As of May ~~10, 2016,~~5, 2017, there were ~~62,531,250~~89,281,617 shares of the Company’s common stock issued and outstanding.

~~WL ROSS HOLDING CORP.~~

TABLE OF CONTENTS



PART ~~1 –~~ I—FINANCIAL INFORMATION		~~F-1~~
~~ITEM 1. FINANCIAL STATEMENTS~~Forward Looking Statements		~~F-1 - F-15~~ 6
~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Item 1. Financial Statements (unaudited)		1 7
~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~	7
~~ITEM 4. CONTROLS AND PROCEDURES~~	7
~~PART II – OTHER INFORMATION~~	8
~~ITEM 1. LEGAL PROCEEDINGS~~	8
~~ITEM 1A. RISK FACTORS~~	8
~~ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~	8
~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~	9
~~ITEM 4. MINE SAFETY DISCLOSURES~~	9
~~ITEM 5. OTHER INFORMATION~~	10
~~ITEM 6. EXHIBITS~~	10

Table of Contents

Glossary

The following terms and abbreviations appearing in the text of this report have the meanings indicated below.



2016 LTIP	The Nexeo Solutions, Inc. 2016 Long Term Incentive Plan
ABL Borrowers	Holdings, Sub Holding and Solutions together with Nexeo Solutions Canada Corporation
ABL Facility	The asset-based credit facility pursuant to that certain asset-based credit agreement by and among the ABL Borrowers, Bank of America, N.A., as administrative agent and the lenders party thereto and the other parties thereto
ADA Purchase Agreement	The Ashland Distribution Acquisition purchase agreement
ASC	The FASB Accounting Standards Codification
Ashland	Ashland Inc. and its subsidiaries
ASU	Accounting Standards Update issued by the FASB
Blocker	TPG Accolade Delaware, L.P.
Blocker Merger	The merger of Blocker Merger Sub into Blocker on June 9, 2016, immediately following the Company Merger, with Blocker continuing as the surviving entity
Blocker Merger Sub	Neon Acquisition Company LLC, which was a wholly-owned subsidiary of WLRH at the time of the Blocker Merger
Business Combination	The business combination between WLRH and Holdings pursuant to the Merger Agreement, which was consummated on the Closing Date
CAD	Canadian dollar
Canadian Tranche	Canadian tranche of the ABL Facility
Closing Date	June 9, 2016
Company / Successor / Nexeo	Nexeo Solutions, Inc. (f/k/a WL Ross Holding Corp.) and its consolidated subsidiaries
Company Merger	The merger of Company Merger Sub with and into Holdings consummated on June 9, 2016, with Holdings continuing as the surviving entity
Company Merger Sub	Neon Holding Company LLC, which was a wholly-owned subsidiary of WLRH at the time of the Company Merger
Credit Facilities	The ABL Facility and the Term Loan Facility, collectively
Deferred Cash Consideration	The deferred payment to be made in cash to the Selling Equityholders pursuant to the Merger Agreement, where such deferred cash payments will generally be in an amount equal to the Company’s prevailing stock price at the time that the Company pays such deferred cash payments multiplied by the number of Excess Shares or as otherwise set forth in the Merger Agreement
Distribution Business	The global distribution business purchased by the Predecessor from Ashland
DTSC	California Department of Toxic Substances Control
EBITDA	Earnings before interest, tax, depreciation and amortization
EMEA	Europe, Middle East and Africa
ERP	Enterprise resource planning
Excess Shares	The 5,178,642 shares of Company common stock used to calculate the Deferred Cash Consideration payable to the Selling Equityholders pursuant to the Merger Agreement
Exchange Act	U.S. Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FILO Tranche	$30.0 million tranche within the ABL Facility for non-Canadian foreign subsidiaries to issue loans and letters of credit
Founder Shares	The 12,506,250 shares of Company common stock issued to the Sponsor at the time of the IPO
GDP	Gross domestic product
Holdings	Nexeo Solutions Holdings, LLC
IPO	The initial public offering of WLRH, consummated on June 11, 2014

Table of Contents



Merger Agreement	Agreement and Plan of Merger, as amended, by and among WLRH, Blocker Merger Sub, Company Merger Sub, Holdings, Blocker, and New Holdco dated as of March 21, 2016
Mergers	The Company Merger and the Blocker Merger, collectively
Montgomery Lease	The Company’s leased facility in Montgomery, Illinois commencing in the first fiscal quarter of 2017
NASDAQ	NASDAQ Stock Market
New Holdco	Nexeo Holdco, LLC
Nexeo Plaschem	Nexeo Plaschem (Shanghai) Co., Ltd., a wholly-owned subsidiary of the Company
NLRB	U.S. National Labor Relations Board
Notes	8.375% Senior Subordinated Notes of the Predecessor due 2018
Other Retained Remediation Liabilities	Under the ADA Purchase Agreement, Ashland agreed to retain other environmental remediation liabilities unknown at the closing of the Ashland Distribution Acquisition related to the Distribution Business for which Ashland receives notice prior to the fifth anniversary of the closing
Performance-Based Units	Units within the Predecessor Equity Plan that vest in accordance with a performance-based schedule
Peso	Mexican peso
Predecessor	Holdings and its subsidiaries for the periods prior to the Closing Date
Predecessor ABL Facility	Holdings asset-based credit facility which was terminated in connection with the Business Combination
Predecessor Equity Plan	Predecessor restricted equity plan
Predecessor Term Loan Facility	Holdings’ senior secured term loan credit facility which was terminated in connection with the Business Combination
PSLRA	U.S. Private Securities Litigation Reform Act of 1995
PSU	Performance share unit issued under the 2016 LTIP
RCRA	U.S. Resource Conservation and Recovery Act
Retained Remediation Liabilities	Under the ADA Purchase Agreement, collectively, the Retained Specified Remediation Liabilities and the Other Retained Remediation Liabilities
RMB	Chinese renminbi
RSU	Restricted stock unit issued under the 2016 LTIP
Ryder	Ryder Truck Rental, Inc.
Ryder Lease	Lease Agreement entered into by and between the Predecessor and Ryder in May 2015 for certain transportation equipment
SAFE	People’s Republic of China State Administration of Foreign Exchange
SEC	U.S. Securities and Exchange Commission
Secured Net Leverage Ratio	The ratio of Consolidated Total Indebtedness divided by EBITDA (terms as defined in the Term Loan Facility agreement)
Securities Act	U.S. Securities Act of 1933, as amended
Selling Equityholders	The holders of equity interests in Holdings (other than Blocker) and the holders of equity interests in Blocker, in each case, as of the time immediately prior to the Business Combination
Solutions	Nexeo Solutions, LLC
Sponsor	WL Ross Sponsor LLC, the sponsor entity of WLRH prior to the Business Combination
Term Agent	Bank of America, N.A. as administrative agent and collateral agent of the Term Loan Facility
Term Loan Facility	Term loan credit facility pursuant to that certain credit agreement by and among Holdings, Solutions, Sub Holding, the Term Agent, the other agents party thereto and the lenders party thereto
Time-Based Units	Units issued under the Predecessor’s Equity Plan
TLB Amendment No. 1	The amendment to the Term Loan Facility dated March 22, 2017
TPG	TPG Capital, L.P. together with its affiliates, including TPG Accolade
TPG Accolade	TPG Accolade, L.P.

