a benefit to our public stockholders because additional proceeds will be available for distributions to investors if we liquidate our trust account prior to our completion of our initial business combination. The proceeds held in trust will not be released until the earlier of the completion of our initial business combination or our liquidation except to holders who have exercised conversion rights in connection with an extension of the period within which we must consummate our initial business combination, if applicable. The underwriters have waived their rights to the $5,250,000 of the underwriters’ deferred discount deposited in the trust account in the event we liquidate prior to the completion of our initial business combination.
		Notwithstanding the foregoing, there can be released to us from the trust account interest earned on the trust account (i) up to an aggregate of $2,000,000 to fund expenses related to investigating and selecting a target business and our other working capital requirements and (ii) in any amounts we may need to pay our income and other tax obligations. With these exceptions, expenses incurred by us while seeking our initial business combination may be paid prior to our initial business combination only from the net proceeds of this offering not held in the trust account (initially estimated to be approximately $250,000 after the payment of the expenses relating to this offering).   It is possible that we could use a portion of the funds not in the trust account to make a deposit or down payment to fund a “no-shop” provision with respect to a particular proposed initial business combination. In the event we were ultimately required to forfeit such funds (whether as a result of our breach of the agreement relating to such payment or otherwise), we may not have a sufficient amount of working capital available outside of the trust account to pay expenses related to finding a suitable initial business combination without securing additional financing. If we are unable to secure additional financing, we would most likely fail to complete our initial business combination in the allotted time and would liquidate our trust account.
Limited payment to insiders:		There will be no fees, reimbursements, or other cash payments paid by us to our founders or our officers or directors or their respective affiliates prior to, or for any services they render in order to effectuate the consummation of, our initial business combination, other than the following:   ·  repayment of a $200,000 loan made to us by our founders;

 

 

		·  payment of $10,000 per month for up to 24 months (or up to 30 months if our stockholders approve an extension) (up to an aggregate of $240,000, or $300,000 if our stockholders approve an extension) to Alternative Asset Managers. L.P., an affiliate of our founders, for office space and administrative services; and   ·  reimbursement of out-of-pocket expenses incurred by our founders, directors, officers and their respective affiliates (and employees of such affiliates) in connection with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations.
Conditions to consummating our initial business combination:		Our initial business combination must occur with one or more target businesses that together have a fair market value of at least 80% of our net assets held in trust at the time of such initial business combination (or, if our stockholders have voted to extend our period to complete an acquisition, at the time of the extension vote). For calculation purposes, “net assets” will exclude taxes due on the amounts in the trust account, amounts disbursed to us for working capital purposes and the amount of the underwriters’ deferred discount. Our board of directors will determine the fair market value based on standards generally accepted by the financial community.
		In addition, we must acquire a controlling interest in the acquisition target. Key factors in determining whether we have a controlling interest include whether we own a majority of the voting equity interests (or at a minimum a significant voting equity interest that enables us to exercise a greater degree of control over the target than any other equity holder) of the target, the extent to which we have the ability to appoint members of the board of directors or management of the target and the extent to which we otherwise have effective control over the target (whether pursuant to the securities we acquire, by contract or otherwise).
		Depending on the percentage of our public stockholders exercising conversion rights and the fair market value of our initial business combination, we may need to raise additional capital through either equity or debt issuances to fund the full acquisition price of our initial business combination.
Stockholders must approve initial business combination:		We will seek stockholder approval before we effect our initial business combination, even if the nature of the acquisition would not ordinarily require stockholder approval under applicable state law. Public stockholders may vote against a business combination and exercise their conversion rights described below. In connection with the vote required for our initial business combination or any extension of our corporate existence to up to 30 months from the date of the final prospectus for this offering in the event we have entered into a definitive agreement for, but have not consummated, our initial business combination, our founders have agreed to vote their founder shares in accordance with the majority of the shares of common stock voted by the public stockholders. In connection with any securities purchased by our founders in this offering or after this offering in the open market or in a private placement, our founders have agreed to vote such shares of common stock in favor of a business combination and our perpetual existence and in favor of any such extension.

 

 

		We will only proceed with our initial business combination if:
		·  a majority of the shares of common stock voted by the public stockholders are voted in favor of the business combination,   ·  conversion rights have been exercised with respect to less than 30% of the shares of common stock issued in this offering (calculated on a cumulative basis, including the shares as to which conversion rights were exercised in connection with either (i) a stockholder vote, if any, to approve an extension of the time period within which we must complete our initial business combination, or (ii) the stockholder vote to approve our initial business combination), and   ·  the amendment to our amended and restated certificate of incorporation to provide for our perpetual existence is approved by holders of a majority of our outstanding shares of common stock.
		We intend in every case to structure our initial business combination so that stockholders owning up to, but less than, 30% of the total number of shares issued in this offering may exercise their conversion rights (either in connection with the initial business combination or the possible extension of the time period within which we must consummate our initial business combination) and the initial business combination could still go forward.
		Our threshold for conversion rights has been established at 30%, which will increase the likelihood of an approval of any proposed initial business combination by making it easier for us to complete our initial business combination with which public stockholders may not agree. However, the 30% threshold entails certain risks described under “Risk Factors—Risks Relating to Our Structure as a Development Stage Company.”
		For purposes of seeking approval of our initial business combination by a majority of voting public stockholders, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. We intend to give approximately 30 (but not fewer than ten nor more than 60) days’ prior written notice of any meeting at which a vote will be taken to approve our initial business combination.