Table of Contents



TRA	The Tax Receivable Agreement entered into in connection with the Business Combination, by and between the Company and the Selling Equityholders, dated as of June 9, 2016
Ultra Chem Acquisition	The April 3, 2017 acquisition of the equity interests of the Mexico City, Mexico based chemicals distribution business of Ultra Chem, S. de R.L. de C.V. and its related entities pursuant to the stock purchase agreement dated March 9, 2017
U.S.	United States of America
USD	U.S. Dollar
U.S. GAAP	U.S. Generally accepted accounting principles
U.S. Tranche	U.S. Tranche of the ABL Facility
WLRH	WL Ross Holding Corp.

Table of Contents

Forward-Looking Statements

Certain information and statements contained in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of the PSLRA codified at Section 27A of the Securities Act, and Section 21E of the Exchange Act. This statement is included for purposes of complying with the safe harbor provisions of the PSLRA. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical facts. These statements may be identified, without limitation, by the use of forward-looking terminology such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “could,” “would” and similar expressions. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties, and we urge you not to place undue reliance on any forward-looking statements, which reflect management’s current expectations and assumptions about future events, and which are based on currently available information as to the timing and outcome of future events. Certain forward-looking statements are included in this Quarterly Report on Form 10-Q, principally in the section captioned “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 filed with the SEC on December 8, 2016.

These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Unless otherwise indicated or the context otherwise requires, comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could have material adverse effects on our future results. Our future results will depend upon various other risks and uncertainties, including those described in the section captioned “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 filed with the SEC on December 8, 2016. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement.

Table of Contents

PART ~~1 – FINANCIAL INFORMATION~~

Item 1. Financial Statements

~~ITEM 1 – FINANCIAL STATEMENTS~~

~~WL ROSS HOLDING CORP.~~

~~CONDENSED BALANCE SHEETS~~

March 31, 2016 December 31, 2015
(unaudited) (audited)
ASSETS:
Current assets:
Cash $ 187 $ 10,000
Prepaid expenses 58,670 48,654
Total current assets 58,857 58,654
Noncurrent assets:
Investments and cash held in trust account 501,023,695 500,647,797

Total assets $ 501,082,552 $ 500,706,451

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accrued expenses $ 1,619,413 $ 386,811
Sponsor convertible note 744,714 310,644
Sponsor promissory note 235,032 -
State franchise tax accrual 45,000 68,294
Total current liabilities 2,644,159 765,749

Other liabilities:
Deferred underwriting compensation 18,309,150 18,309,150

Total liabilities 20,953,309 19,074,899

Common stock subject to possible redemption; 47,512,924 and 47,663,155 shares at March 31, 2016 and December 31, 2015, respectively (at redemption value of $10.00 per share) 475,129,240 476,631,550

Stockholders' equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding - -
Common stock, $0.0001 par value; 200,000,000 shares authorized, 15,018,326 and 14,868,095 shares issued and outstanding (excluding 47,512,924 and 47,663,155 subject to possible redemption) at March 31, 2016 and December 31, 2015, respectively 1,501 1,486
Additional paid-in-capital 7,870,509 6,368,214
Accumulated deficit (2,872,007 ) (1,369,698 )
Total stockholders' equity 5,000,003 5,000,002
Total liabilities and stockholders' equity $ 501,082,552 $ 500,706,451

~~See~~

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited, in millions, except share amounts and par value)



	March 31, 2017			September 30, 2016
Current Assets
Cash and cash equivalents	$	95.3		$	47.5
Accounts and notes receivable (net of allowance for doubtful accounts of $1.4 million and $1.4 million, respectively)	540.4			474.8
Inventories	336.4			315.8
Other current assets	23.8			25.7
Total current assets	995.9			863.8

Non-Current Assets
Property, plant and equipment, net	327.3			322.6
Goodwill	661.0			665.7
Other intangible assets, net of amortization	211.2			215.0
Deferred income taxes	1.6			1.1
Other non-current assets	10.9			10.7
Total non-current assets	1,212.0			1,215.1
Total Assets	$	2,207.9		$	2,078.9

Current Liabilities
Short-term borrowings, current portion of long-term debt and capital lease obligations	$	47.1		$	47.7
Accounts payable	353.3			325.8
Accrued expenses and other liabilities	37.6			45.7
Due to related party pursuant to contingent consideration obligations	5.1			—
Income taxes payable	2.3			2.0
Total current liabilities	445.4			421.2

Non-Current Liabilities
Long-term debt and capital lease obligations, less current portion, net	871.3			765.6
Deferred income taxes	16.4			23.1
Due to related party pursuant to contingent consideration obligations	135.9			118.4
Other non-current liabilities	7.5			5.8
Total non-current liabilities	1,031.1			912.9
Total Liabilities	1,476.5			1,334.1

Commitments and contingencies (see Note 13)

Equity
Preferred stock, $0.0001 par value (1,000,000 shares authorized, none issued and outstanding as of March 31, 2017 and September 30, 2016)	—			—
Common stock, $0.0001 par value (300,000,000 shares authorized; 89,276,183 shares issued and outstanding as of March 31, 2017 and 89,286,936 shares issued and outstanding as of September 30, 2016)	—			—
Additional paid-in capital	761.6			758.9
Accumulated deficit	(19.0		)	(9.6		)
Accumulated other comprehensive loss	(11.2		)	(4.5		)
Total equity	731.4			744.8
Total Liabilities and Equity	$	2,207.9		$	2,078.9