 

 

		If a vote on our initial business combination is held and the conditions to proceeding with that initial business combination are not satisfied, we may continue to try to complete an initial business combination until 24 months after the date of the final prospectus for this offering (or up to 30 months if the stockholders approve an extension).
		Upon the completion of our initial business combination, unless required by Delaware law, the federal securities laws and the rules and regulations promulgated thereunder, or the rules and regulations of an exchange upon which our securities are listed, we do not presently intend to seek stockholder approval for any subsequent mergers, acquisitions or similar transactions.
Possible extension of time to consummate an initial business combination up to 30 months:		Unlike most other blank check companies, if we have entered into a definitive agreement relating to an initial business combination within 24 months following the date of the final prospectus for this offering (and if we anticipate that we may not be able to consummate an initial business combination within the 24-month period), we may seek up to a six-month extension to complete our initial business combination by calling a special (or annual) meeting of our stockholders for the purpose of soliciting their approval to amend our amended and restated certificate of incorporation to give effect to such extension. Approval of any extension will require the affirmative vote of the holders of a majority of our outstanding shares of common stock at the special (or annual) meeting called for the purpose of approving such extension.   We believe that extending the date before which we must complete our initial business combination to up to 30 months following the date of the final prospectus for this offering may be advisable to ensure that any potential acquisition can be consummated. For example, if we enter into a definitive agreement near the end of the 24-month period following the date of the final prospectus for this offering, we may not have sufficient time to obtain any necessary regulatory approvals, secure the approval of our stockholders and satisfy customary closing conditions.   In connection with the vote required for any such extension, our founders have agreed, and their permitted transferees will agree, to vote the shares of common stock included in the founder units in accordance with the majority of the shares of common stock voted by the public stockholders.   Any public stockholders voting against the proposed extension will be eligible to convert their shares into a pro rata share of the trust account if we effect the extension. However, a public stockholder will be restricted from exercising conversion rights with respect to more than 10%, on a cumulative basis, of the shares included in the units being issued in this offering. See “—Conversion rights for public stockholders voting to reject a proposed extension or an initial business combination.” We will not effect the extension if 30% or more of the shares issued in this offering vote against the proposed extension and elect to convert their shares into their pro rata share of our trust account. In such event, if we cannot complete our initial business combination within the original 24-month period set forth in our amended and restated certificate of incorporation, we will liquidate.

 

 

		If we receive stockholder approval for the extension and conversion rights are not exercised with respect to 30% or more of the shares issued in this offering in connection with the vote for the extension, we will then have an additional period of up to six months in which to consummate our initial business combination. We will still be required to seek stockholder approval before completing our initial business combination if it was not obtained earlier, even if the business combination would not ordinarily require stockholder approval under applicable law. As a result of an approval of the extension, we may be able to hold the funds in the trust account for up to 30 months.   Stockholders who vote against the extension and exercise their conversion rights may vote on the initial business combination, so long as such business combination was not previously approved by the stockholders and such stockholders continue to own shares of common stock or acquire new shares through open market purchases or otherwise.   Public stockholders who cause us to convert their shares into their pro rata share of the trust account will still have the right to exercise the warrants that they received as part of the units.   If, following approval of the extension, at the end of the extended period of up to 30 months we have not effected an initial business combination, our corporate existence will automatically cease without the need for a stockholder vote, except for the purposes of liquidating and winding up our affairs pursuant to Section 278 of the Delaware General Corporation Law.
Conversion rights for public stockholders voting to reject a proposed extension or an initial business combination:		Each public stockholder voting against our initial business combination or an extension of the time period within which we must consummate our initial business combination will have the right to convert its shares of common stock into a pro rata share of the aggregate amount then on deposit in the trust account, including both interest income earned on their portion of the trust account and their pro rata portion of the deferred underwriting discount (net of taxes payable and amounts disbursed to us for working capital purposes), if the initial business combination is approved and completed.

 

 

		Notwithstanding the foregoing, public stockholders will not be entitled to their pro rata share of the trust account simply by voting against the initial business combination; each stockholder must also affirmatively exercise its conversion rights in order to receive its pro rata share of the trust account. However, if public stockholders owning 30% or more of the shares of common stock issued in this offering cumulatively vote against the initial business combination or an extension of the time period within which we must consummate our initial business combination and exercise their conversion rights, we will not proceed with such initial business combination. Public stockholders who convert their stock into their pro rata share of the trust account will continue to have the right to exercise any warrants they may hold.   The founders and their permitted transferees are not entitled to convert any of their founder shares into a pro rata share of the trust account.
		A public stockholder, together with any affiliate of its or any other person with whom it is acting in concert or as a “group” within the meaning of Section 13(d)(5) of the Securities Exchange Act of 1934 (the “Exchange Act”), will be restricted from exercising conversion rights with respect to more than 10%, on a cumulative basis, of the shares included in the units being issued in this offering, even if such public stockholder votes against a proposed extension or initial business combination with respect to all shares owned by it or its affiliates and other group members. Shares converted in connection with the vote on an extension of the time period within which we must complete our initial business combination and in connection with the vote on the initial business combination will be aggregated for purposes of this 10% limit. Such a public stockholder would still be entitled to vote against an extension or a proposed initial business combination with respect to all shares of common stock owned by it or its affiliates. We believe this restriction will discourage public stockholders from accumulating large blocks of stock before the vote to approve an extension or a proposed initial business combination is held and attempting to use the conversion right as a means to force us or our management to purchase their stock at a premium to the then current market price. Absent this provision, a public stockholder who owns more than 10% of the shares included in the units being issued in this offering could threaten to vote against an extension or a proposed initial business combination and seek conversion, regardless of the merits of the transaction, if its shares are not purchased by us or our management at a premium to the then current market price (or if management refuses to transfer to him some of their shares). By enforcing this limit, we believe we have limited the ability of a small group of stockholders to unreasonably attempt to block an extension or initial business combination that is favored by a majority of our other public stockholders.
Procedure for exercising conversion rights:		An eligible stockholder may request conversion at any time after the mailing to our stockholders of the proxy statement and prior to the vote taken with respect to a proposed initial business combination or an extension of the time period within which we must complete our initial business combination at a meeting held for that purpose, but the request will not be granted unless the stockholder votes against the initial business combination or the extension, the initial business combination is approved and completed or the extension is approved, the stockholder holds its shares through the completion of the initial business combination or the date of the approval of the extension and the stockholder follows the specific procedures for conversion set forth in the proxy statement.

 

 

		In addition, we may require public stockholders, whether they are record holders or hold their shares in “street name,” either to tender their certificates to our transfer agent at any time through the vote on the initial business combination or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s (“DTC”) DWAC (Deposit/Withdrawal At Custodian) System. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $35 and it would be the broker’s decision whether or not to pass this cost on to the converting holder.
		The proxy solicitation materials that we will furnish to stockholders in connection with the vote for any proposed initial business combination will indicate whether we are requiring stockholders to satisfy a delivery requirement. Accordingly, a stockholder would have from the time we send out our proxy statement through the vote on the initial business combination to deliver its shares if it wishes to seek to exercise its conversion rights. If applicable, this time period will vary depending on the specific facts of each transaction. However, as the delivery process can be accomplished by the stockholder, whether or not it is a record holder or its shares are held in “street name,” in a matter of hours by simply contacting the transfer agent or its broker and requesting delivery of its shares through the DWAC System, we believe this time period is sufficient for an average investor.
		Any request for conversion, once made, may be withdrawn at any time up to the date of the meeting. Furthermore, if a stockholder delivers its certificate for conversion and subsequently decides prior to the meeting not to elect conversion, it may simply request that the transfer agent return the certificate (physically or electronically).
		If the initial business combination or extension is not approved or the initial business combination is approved but not completed for any reason, then public stockholders voting against our initial business combination or extension who exercised their conversion rights would not be entitled to convert their shares of common stock into a pro rata share of the aggregate amount then on deposit in the trust account. In such case, if we have required public stockholders to deliver their certificates prior to the meeting, we will promptly return such certificates to the public stockholders.

 

 

Liquidation if no initial business combination:		If we have not completed our initial business combination within 24 months from the date of the final prospectus for this offering (or up to 30 months if our stockholders approve an extension), our corporate existence will cease except for the purposes of winding up our affairs and liquidating pursuant to Section 278 of the Delaware General Corporation Law, in which case we will as promptly as practicable thereafter adopt a plan of distribution in accordance with Section 281(b) of the Delaware General Corporation Law. Section 278 provides that our existence will continue for at least three years after its expiration for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against us, and of enabling us gradually to settle and close our business, to dispose of and convey our property, to discharge our liabilities and to distribute to our stockholders any remaining assets, but not for the purpose of continuing the business for which we were organized. Our existence will continue automatically even beyond the three-year period for the purpose of completing the prosecution or defense of suits begun prior to the expiration of the three-year period, until such time as any judgments, orders or decrees resulting from such suits are fully executed.
		Section 281 of the Delaware General Corporation Law will require us to adopt a plan that will provide for our payment, based on facts known to us at such time, of (i) all existing claims, (ii) all pending claims, and (iii) all claims that may be potentially brought against us within the subsequent 10 years. Accordingly, we would be required to provide for any claims of creditors known to us at that time or those we believe could be potentially brought against us within the subsequent 10 years prior to distributing the funds held in the trust to our public stockholders. We have not assumed that we will have to provide for payment on any claims that may potentially be brought against us within the subsequent 10 years due to the speculative nature of such an assumption.
		We may fail to properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims of creditors to the extent of distributions received by them (but no more). However, because we are a development stage blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors, service providers (such as accountants, lawyers, investment bankers, etc.), and prospective target businesses. While we will seek to have all vendors, service providers (which would include any third parties we engaged to assist us in any way in connection with our search for a target business), prospective target businesses, or other entities that are owed money by us for services rendered or contracted for, or products sold to us execute agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements. Even if such entities execute such agreements with us, they may seek recourse against the trust account or a court may conclude that such agreements are not legally enforceable.

 

 

		Founders who acquire shares of common stock in or after this offering will be entitled to a pro rata share of the trust account with respect to such shares upon the liquidation of the trust account in the event we do not consummate an initial business combination within the required time period. The founders and their permitted transferees will waive their right to receive any share of the trust account upon such liquidation of the trust account with respect to their founder shares.   We will pay the costs of liquidation from our remaining assets outside of the trust account.
Liability for certain claims:		Our founders have each agreed that each of them will be liable to ensure that the proceeds in the trust account on the date of the consummation of this offering are not reduced by the claims of vendors, service providers, prospective target businesses, or other entities that are owed money by us for services (including financing) rendered or contracted for or products sold to us, or by claims of prospective target businesses for fees and expenses of third parties that we agree to pay in the event we do not complete our initial business combination with such target business. However, our founders will not be liable for any claimed amounts owed to a third party who executed a waiver (even if such waiver is subsequently found to be invalid and unenforceable) or in respect of any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended.
		We will not reimburse our founders for payments made by them to ensure that the proceeds initially deposited in the trust account are not reduced. We believe that our board of directors would be obligated to pursue a potential claim for reimbursement from our founders pursuant to the terms of their agreements with us if it would be in the best interests of our stockholders to pursue such a claim. Such a decision would be made by a majority of our disinterested directors based on the facts and circumstances at the time. However, we will have no recourse against our founders if any liability occurs with respect to (1) a claim other than a claim by a vendor, service provider, prospective target business, or other entity that is owed money by us for services rendered or contracted for or products sold to us, or other than a claim by a prospective target business for fees and expenses of third parties that we agree to pay in the event we do not complete our initial business combination with such target business, (2) a claim by a third party who executed a waiver (even if such is subsequently found to be invalid and unenforceable), or (3) any claims under our indemnity of the underwriters of this offering against certain liabilities as described above. We cannot assure you that our founders will be able to satisfy their obligations, if they are required to do so. Further, our founders are liable only to the extent necessary to ensure that the amounts in the trust fund are not reduced below the amounts deposited into the trust fund upon the closing of this offering.