The accompanying notes ~~to condensed financial statements.~~

are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

~~WL ROSS HOLDING CORP.~~

~~CONDENSED STATEMENTS OF OPERATIONS~~

~~(unaudited)~~

For the Three Months Ended
March 31, 2016 For the Three Months Ended
March 31, 2015

Revenue $ - $ -
Professional fees and other expenses (1,823,998 ) (165,820 )
State franchise taxes, other than income tax (45,107 ) (43,890 )
Interest on Sponsor convertible note (9,070 ) -
Interest on Sponsor promissory note (32 ) -
Loss from operations (1,878,207 ) (209,710 )
Other income - Interest income 375,898 83,095
Net loss attributable to common shares $ (1,502,309 ) $ (126,615 )

Weighted average common shares outstanding, basic and
diluted (excluding shares subject to possible redemption) 14,869,747 14,834,975

Net loss per common share: $ (0.10 ) $ (0.01 )
Basic and diluted

~~See~~

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited, in millions, except share and per share data)



	Successor						Predecessor
	Three Months Ended March 31, 2017			Six Months Ended March 31, 2017			Three Months Ended March 31, 2016			Six Months Ended March 31, 2016
Sales and operating revenues	$	917.7		$	1,712.5		$	862.2		$	1,689.9
Cost of sales and operating expenses	815.5			1,525.9			760.9			1,493.4
Gross profit	102.2			186.6			101.3			196.5
Selling, general and administrative expenses	80.0			154.5			76.7			151.4
Transaction related costs	0.3			1.1			6.3			7.3
Change in fair value of contingent consideration obligations	10.0			20.6			—			—
Operating income	11.9			10.4			18.3			37.8
Other income, net	0.2			2.6			0.9			2.6
Interest income (expense)
Interest income	0.1			0.2			0.1			0.1
Interest expense	(12.5		)	(24.5		)	(15.5		)	(31.1		)
Net income (loss) from continuing operations before income taxes	(0.3		)	(11.3		)	3.8			9.4
Income tax expense (benefit)	0.8			(1.9		)	1.8			3.1
Net income (loss) from continuing operations	(1.1		)	(9.4		)	2.0			6.3
Net income from discontinued operations, net of tax	—			—			0.1			0.1
Net Income (Loss) Attributable to Nexeo Solutions, Inc.	$	(1.1	)	$	(9.4	)	$	2.1		$	6.4

Net loss per share available to common stockholders
Basic and diluted	(0.01		)	(0.12		)
Weighted average number of common shares outstanding
Basic and diluted	76,746,168			76,746,168

The accompanying notes ~~to condensed financial statements.~~

are an integral part of these Condensed Consolidated Financial Statements.

~~WL ROSS HOLDING CORP.~~

~~CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY~~

~~For the three months ended March 31, 2016~~

Table of Contents

Nexeo Solutions, Inc. and ~~March 31, 2015~~

~~(unaudited)~~

Common Stock Additional
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
Balances, January 1, 2016 14,868,095 $ 1,486 $ 6,368,214 $ (1,369,698 ) $ 5,000,002

Change in shares subject to possible redemption 150,231 15 1,502,295 — 1,502,310

Net loss for the period ended March 31, 2016 — — — (1,502,309 ) (1,502,309 )
Balances, March 31, 2016 15,018,326 $ 1,501 $ 7,870,509 $ (2,872,007 ) $ 5,000,003

Common Stock Additional
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
Balances, January 1, 2015 14,834,834 $ 1,483 $ 6,035,607 $ (1,037,086 ) $ 5,000,004

Change in shares subject to possible redemption 12,662 1 126,619 — 126,620

Net loss for the period ended March 31, 2015 — — — (126,615 ) (126,615 )
Balances, March 31, 2015 14,847,496 $ 1,484 $ 6,162,226 $ (1,163,701 ) $ 5,000,009

~~See~~Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, in millions)



	Successor						Predecessor
	Three Months Ended March 31, 2017			Six Months Ended March 31, 2017			Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
Net income (loss)	$	(1.1	)	$	(9.4	)	$	2.1	$	6.4
Unrealized foreign currency translation gain (loss), net of tax	5.7			(7.0		)	6.1		(0.6		)
Unrealized gain on interest rate hedges, net of tax	0.3			0.3			0.1		0.2
Other comprehensive income (loss), net of tax	6.0			(6.7		)	6.2		(0.4		)
Total comprehensive income (loss), net of tax attributable to Nexeo Solutions, Inc.⁽¹⁾	$	4.9		$	(16.1	)	$	8.3	$	6.0

⁽¹⁾The tax effects for each component presented are not material.

The accompanying notes ~~to condensed financial statements.~~

are an integral part of these Condensed Consolidated Financial Statements.

~~WL ROSS HOLDING CORP.~~

~~CONDENSED STATEMENTS OF CASH FLOWS~~

~~(unaudited)~~

For the Three
Months Ended
March 31, 2016 For the Three
Months Ended
March 31, 2015
Cash flows from operating activities:
Net loss $ (1,502,309 ) $ (126,615 )
Adjustments to reconcile net loss to net cash used in operations:
Increase in prepaid expenses (10,016 ) (5,199 )
Decrease in accrued state franchise tax (23,294 ) (95,722 )
Increase in accrued expenses 1,232,602 123,550
Accrued interest on Sponsor convertible note 9,070 -
Accrued interest on Sponsor promissory note 32 -
Amortization of original issue discount (303,932 ) (83,081 )
Interest on investments (71,966 ) (14 )
Net cash used in operating activities (669,813 ) (187,081 )

Cash flows from financing activities:
Proceeds from Sponsor convertible note 425,000 -
Proceeds from Sponsor promissory note 235,000 -
Net cash provided by financing activities 660,000 -
Decrease in cash (9,813 ) (187,081 )
Cash at beginning the period 10,000 801,415
Cash at end of the period $ 187 $ 614,334

Supplemental disclosure of cash flow information
Cash paid for state franchise taxes $ (68,401 ) $ (139,612 )

~~See~~

Table of Contents

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Statement of Equity

(Unaudited, in millions, except share amounts)



	Common Stock				Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
	Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance at September 30, 2016	89,286,936		$	—	$	758.9	$	(9.6	)	$	(4.5	)	$	744.8
Forfeiture of restricted stock award	(10,753	)	—		—		—			—			—
Equity-based compensation	—		—		2.7		—			—			2.7
Comprehensive loss:
Net loss	—		—		—		(9.4		)	—			(9.4		)
Other comprehensive loss	—		—		—		—			(6.7		)	(6.7		)
Balance at March 31, 2017	89,276,183		$	—	$	761.6	$	(19.0	)	$	(11.2	)	$	731.4

The accompanying notes ~~to condensed financial statements.~~

are an integral part of these Condensed Consolidated Financial Statements.