 

 

Amended and restated certificate of incorporation; obligations to our stockholders:

Our amended and restated certificate of incorporation will contain several provisions relating to this offering that will apply to us until the completion of our initial business combination or any extension of the time period within which we must consummate our initial business combination, including those providing for (i) stockholder approval of our initial business combination or any such extension, (ii) conversion rights for stockholders who vote against our initial business combination or any such extension, and (iii) the termination of our existence after 24 months (or up to 30 months if our stockholders approve an extension) if we have not completed a initial business combination. These provisions may only be amended with the affirmative vote of holders of at least 95% of our outstanding shares of common stock. While we have been advised that the provisions limiting our ability to amend our amended and restated certificate of incorporation may not be enforceable under Delaware law, we view these provisions as obligations to our stockholders and we expect that investors will make an investment decision relying, at least in part, on these provisions.   Neither we, nor any of our officers or directors will support, directly or indirectly, or in any way endorse or recommend, that stockholders approve an amendment or modification to these provisions without the affirmative vote of at least 95% of our outstanding shares of common stock. We will be contractually obligated not to take such actions pursuant to the underwriting agreement that we will enter into with the underwriters in connection with this offering.   In connection with any proposed initial business combination that we submit to our stockholders for approval, we will also submit to them a proposal to amend our amended and restated certificate of incorporation to provide for our perpetual existence, thereby removing the limitation on our corporate life. We will not seek to amend or waive the provision limiting our corporate life other than in connection with the approval of an initial business combination or an extension as described above under “Possible extension of time to consummate an initial business combination up to 30 months.” We view this as a binding obligation to our stockholders. We will only consummate an initial business combination if stockholders vote in favor both of such business combination and our amendment to provide for our perpetual existence. Any vote to extend our corporate life to continue perpetually in connection with an initial business combination will be effective only if the initial business combination is approved. In connection with an initial business combination, the approval of the proposal to amend our amended and restated certificate of incorporation to provide for our perpetual existence would require the affirmative vote of a majority of our outstanding shares of common stock.

 

 

Audit committee to monitor compliance:

We will establish and maintain an audit committee to, among other things, monitor compliance with the 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 cause compliance with the terms of this offering.

 

 

 

		February 20, 2008
Balance Sheet Data:		Actual			As Adjusted(1)
Working capital (deficit)		$	(86,000	)	$	145,099,000
Total assets		$	335,000		$	148,774,000
Total liabilities(2)		$	311,000		$	3,675,000
Value of common stock that may be converted to cash(3)			—		$	44,549,990
Stockholders’ equity		$	24,000		$	100,549,010

 

---

(1)

The “as adjusted” information gives effect to the sale of the units we are offering (other than pursuant to the underwriters’ over-allotment option) and the sale of the insider warrants, including the application of the related gross proceeds and the payment of the estimated remaining costs from such sale and the repayment of the accrued and other liabilities to be made. The “as adjusted” working capital and total assets amounts include the $138,750,000 from the proceeds of the offering and the $4,750,000 purchase price of the insider warrants, $143,250,000 of which will be available to us only upon the completion of our initial business combination. The “as adjusted” working capital and total assets amounts also include the $5,250,000 to be held in the trust account ($6,037,500 if the underwriters’ over-allotment option is exercised in full) representing the underwriters’ deferred discount. If we have not completed our initial business combination within 24 months from the date of the final prospectus for this offering (or up to 30 months if our stockholders approve an extension), our corporate existence will cease by operation of law and we will promptly distribute only to our public stockholders the amount in our trust account (net of taxes payable and amounts disbursed to us for working capital purposes) plus any remaining net assets, subject to our obligations under Delaware law to provide for claims of creditors. Our founders have waived their rights to participate in any liquidation distribution occurring upon our failure to complete our initial business combination and subsequent liquidation with respect to their founder shares.

 

(2)

For purposes of presentation, the “as adjusted” information assumes maximum conversion to cash of shares subject to conversion (4,499,999 shares) in connection with our business combination and reflects the corresponding pro rata reduction in the deferred underwriting discounts and commissions to be paid upon consummation of an initial business combination to approximately $3,675,000, or $0.35 per share.

 

(3)

Represents 4,499,999 shares of common stock that are subject to possible conversion at an initial per-share conversion price of approximately $9.90. If the initial business combination is consummated, public stockholders who vote against the initial business combination and exercise their conversion rights will be entitled to receive their pro rata portion of the amount in the trust account (initially approximately $9.90 per share), which amount represents the proceeds of this offering (including the underwriters’ deferred discount) and the purchase price of the insider warrants, without taking into account any income earned on the trust account (net of any taxes due on such income, which taxes, if any, shall be paid from the trust account, and amounts disbursed to us for working capital purposes).