~~WL ROSS HOLDING CORP.~~

Table of Contents

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~Organization and Business Operations~~

~~Organization~~

Nexeo Solutions, Inc. and ~~General~~

~~WL Ross Holding Corp. (the~~Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited, in millions)



	Successor			Predecessor
	Six Months Ended March 31, 2017			Six Months Ended March 31, 2016
Cash flows from operations
Net income (loss) from continuing operations	$	(9.4	)	$	6.3
Adjustments to reconcile to cash flows from operations:
Depreciation and amortization	34.6			27.4
Debt issuance costs amortization, debt issuance costs write-offs and original issue discount amortization	2.0			4.4
Provision for bad debt	(0.1		)	1.1
Deferred income taxes	(5.6		)	0.9
Equity-based compensation expense	2.7			0.6
Change in fair value of contingent consideration obligations	20.6			—
(Gain)/loss on sale of property and equipment	0.1			(1.9		)
Gain on debt extinguishment, net	—			(0.6		)
Gain related to reimbursements of certain capital expenditures incurred	(2.7		)	—
Changes in assets and liabilities:
Accounts and notes receivable	(70.4		)	20.7
Inventories	(23.7		)	6.3
Other current assets	1.9			(3.7		)
Accounts payable	33.8			(3.7		)
Related party payable	—			(0.2		)
Accrued expenses and other liabilities	(10.6		)	(10.7		)
Changes in other operating assets and liabilities, net	0.9			(3.3		)
Net cash provided by (used in) operating activities	(25.9		)	43.6
Cash flows from investing activities
Additions to property and equipment	(14.5		)	(9.4		)
Proceeds from the disposal of property and equipment	0.1			2.0
Proceeds from reimbursement of certain capital expenditures incurred	2.9			—
Cash paid for acquisitions	(5.1		)	—
Net cash used in investing activities	(16.6		)	(7.4		)
Cash flows from financing activities
Repurchases of membership units	—			(0.1		)
Proceeds from short-term debt	19.5			18.6
Repayments of short-term debt	(19.1		)	(15.0		)
Proceeds from issuance of long-term debt	385.5			207.3
Repayments of long-term debt and capital lease obligations	(293.6		)	(314.7		)
Payments of debt issuance costs	(1.3		)	—
Net cash provided by (used in) financing activities	91.0			(103.9		)
Effect of exchange rate changes on cash and cash equivalents	(0.7		)	(0.3		)
Increase (decrease) in cash and cash equivalents	47.8			(68.0		)
Cash and cash equivalents at the beginning of the period	47.5			127.7
Cash and cash equivalents at the end of the period	$	95.3		$	59.7
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	24.7		$	26.4
Cash paid during the period for taxes	$	2.6		$	2.9
Supplemental disclosure of non-cash investing activities:
Non-cash capital expenditures	$	15.8		$	15.8
Non-cash intangible assets acquired	$	3.4		$	—
Supplemental disclosure of non-cash financing activities:
Non-cash capital lease obligations, net	$	13.4		$	13.8

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

Nexeo Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited, currencies in millions, except per share amounts)

1. Basis of Presentation and Nature of Operations

Basis of Presentation

Nexeo Solutions, Inc. (together with its subsidiaries, the “Company”) is the result of the business combination between WLRH and Holdings. WLRH was incorporated in Delaware on March 24, ~~2014. The Company~~2014 and was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more ~~businesses (the “Business Combination”). The Company has~~businesses. WLRH completed its IPO in June 2014, raising approximately $500.0 million in cash proceeds. WLRH neither engaged in any operations nor generated any revenue ~~to date. The Company’s management has broad discretion with respect~~prior to the Business Combination. ~~The Company’s sponsor is WL Ross Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The Company has selected December 31 as its fiscal year-end.~~

~~At March 31, 2016,~~

On the ~~Company had not commenced any operations. All activity for~~Closing Date, WLRH and Holdings and certain other parties consummated the ~~period from March 24, 2014 (inception) through March 31, 2016 relates~~Business Combination, pursuant to the Company’s formation, initial public offering (“Public Offering”) described below and efforts directed toward locating a suitable Business Combination. The Company will not generate any operating revenues until after the completion of its Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering.

~~Financing~~

~~The Company intends to finance a Business Combination~~Merger Agreement. In connection with ~~the proceeds from a $500,250,000 Public Offering (Note 3) and an $11,200,000 private placement (Note 4).~~

~~Upon~~ the closing of the ~~Public Offering~~Business Combination, WLRH changed its name from “WL Ross Holding Corp.” to “Nexeo Solutions, Inc.” and changed the ~~private placement, $500,250,000 was placed in a trust account with the Continental Stock Transfer & Trust Company (the “Trust Account”) acting as Trustee.~~

~~Trust Account~~

The Trust Account can be invested only in U.S. government treasury bills with a maturity of one hundred and eighty (180) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U.S. government obligations. As of March 31, 2016 and December 31, 2015 the Trust Account consisted of U.S. government treasury bills and investment in a money market fund.

ticker symbol for its common stock on NASDAQ from “WLRH” to “NXEO”.

The Company’s ~~amended~~financial statement presentation distinguishes a “Predecessor” for the periods prior to the Closing Date and ~~restated certificate of incorporation provides that, other than~~a “Successor” for the ~~withdrawal of interest to pay taxes, if any, none~~periods after the Closing Date. In the Business Combination, Holdings was identified as the acquiree and Predecessor and WLRH, subsequently renamed “Nexeo Solutions, Inc.”, was identified as the acquirer and Successor. As a result of the ~~funds held in trust will be released until~~application of the ~~earlier of: (i)~~acquisition method of accounting as of the ~~completion~~Closing Date, the condensed consolidated financial statements for the Predecessor period and for the Successor period are presented on a different basis and are, therefore, not comparable. See Note 3 for further discussion of the Business ~~Combination; or (ii) the redemption of 100% of the shares of common stock included~~Combination.

The Predecessor periods in the ~~units being sold in~~condensed consolidated financial statements represent the ~~Public Offering if the Company is unable to complete a Business Combination within 24 months from the closing~~operating results of ~~the Public Offering (June 11, 2016), subject to the requirements of law~~Holdings and ~~stock exchange rules.~~

~~Business Combination~~

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a Target Business. As used herein, “Target Business” must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the Company signing a definitive agreement in connection with the Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business daysits subsidiaries prior to the consummation of the Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by NASDAQ rules. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. However, in no event will the Company redeem or repurchase its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption or repurchase of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination, public stockholders will have the opportunity to have public shares redeemed or repurchased for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination or commencement of the tender offer, respectively, including interest but less taxes payable. As a result, such shares have been classified as common stock subject to possible redemption, in accordance with ASC 480, “Distinguishing Liabilities from Equity.”

Unless the Company’s stockholders vote to extend the time the Company has to complete a Business Combination, the Company will only have 24 months from the closing date of the Public Offering (June 11, 2016) to complete its Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest, but less taxes payable (less up to $50,000 of such net interest to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation.

The Sponsor has entered into letter agreements with the Company, pursuant to which it has waived its rights to participate in any redemption with respect to its initial shares; however, if the Sponsor or any of the Company’s officers, directors or affiliates acquire shares of common stock in or after the Public Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not complete a Business Combination within the required time period.

~~Proposed Nexeo Business Combination~~

On March 21, 2016 the Company entered into the Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Neon Acquisition Company LLC (“Blocker Merger Sub”), Neon Holding Company LLC (“Company Merger Sub”), Nexeo Solutions Holdings, LLC (“Nexeo”), Nexeo Holdco LLC (“New Holdco”) and TPG Accolade Delaware, L.P. (“Blocker”) to acquire Nexeo, a large global chemical and plastics distributor which provides broad logistics capabilities, in-depth market knowledge, dedicated technical expertise and environmental services. With operations worldwide, Nexeo has approximately 2,450 employees, connects a network of over 1,300 suppliers with a diverse base of more than 27,500 customers and offers over 23,000 products used in a broad cross-section of industries, including chemicals manufacturing, oil and gas, paints and coatings, automotive, healthcare and personal care (the “Proposed Nexeo Business Combination”). Pursuant to the provisions of the Company’s amended and restated certificate of incorporation, the Company currently has until June 11, 2016 to complete a Business Combination. However, in connection with the Proposed Nexeo Business Combination, the Company is currently in the process of seeking stockholder approval to extend the time the Company has to complete a Business Combination until August 20, 2016 (the “Extension”). If the Extension is approved by stockholders, the Company will file an amendment to the Company’s amended and restated certificate of incorporation providing for such additional time to complete a Business Combination.

~~F-6~~

Subject to the terms of the Merger Agreement and customary adjustments set forth therein, the aggregate purchase price for the Business Combination and related transactions is expected to be approximately $1,575,000,000, which amount will be reduced by, among other things, the aggregate amount of funds used to repay certain debt obligations of Nexeo and the assumption of capital lease obligations of Nexeo as set forth in the Merger Agreement. The consideration to be paid to holders of equity interests in Nexeo and Blocker as of the time immediately prior to the Proposed Nexeo Business Combination (“Selling Equityholders”) will be funded through a combination of cash and stock consideration. The amount of cash consideration is the sum of (i) cash held by Nexeo and certain of its subsidiaries at the closing of the Proposed Nexeo Business Combination, (ii) cash available to us from our Trust Account that holds the proceeds (including interest) of our IPO, and after giving effect to taxes payable, any redemptions that may be elected by any of our public stockholders for their pro rata share of the aggregate amount of funds on deposit prior to closing the Proposed Nexeo Business Combination and certain transaction fees and expenses in connection with the Proposed Nexeo Business Combination, including the payment of deferred underwriting commissions agreed to at the time of our IPO, (iii) the net proceeds of our anticipated debt financing and (iv) the anticipated proceeds from the sale of shares of newly issued common stock of the Company in a private placement (the “PIPE Investment”), less (i) certain transaction fees and expenses and (ii) the aggregate amount of funds paid to discharge certain debt obligations of Nexeo. The amount of stock consideration (the “Stock Consideration”), is a number of newly issued shares of our common stock, which shares will be valued at $10.00 per share for purposes of determining the aggregate number of shares payable to Selling Equityholders for their ownership interests therein. To the extent not utilized to consummate the Proposed Nexeo Business Combination or to repay the remainder of certain of Nexeo’s existing debt and capital lease obligations at the closing of the Proposed Nexeo Business Combination, the proceeds from our Trust Account, debt financing and PIPE Investment will be used for general corporate purposes, including, but not limited to, working capital for operations, capital expenditures and future potential acquisitions.

Under the Merger Agreement, Selling Equityholders will also receive at the closing of the Proposed Nexeo Business Combination as consideration from our Sponsor a portion of the Founder Shares issued to our Sponsor at the time of our IPO (the “Founder Shares Transfer”). Our Sponsor is providing this consideration (the “Founder Share Consideration”), in lieu of transferring such Founder Shares back to the Company for cancellation, in exchange for no consideration, and reissuance of such Founder Shares to Selling Equityholders by the Company. The Founder Shares transferred to Selling Equityholders in connection with the Proposed Nexeo Business Combination will be subject to the conditions and restrictions set forth in the Founder Share Transfer Letter Agreement (the “Founder Share Transfer Letter Agreement”), dated March 21, 2016, as may be amended from time to time, by and among Nexeo Holdco, LLC, Sponsor and the Company, the Shareholders’ and Registration Rights Agreement, dated as of March 21, 2016, as it may be amended from time to time, by and among New Holdco and certain of its affiliates, our Sponsor and the Company (the “SHRRA”), and the underwriting agreement that the Company entered into with the underwriters at the time of our IPO. The number of Founder Shares to be transferred to Selling Equityholders by our Sponsor will be a pro rata portion of 12,506,250 Founder Shares (less 30,000 Founder Shares being transferred to our independent directors) equal to the Stock Consideration, payable to Selling Equityholders (including any shares by which the Stock Consideration shall be reduced to cause the percentage of outstanding capital stock of the Company represented by the Stock Consideration and the Founder Share Consideration to equal 35% of all the outstanding capital stock, or the “Excess Shares”,) divided by the total shares of common stock of the post-combination company (including any shares issued in the PIPE Investment and any Excess Shares) and will be subject to forfeiture, transfer restrictions and restrictions on dividend distributions in the event that certain stock price milestones are not met.