 

 

 

·

the amount in the trust account, inclusive of any interest thereon (net of any taxes payable and up to $2,000,000 of interest income permitted to be released to us for working capital purposes), and as of two business days prior to the completion of the proposed initial business combination, divided by

 

 

·

the number of shares of common stock issued in this offering that are outstanding at the time of the vote to approve our initial business combination.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

restrictions on the nature of our investments;

 

·

restrictions on borrowing; and

 

·

restrictions on the issuance of securities, including warrants.

 

 

·

registration as an investment company;

 

·

adoption of a specific form of corporate structure; and

 

·

reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations.

 

 

 

 

 

 

 

 

 

 

 

 

 

·

may significantly reduce the equity interest of our stockholders;

 

·

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to the holders of our common stock;

 

·

may cause a change in control if a substantial number of our shares of common stock are 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 directors and officers and cause our public stockholders to become minority stockholders in the combined entity; and

 

·

may adversely affect prevailing market prices for our common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

the requirement that we obtain stockholder approval of our initial business combination may delay or prevent the consummation of a transaction within the required time period;

 

 

·

the requirement that we prepare a proxy statement and notice of special meeting of stockholders in accordance with the requirements of Delaware law and the U.S. federal securities laws, which proxy statement will be required to be submitted to and reviewed by the SEC, in connection with our initial business combination may delay or prevent the consummation of a transaction;

 

·

the requirement that we prepare audited and perhaps interim unaudited financial information to be included in the proxy statement to be sent to stockholders in connection with our initial business combination may delay or prevent the consummation of a transaction;

 

·

any conversion of common stock held by our public stockholders into cash will reduce the funds available to us from the trust account to fund our initial business combination;

 

·

the existence of all of our founder warrants, insider warrants and warrants included in the units being sold in this offering, and the dilution they potentially represent, may not be viewed favorably by certain target businesses; and

 

·

the requirement to acquire a business, or a portion of such business or businesses, having a fair market value, individually or collectively, of at least 80% of our net assets held in trust (net of taxes and amounts disbursed to us for working capital purposes and excluding the amount of the underwriters’ deferred discount) at the time of the initial business combination (or, if our stockholders have voted to extend our period to complete an initial business combination, at the time of the extension vote) (i) could require us to acquire several closely related businesses or portions thereof at the same time, all of which acquisitions would be contingent on the closings of the other acquisitions, which would make it more difficult to consummate our business combination and (ii) together with our ability to proceed with a business combination if public stockholders owning up to, but less than, 30% of the shares of common stock included in the units being issued in this offering both vote against our business combination and exercise their conversion rights, may require us to raise additional funds through additional sales of our securities or incur indebtedness in order to enable us to effect such a business combination.

 

 

 

 

 

 

 

 

 

 

 

 

·

tariffs and trade barriers;

 

·

regulations related to customs and import/export matters;

 

·

tax issues, such as tax law changes and variations in tax laws as compared to the United States;

 

·

cultural and language differences;

 

·

an inadequate banking system;

 

·

foreign exchange controls;

 

 

·

restrictions on the repatriation of profits or payment of dividends;

 

·

crime, strikes, riots, civil disturbances, terrorist attacks and wars;

 

·

nationalization or expropriation of property;

 

·

law enforcement authorities and courts that are inexperienced in commercial matters; and

 

·

deterioration of political relations with the United States.

 

 

·

the challenge of navigating a complex set of licensing requirements and restrictions affecting the conduct of business in such countries by foreign companies;

 

·

difficulties and limitations on the repatriation of cash;

 

·

currency fluctuation and exchange rate risks;

 

·

protection of intellectual property, both for us and our customers; and

 

·

difficulty retaining management personnel and skilled employees.

 

 

 

 

 

 

 

 

 

 

 

·

solely dependent upon the performance of a single business; or

 

·

dependent upon the development or market acceptance of a single or limited number of products, processes or services.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

default and foreclosure on our assets if our operating cash flow after our initial business combination were insufficient to pay our debt obligations;

 

·

acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due, if the debt contained covenants that required the maintenance of certain financial ratios or reserves and any such covenant were breached without a waiver or renegotiation of that covenant;

 

·

our immediate payment of all principal and accrued interest, if any, if the debt was payable on demand;

 

·

covenants that limit our ability to pay dividends on our common stock, acquire capital assets or make additional acquisitions; and

 

·

our inability to obtain additional financing, if necessary, if the debt contained covenants restricting our ability to obtain additional financing while such debt was outstanding.

 

 

 

 

 

 

 

·

investors may develop concerns that we will allow a business to grow to the detriment of its performance;

 

·

other entities that participate in the alternative asset management sector will have greater capital and may have greater sector expertise than we do, which creates competitive disadvantages with respect to investment opportunities; and

 

·

there are relatively few barriers to entry impeding new private equity and hedge fund management firms, and the successful efforts of new entrants into the alternative asset management sector, including former “star” portfolio managers at large diversified financial institutions as well as such institutions themselves, will continue to result in increased competition.

 

 

 

 

 

 

 

 

 

 

 

 

·

general economic and securities market conditions;

 

·

the level and volatility of interests rates, equity prices and currency values;

 

·

competitive conditions;

 

·

investor sentiment and the liquidity of global markets;

 

·

international and regional political conditions;

 

·

regulatory and legislative developments;

 

·

monetary and fiscal policy;

 

·

availability and cost of capital;

 

·

technological changes and events; and

 

 

·

inflation.

 

 

 

 

 

·

the history and prospects of companies whose principal business is the acquisition of other companies;

 

·

prior offerings of those companies;

 

·

our prospects for acquiring an operating business at attractive values;

 

·

our capital structure;

 

·

an assessment of our management and their experience in identifying operating companies;

 

·

general conditions of the securities markets at the time of the offering; and

 

·

other factors as were deemed relevant.

 

 

 

 

 

 

 

 

 

 

 

 

 

·

in whole and not in part;

 

·

at a price of $0.01 per warrant;

 

·

upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and

 

·

if, and only if, the last sale price of our common stock equals or exceeds $14.25 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to warrant holders.

 

 

 

 

 

 

 

 

 

 

·

make a special written suitability determination for the purchaser;

 

·

receive the purchaser’s written agreement to the transaction prior to sale;

 

·

provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and

 

·

obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock” can be completed.

 

 

 

 

 

 

 

 

 

·

a limited availability of market quotations for our securities;

 

·

a determination that our common stock is a “penny stock,” which would 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 common stock;

 

·

a more limited amount of news and analyst coverage for our company;

 

·

a decreased ability to issue additional securities or obtain additional financing in the future; and

 

·

a decreased ability of our security holders to sell their securities in certain states.

 

 

 

 

 

 

·

provisions establishing a board of directors that is divided into three classes with staggered terms;

 

·

provisions relating to the number and election of directors, the appointment of directors upon an increase in the number of directors or vacancy and provisions permitting the removal of directors only for cause and with a 66 2/3% stockholder vote;

 

·

provisions requiring a 66 2/3% stockholder vote for the amendment of certain provisions of our certificate of incorporation and for the adoption, amendment and repeal of our by-laws;

 

·

provisions barring stockholders from calling a special meeting of stockholders or requiring one to be called;

 

·

elimination of the right of our stockholders to act by written consent; and

 

·

provisions prescribing advance notice procedures for stockholders’ nominations of directors and proposals for consideration at meetings of stockholders.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

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 directors and officers 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;

 

·

the ability of our directors and officers to generate a number of potential investment opportunities;

 

·

our public securities’ potential liquidity and trading;

 

·

the listing or delisting of our securities from the American Stock Exchange or the ability to have our securities listed on the American Stock Exchange or any other securities exchange following our initial business combination;

 

·

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.

 

 

 

 

		Without Over-Allotment Option			Over-Allotment Option Exercised
Gross proceeds:
Gross proceeds from units offered to public		$	150,000,000		$	172,500,000
Gross proceeds from insider warrants sold in the private placement			4,750,000			4,750,000
Total gross proceeds		$	154,750,000		$	177,250,000
Offering expenses:
Underwriting commissions (7.0% of gross proceeds from units offered to the public)(1)		$	10,500,000		$	12,075,000
Legal fees and expenses			350,000			350,000
Accounting fees and expenses			70,000			70,000
Printing and engraving expenses			100,000			100,000
SEC registration fee			6,770			6,770
FINRA filing fee			17,750			17,750
AMEX listing fees			70,000			70,000
Miscellaneous expenses			135,480			135,480
Total offering expenses		$	11,250,000		$	12,825,000
Proceeds after offering expenses		$	143,500,000		$	164,425,000
Net offering and private placement proceeds held in trust		$	148,500,000		$	170,212,500
Deferred underwriting discount held in trust			5,250,000			6,037,500
Net offering proceeds not held in trust			250,000			250,000
Percentage of gross offering proceeds held in trust			99.0	%		98.7	%
Fees payable to AAM for office space and administrative services ($10,000 per month for 30 months (assuming maximum extension of the period of time to complete our initial business combination)					$	300,000
Working capital to cover miscellaneous expenses (potentially including deposits or down payments for a proposed initial business combination, legal, accounting and other expenses, including due diligence expenses and reimbursement of out-of-pocket expenses incurred in connection with the investigation, structuring and negotiation of our initial business combination, director and officer liability insurance premiums and reserves, legal and accounting fees relating to SEC reporting obligations, brokers’ retainer fees, consulting fees and finder’s fees)(2)					$	1,700,000
Total					$	2,000,000

(1)

The underwriters have agreed to defer $5,250,000 of their underwriting commissions (or $6,037,500 if the over-allotment option is exercised in full), which equals 3.5% of the gross proceeds of this offering, until completion of our initial business combination. Upon completion of our initial business combination, $5,250,000, which constitutes the underwriters’ deferred commissions (or $6,037,500 if the underwriters’ over-allotment option is exercised in full), reduced pro-ratably by the exercise of stockholder conversion rights, 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, general corporate purposes, 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.

(2)	$2,000,000 of interest income earned (after taxes payable) on the amounts held in the trust account will be available to us to pay for our working capital and other requirements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		Shares Purchased						Total Consideration						Average Price Per Share
		Number(1)			Percentage			Amount			Percentage
Founders			3,750,000			20%		$	25,000			0.02%		$	0.007
Investors in this offering			15,000,000			80%			150,000,000			99.98%			10.000
Total			18,750,000			100%		$	150,025,000			100%

 

(1)	Assumes the non-exercise of the underwriters’ over-allotment option and the related forfeiture of 562,500 founder units.