The Company filed a definitive proxy statement with the SEC in connection with the Proposed Nexeo Business Combination on May 9, 2016 (the “Proxy Statement”). The Proxy Statement contains important information regarding the Proposed Nexeo Business Combination.

~~F-7~~

~~Emerging Growth Company~~

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

~~Significant Accounting Policies~~

~~Basis of Presentation~~

~~The~~ accompanying unaudited condensed consolidated financial statements have been prepared in accordance with ~~accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations~~U.S. GAAP for interim financial information. As such, they do not include all of the ~~Securities~~information and ~~Exchange Commission (“SEC”), and reflect~~footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments ~~consisting only~~(consisting of normal recurring adjustments, ~~which are, in the opinion of management,~~except as disclosed herein) considered necessary for a fair ~~presentation~~statement have been included. Results of operations for the ~~financial position as of~~three and six months ended March 31, ~~2016 and December 31, 2015 and the~~2017 are not necessarily indicative of results ~~of operations and cash flows~~to be expected for the ~~periods presented. Certain information and disclosures normally included in~~fiscal year ending September 30, 2017. Quarterly financial ~~statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. The accompanying unaudited interim financial statements~~data should be read in conjunction with the ~~audited~~consolidated financial statements and accompanying notes ~~thereto~~for the fiscal year ended September 30, 2016 included in the Company's Annual Report on Form 10-K filed with the SEC on December 8, 2016.

The consolidated financial data as of September 30, 2016 presented in these unaudited condensed consolidated financial statements were derived from the Company’s audited consolidated financial statements, but do not include all disclosures required by U.S. GAAP.

Nature of Operations

The Company is a global distributor of chemicals products in North America and Asia and plastics products in North America, EMEA and Asia. In connection with the distribution of chemicals products, the Company provides value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. The Company also provides environmental services, including waste collection, recovery and arrangement for disposal services and recycling in North America, primarily in the U.S., through its Environmental Services line of business.

The Company connects a large network of suppliers with a diverse base of customers. The Company offers its customers products used in a broad cross-section of end markets including household, industrial and institutional, lubricants, performance coatings (including architectural coatings, adhesives, sealants and elastomers), automotive, healthcare, personal care, oil and gas and construction. The Company distributes products internationally through a supply chain consisting of owned, leased or third-party warehouses, rail terminals and tank terminals globally. The Company has a private fleet of tractors and trailers, primarily located in North America.

Table of Contents

2. Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The application of the amendments will require the use of a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company adopted this standard during the three months ended December 31, 2016 and the adoption did not have a material impact on the Company’s financial position or results of operations for the periods presented.

In January ~~14,~~2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which revises the definition of a business. The amendments in this ASU specify for an acquisition to be considered a business, it must include an input and a substantive process that together significantly contribute to the ability to create outputs. The amendments also further define outputs, and specify that an acquisition where the fair value of gross assets acquired is concentrated in a single asset or group of similar assets would not constitute a business. The Company adopted this standard during the three months ended December 31, 2016 on a prospective basis and applied the amendments to the asset acquisition that occurred during the three months ended December 31, 2016.

~~Loss Per Common Share~~

~~Net~~ See Note 3.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU removed step two of the goodwill impairment test and specify that an entity will recognize an impairment loss ~~per common share~~for the amount by which a reporting unit’s carrying amount exceeds its fair value. The Company adopted this guidance during the three months ended March 31, 2017 as part of its annual impairment test and the adoption did not have a material impact on the Company’s financial position or results of operations for the periods presented.

New Accounting Pronouncements Not Yet Adopted

The Company continues the evaluation of the potential effects on its financial position or results of operations of the accounting pronouncements disclosed in its consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on December 8, 2016, including ASU 2014-09, Revenue from Contracts with Customers, and ASU 2016-02, Leases.

3. Acquisitions

Asset Acquisition

In December 2016, the Company entered into an asset purchase agreement whereby it acquired certain customer contracts and a customer list. Additionally, in connection with this transaction, the Company entered into a supply agreement and a licensing agreement granting the Company the non-exclusive use of a certain trademark. The total consideration associated with this transaction was $8.5 million, of which $5.1 million was paid at closing. The remaining consideration will be paid in equal amounts on or before January 1, 2018 and January 1, 2019. The remaining consideration is ~~computed~~included in Accrued expenses and other liabilities and Other non-current liabilities on the Company’s condensed consolidated balance sheets. In connection with this transaction, the Company recognized intangible assets totaling $8.5 million which are included in Other intangible assets, net of amortization on the Company’s condensed consolidated balance sheets. The acquired intangible assets will be fully amortized over estimated useful lives ranging between 10 and 13 years.

Business Combination

On June 9, 2016, the Company consummated the Business Combination pursuant to the Merger Agreement, whereby WLRH acquired Holdings (including the portion of Holdings held by ~~dividing net loss applicable to common stockholders~~Blocker) through a series of two mergers. As a result of the transactions contemplated by the Merger Agreement, Holdings and Blocker became wholly-owned subsidiaries of WLRH.

Table of Contents

The purchase consideration for the Business Combination was as follows:



Cash	$	424.9
Less: cash acquired	(64.3		)
Equity	276.7
Founder Shares transferred to Selling Equityholders	30.2
Contingent consideration - Fair value of Deferred Cash Consideration	45.4
Contingent consideration - Fair value of TRA⁽¹⁾	86.2
Total purchase consideration⁽²⁾	$	799.1

⁽¹⁾During the three months ended March 31, 2017, the Company recorded a $2.0 million adjustment. See below.