 

 

 

 

Public offering price		$	10.00
Net tangible book value before this offering and sale of insider warrants			(0.02	)
Increase attributable to investors in this offering and sale of insider warrants			7.08
Pro forma net tangible book value after this offering and sale of insider warrants			7.06
Dilution to investors in this offering not exercising conversion rights		$	2.94

 

Numerator:
Net tangible book value before this offering and sale of insider warrants		$	(86,000	)
Offering costs incurred in advance and excluded from tangible book value before this offering .			110,000
Net proceeds from this offering and sale of insider warrants(1)			148,750,000
Less: Deferred underwriting discounts and commissions to be paid upon consummation of an initial business combination(2)			(3,675,000	)
Less: Proceeds held in trust subject to conversion to cash ($9.90 x 4,499,999)			(44,549,990	)
Total net tangible book value after this offering and the sale of the insider warrants		$	100,549,010
Denominator:
Shares of common stock outstanding prior to this offering(3)			3,750,000
Shares of common stock included in the units being sold in this offering			15,000,000
Less: Shares subject to conversion (15,000,000 x 30.0% - one share)			(4,499,999	)
			14,250,001

 

(1)	Assumes no exercise of the underwriters’ over-allotment option and excludes 562,500 founder units subject to forfeiture. Includes $250,000 of offering proceeds not held in the trust account for our benefit.

 

(2)

Assumes maximum conversion to cash of shares subject to conversion (4,499,999 shares) in connection with our business combination and reflects the corresponding pro rata reduction in the deferred underwriting discounts and commissions to be paid upon consummation of an initial business combination to approximately $3,675,000, or $0.35 per share.

 

(3)	Assumes that 562,500 founder shares are forfeited due to the non-exercise underwriters’ over-allotment option.

 

 

 

 

·

at February 20, 2008; and

 

·

as adjusted to give effect to the sale of our units in this offering and the sale of insider warrants in the private placement, the application of the estimated net proceeds derived from the sale of those securities, and the forfeiture of 562,500 founder units assuming that the underwriters do not exercise any portion of their over-allotment option.

 

		As of February 20, 2008
		Actual			As Adjusted(1)
Note payable to founders(2)		$	200,000
Deferred underwriting discount(3)			—		$	3,675,000
Common stock subject to possible conversion, 0 and 4,499,999 shares, shares at conversion value(4)		$	—		$	44,549,990
Stockholders’ equity (deficit):(5)
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued or outstanding			—			—
Common stock, $0.0001 par value, 225,000,000 shares authorized; 4,312,500 shares issued and outstanding; 14,250,001 shares issued and outstanding (excluding 4,499,999 shares subject to possible conversion), as adjusted			431			1,425
Additional paid-in capital			24,569			100,548,585
Deficit accumulated during the development stage			(1,000	)		(1,000	)
Total stockholders’ equity			24,000			100,549,010
Total capitalization		$	224,000		$	148,774,000

 

(1)	Assumes that the underwriters’ over-allotment option is not exercised and 562,500 founder units are forfeited by our founders.

 

(2)	On February 20, 2008, we issued a promissory note in the amount of $200,000 in favor of our founders. This note does not bear interest and is due on the earlier of (i) 60 days following the consummation of this offering and (ii) February 28, 2009.

 

(3)

For purposes of presentation, this table assumes maximum conversion to cash of shares subject to conversion (4,499,999 shares) in connection with our business combination and reflects the corresponding pro rata reduction in the deferred underwriting discounts and commissions to be paid upon consummation of an initial business combination to approximately $3,675,000, or $0.35 per share.

 

(4)

If we complete our initial business combination, the conversion rights afforded to our public stockholders (but not to our founders, either with respect to their founder shares or any shares of common stock purchased in this offering or the aftermarket) may result in the conversion to cash of up to, but less than, 30% of the aggregate number of shares of common stock included in the units issued in this offering at a per-share conversion price equal to the amount then on deposit in the trust account, including any interest accrued thereon (after taxes payable on such interest income and after release of up to $2,000,000 of interest earned to fund our working capital and other requirements), as of two business days prior to the proposed completion of our initial business combination divided by the number of shares of common stock sold included in the units in this offering then outstanding.

 

(5)	Includes an aggregate of $4,750,000 payable on or prior to the date of the final prospectus for this offering by our founders for their purchase of an aggregate of 4,750,000 insider warrants from us at a purchase price of $1.00 per warrant.

 

 

 

 

 

 

 

·

may significantly dilute the equity interest of our existing stockholders;

 

·

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to the holders of our common stock;

 

·

will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present directors and officers;

 

·

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 our company; and

 

·

may adversely affect prevailing market prices for our common stock and/or warrants.

 

 

·

default and foreclosure on our assets if our operating cash flows after our initial business combination are insufficient to repay our debt obligations;

 

·

acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt securities contain covenants that require the maintenance of certain financial ratios or reserves, and we breach any such covenant without a waiver or renegotiation thereof;

 

·

our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

 

·

covenants that limit our ability to acquire capital assets or make additional acquisitions;

 

·

our inability to obtain additional financing if the debt security contains covenants restricting our ability to obtain such additional financing while such 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, working capital, 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 working capital, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes; and

 

·

other disadvantages compared to our competitors who have less debt.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

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 issuable upon exercise of significant estimates; and

 

·

documentation of accounting policies and procedures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

Mr. Randall Yanker, our chief executive officer, president and director, has more than 25 years of trading, investment management and business development experience with various investment banks including Salomon Brothers, Swiss Bank Corporation and Lehman Brothers. At Swiss Bank Corporation and Lehman Brothers, he was responsible for the initial business development of each firm’s hedge fund alternative asset management business, both of which grew significantly under his leadership. He is a co-founder and senior partner of AAM.

 

 

·

Mr. Elliot Stein Jr., the chairman of our board of directors, has been an executive and an investor in various companies for more than 30 years, and during that time has served as an officer and director in various private and publicly-owned companies in multiple industries, including media, finance, retail and manufacturing. He presently serves on the boards of directors of Apollo Investment Corporation and several other privately owned companies.