⁽²⁾ In addition to the total purchase consideration above, the Company assumed the outstanding indebtedness of the Predecessor, including related accrued interest through the Closing Date, totaling $774.3 million. The proceeds of the Credit Facilities were used to repay such indebtedness and accrued interest immediately following the consummation of the Business Combination.

Contingent Consideration - Deferred Cash Consideration

The contingent consideration associated with the Deferred Cash Consideration willbe an amount in cash equal to the prevailing price of the Company’s common stock at the time that the Company pays such deferred cash payment multiplied by the number of Excess Shares (5,178,642 Excess Shares as of March 31, 2017). Based on the terms of the Excess Shares, certain circumstances require the Company to pay all or a portion of the Deferred Cash Consideration to the Selling Equityholders, where such cash amount is calculated as set forth in the Merger Agreement, including (i) where the volume weighted average trading price of the Company’s common stock for any period of 20 trading days in any 30 trading day period exceeds $15.00 per share, and (ii) if any Excess Shares remain on June 30, 2021. If any Excess Shares remain on June 30, 2021, the Company must elect to either (i) within five business days of such date, pay the Selling Equityholders an amount in cash equal to the product of the number of remaining Excess Shares multiplied by the volume weighted-average trading price for the 20 trading day period immediately preceding such date or (ii) use reasonable best efforts to sell such shares to a third party in a primary offering and pay the gross proceeds thereof (less any underwriting discounts and commissions) to the Selling Equityholders. However, to the extent the number of shares issued in such offerings does not equal the full amount of ~~common stock outstanding~~Excess Shares remaining at the time of the offering, the Company’s obligations with respect to any remaining Excess Shares, including the obligation to continue to complete any necessary additional offerings, shall continue.

In order to estimate the fair value of the Deferred Cash Consideration, the Company estimates the value of the Excess Shares using a Monte Carlo simulation model. The estimated fair value of the Deferred Cash Consideration liability as of the Closing Date was $45.4 million. See Note 9.

Contingent Consideration - TRA

Concurrent with the completion of the Business Combination, the Company incurred the liability for the contingent consideration related to the TRA, which reflects amounts owed to the Selling Equityholders. This liability generally provides for the payment by the Company to the Selling Equityholders of 85% of the net cash savings, if any, in U.S. federal, state and local income taxes that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the Closing Date as a result of (i) certain increases in tax basis resulting from the Company Merger, (ii) certain tax attributes of Holdings existing prior to the Mergers, (iii) net operating losses and certain other tax attributes of Blocker available to the Company as a result of the Blocker Merger and (iv) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, payments the Company makes under the TRA. The Company will retain the benefit of the remaining 15% of the net cash savings, if any. The Company estimated the fair value of the TRA liability based on a discounted cash flow model which incorporates assumptions of projected taxable income, projected income tax liabilities and an estimate of tax benefits expected to be realized as a result of the Business Combination. During the three months ended March 31, 2017, the Company recorded a $2.0 million adjustment to the estimated fair value of the TRA liability as of the Closing Date, related to the assessments of the tax attributes associated with certain entities. Including this adjustment, the estimated fair value of the TRA liability as of the Closing Date was $86.2 million. Including this adjustment, the undiscounted cash flows associated with the TRA liability as of the Closing Date were estimated to be between $180.0 million and $220.0 million over the time period during which the tax benefits are expected to be realized, currently estimated at over 20 years.

Table of Contents

The amount and timing of any payments due under the TRA will vary depending upon a number of factors, including the amount and timing of the taxable income the Company generates in the future and the U.S. federal, state and local income tax rates then applicable. In addition, payments made under the TRA will give rise to additional tax benefits for the Company and therefore additional potential payments due under the TRA. The term of the TRA commenced upon the consummation of the Mergers and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless the Company exercises its right to terminate the TRA early. If the Company elects to terminate the TRA early, its obligations under the TRA would accelerate and it generally would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by it under the TRA, calculated in accordance with certain valuation assumptions set forth in the TRA.

The liabilities related to the Deferred Cash Consideration and the TRA are included in Due to related party pursuant to contingent consideration obligations on the Company’s condensed consolidated balance sheets.

Preliminary Purchase Consideration Allocation

The Business Combination is accounted for under the acquisition method, with WLRH determined to be the accounting acquirer of Holdings, which requires the Company to perform an allocation of the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase consideration over the estimated fair values is recorded as goodwill. The following table summarizes the Company’s preliminary allocation of the purchase consideration to assets acquired and liabilities assumed at the Closing Date:



	Preliminary Purchase Consideration Allocation
Accounts receivable	$	470.0
Inventory	328.5
Other current assets	25.8
Property, plant and equipment	328.3
Customer-related intangible	201.0
Trade name	21.0
Below-market leases	0.7
Other non-current assets	3.2
Deferred tax assets	1.2
Goodwill	667.6
Total assets acquired	2,047.3

Short-term borrowings and current portion of capital leases	40.6
Accounts payable	335.9
Other current liabilities	52.8
Long-term portion of capital leases	23.0
Long-term debt	767.3
Deferred tax liability	23.1
Other non-current liabilities	5.5
Total liabilities assumed	1,248.2

Net assets acquired	$	799.1

During the six months ended March 31, 2017, the Company recorded an adjustment to the fair value of accounts payable and deferred tax liabilities of $2.1 million and $1.3 million, respectively. Goodwill was impacted by these two adjustments and also by the $2.0 million adjustment to the fair value of the TRA described above which increased the purchase consideration. The total purchase consideration allocation above is preliminary as the Company has not yet completed the necessary fair value assessments, including the assessments of property, plant and equipment, intangibles and the related tax impacts on these items. Any changes within the measurement period may change the amount of the purchase consideration allocable to goodwill. The fair value and tax impact assessments are to be completed within twelve months of the Closing Date, and could have a material impact on the components of the total purchase consideration allocation.

Table of Contents

Transaction costs incurred by the Company associated with the Business Combination were $0.2 million and $1.0 million during the ~~period, plus to~~three and six months ended March 31, 2017, respectively, and $6.3 million and $7.3 million during the ~~extent dilutive the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method. At~~three and six months ended March 31, 2016, respectively.