 

·

Mr. Rodney Yanker, our chief operating officer and secretary, has more than 25 years of management consulting, direct investing, family office management, infrastructure building and operational expertise with leading firms including Deloitte & Touche and Ramsey Financial. For the past five years, he has served on the board of managers for certain publicly registered funds of Ivy Asset Management, a subsidiary of Bank of New York Mellon. He is a co-founder and senior partner of AAM.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

Experienced Management Teams. We will seek to acquire businesses with experienced, proven management teams that have created an effective business culture and implemented best practices in their operations such as investing capital, analyzing risk and underwriting. We intend to focus particularly on alternative asset managers who, as a result of their proprietary trading and management activities, have valuable insights and access to information about the U.S. and global economies and capital markets. We believe that, in many cases, the industry expertise of our officers and directors would be used to complement, rather than replace, the management team of the acquired business.

 

·

Competitive Industry Position. We will seek to acquire businesses or operations that have strong market positions in their respective areas of the alternative asset management sector. For example, we will focus on businesses that have leading or niche market positions and that demonstrate sustainable advantages when compared to their competitors. We will analyze the strengths and weaknesses of target businesses relative to their competitors, and will evaluate factors such as growth prospects, competitive dynamics, level of consolidation, need for capital investment and barriers to entry. We will also consider businesses with strong and scalable platforms that are poised to gain from our industry expertise and relationship base.

 

 

·

Proven Operating Track Record. We will seek to acquire established businesses with a history of, or potential for, generating strong and stable free cash flows. We will focus on targets with stable, predictable, recurring revenue streams and low working capital and capital expenditure requirements. We may acquire a business that has not performed well in the past, but our expectation would be that, if we did so, we would believe it to be poised for future growth. While we do not intend to acquire a start-up company, we would not be precluded from doing so in appropriate circumstances.

 

·

Potential to Increase Profitability. We will seek to acquire a business that has potential to significantly improve profitability, where we could assist in improving performance by augmenting asset growth or by applying our proprietary management and risk evaluation strategies to enhance the target’s existing capabilities. We may consider businesses in need of refinancing or recapitalization that demonstrate significant potential for strong future financial performance.

 

 

 

 

 

·

Traditional asset management, in general, involves managing portfolios of actively traded equity, fixed income and/or derivative securities. Investment objectives may include total return, capital appreciation, current income, and/or replicating the performance of a specific index. Such portfolios may include investment companies registered under the Investment Company Act of 1940 (e.g., mutual funds, closed-end funds, or exchange-traded funds) or separate accounts managed on behalf of individuals or institutions. Managers of such portfolios are usually compensated at a contracted fee based on the assets under management, generally without regard to performance of the investments held in the portfolio. In the United States, portfolio managers are typically registered with the SEC under the Investment Advisers Act of 1940.

 

·

Alternative asset management, in general, involves managing portfolios using various investment strategies where the common element is the manager’s goal of delivering investment performance on an absolute return basis within certain predefined risk parameters. These investment returns tend to have a lower correlation to the broader market than traditional asset management strategies. Alternative asset management portfolios may be held through funds organized as limited partnerships, or other business forms, separate accounts managed on behalf of individuals or institutions, or investment companies registered under the Investment Company Act of 1940 (e.g., business development companies). Alternative asset management businesses are typically exempt from registration with regulatory authorities. In the United States, such businesses may or may not be registered with the SEC under the Investment Advisers Act of 1940, depending upon certain factors, such as the registration status of such portfolios, number of clients and the amount of assets under management. Alternative asset management portfolios are commonly referred to by categories such as hedge funds, private equity funds, real estate funds and fund of funds, among others. Alternative asset management companies often receive a significant performance fee (incentive income) component and investor expectations are often framed in terms of absolute returns, rather than returns which are measured in relation to benchmark indices.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

results of operations and potential for increased profitability and growth;

 

·

brand recognition and potential;

 

·

size, secular growth rate and strategic fundamentals of the target company’s industry;

 

·

competitive dynamics including barriers to entry, future competitive threats and the target company’s competitive position;

 

·

product positioning and life cycle;

 

·

development of detailed projections, quantification of sensitivity of drivers of growth, and profit enhancement;

 

·

attractiveness of the target company’s cash flow generation capability and return on capital employed;

 

·

reasonableness of the valuation with a particular focus on the multiple of free cash flow;

 

·

exit prospects;

 

·

quality and depth of the management team as it relates to current company operations, as well as the envisioned company in the future;

 

·

existing distribution arrangements and the potential for expansion;

 

 

·

proprietary aspects of products and the extent of intellectual property or other protection for products or formulas;

 

·

regulatory environment of the industry;

 

·

costs associated with effecting the initial business combination; and

 

·

industry leadership, sustainability of market share and attractiveness of market sectors in which target business participates.

 

 

 

 

 

 

 

 

 

 

 

·

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.

 

 

 

 

 

 

 

 

 

 

 

·

a majority of the shares of common stock voted by the public stockholders are voted in favor of the initial business combination;

 

·

conversion rights have been exercised with respect to up to, but less than, 30% of the shares of common stock issued in this offering (calculated on a cumulative basis including the shares as to which conversion rights were exercised in connection with either (i) a stockholder vote, if any, to approve an extension of the time period within which we must complete our initial business combination or (ii) the stockholder vote to approve our initial business combination); and

 

·

the amendment to our amended and restated certificate of incorporation to provide for our perpetual existence is approved by holders of a majority of our outstanding shares of common stock.