A summary and description of the ~~Company had outstanding warrants~~acquired assets and assumed liabilities fair valued in conjunction with applying the acquisition method of accounting follows:

Accounts Receivable

Accounts receivable consisted of receivables related to ~~purchase 36,212,500 shares~~the customers of ~~common stock~~the acquired business, as well as various other miscellaneous receivables. The accounts receivable and ~~notes that could convert into warrants and potentially~~other miscellaneous receivables were recorded at their approximate fair value based on expected collections of the Predecessor. Accordingly, accounts receivable included an adjustment of $4.1 million to reduce gross receivables to their net value after consideration of expected uncollectable amounts at the Closing Date.

Inventory

Inventory consisted primarily of finished products to be ~~exercised or converted into common shares. For all periods presented,~~distributed to the weighted average of these shares was excluded from the calculation of diluted loss per share of common stock because their inclusion would have been anti-dilutive. As a result, dilutive loss per share of common stock is equal to basic loss per share of common stock.

~~Concentration of Credit Risk~~

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

~~Financial Instruments~~

acquired business’s customers. The fair value of inventory was established through application of the ~~Company’s assets~~income approach, using estimates of selling prices and ~~liabilities,~~costs such as selling and marketing expenses to be incurred in order to dispose of the finished products and arriving at the future profitability that is expected to be generated once the inventory is sold (net realizable value). The inventory fair value step up of $13.8 million was recognized in income during the fiscal year ended September 30, 2016, which ~~qualify as financial instruments under ASC 820, “Fair Value Measurements~~is included in Cost of sales and ~~Disclosures,” approximates the carrying amounts represented~~operating expenses in the ~~balance sheets.~~

~~Offering Costs~~

consolidated statements of operations.

Other Current Assets

Other current assets consisted primarily of prepaid expenses, which did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value.

Property, Plant and Equipment

Property, plant and equipment consisted primarily of: 42 owned distribution locations in the U.S., Puerto Rico and Canada; 11 leased locations in the U.S., Canada, Puerto Rico, Mexico, Europe and China (excluding third-party operated warehouses); office equipment and other similar assets used in the Predecessor's operations. The allocation of the purchase consideration for property, plant and equipment was based on the fair market value of such assets determined using the cost approach. The cost approach consisted of estimating the fixed assets’ replacement cost less all forms of depreciation. The fair value of land was determined using the comparable sales approach. The fair value adjustment to property, plant and equipment was $96.1 million. The Company's assessment of replacement cost of certain property and equipment is preliminary, and will be completed within twelve months of the Closing Date.

Customer-Related Intangible

Customer relationships were valued through the application of the income approach. Under this approach, revenue, operating expenses and other costs associated with existing customers were estimated in order to derive cash flows attributable to the existing customer relationships. The resulting estimated cash flows were then discounted to present value to arrive at the fair value of existing customer relationships as of the valuation date. The value associated with customer relationships will be amortized on a straight-line basis over a 12-year period, which represents the approximate point in the projection period in which a majority of the asset’s cash flows are expected to be realized based on assumed attrition rates. The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A – “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering and were charged to stockholders’ equity upon the completion of the Public Offering. Accordingly, at March 31, 2016 and December 31, 2015, offering costs totaling approximately $28,473,750 (including $27,513,750 in underwriters’ fees) have been charged to stockholders’ equity.

~~F-8~~

~~Redeemable Common Stock~~

~~As discussed in Note 3, all of the 50,025,000 common shares sold~~recognized $201.0 million for these intangible assets as part of the ~~units~~preliminary allocation of the purchase consideration. The Company's assessment of the expected future cash flows related to the customer intangibles is preliminary, and will be completed within twelve months of the Closing Date.

Table of Contents

Trade Name

The "Nexeo" trade name was valued through application of the income approach, involving the estimation of likely future sales and an estimated royalty rate reflective of the rate that a market participant would pay to use the Nexeo name. The fair value of this asset will be amortized on a straight-line basis over a period of four years, estimated based on the period in which the Company expects a market participant would use the name prior to rebranding and the length of time the name would be expected to maintain recognition and value in the ~~Public Offering contain a redemption feature which allows~~marketplace. The Company recognized $21.0 million for ~~the redemption of common shares under the Company’s Liquidation or Tender Offer/Stockholder Approval provisions. In accordance with ASC 480, redemption provisions not solely within the control~~this intangible asset as part of the ~~Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all~~preliminary allocation of the ~~entity’s equity instruments, are excluded from~~purchase consideration. The Company's assessment of these future cash flows is preliminary and will be completed within twelve months of the ~~provisions~~Closing Date.

Below-Market Leases

The Company recognized an intangible asset related to favorable lease terms of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity)certain properties under operating leases where rental payments were determined to be less than ~~$5,000,001.~~

current market rates. The intangible asset will be amortized over the remaining life of the operating leases, which ranges from one to seven years. The Company ~~recognizes changes~~recognized $0.7 million for this intangible asset as part of the preliminary allocation of the purchase consideration.

Other non-current assets

Other non-current assets acquired represented certain long-term deposits, which did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value.

Goodwill

Goodwill represents the excess of the total purchase consideration over the fair value of the underlying net assets acquired, largely arising from the workforce and extensive efficient distribution network that has been established by the acquired business. Of the total amount of goodwill recognized as part of the preliminary allocation of the purchase consideration above, the Company expects approximately $191.5 million to be deductible for tax purposes as of March 31, 2017. As the fair value assessments of the acquired assets and liabilities are finalized within twelve months of the Closing Date, the amount of goodwill recognized as of the Closing Date is subject to change.

Short-term borrowings and current portion of capital leases

Short-term borrowings and current portion of capital leases included short term borrowings of Nexeo Plaschem and the current portion of capital leases, which did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value.

Accounts Payable

Accounts payable represented short-term obligations owed to the vendors of the acquired business, which were assumed in ~~redemption~~the Business Combination. These obligations did not have a fair value ~~immediately~~adjustment as ~~they occur~~part of acquisition accounting since their carrying value approximated fair value.

Other Current Liabilities

Other current liabilities represented primarily accrued expenses, including accrued payroll, accrued interest on long-term debt, certain accrued taxes and ~~adjusts~~various other liabilities arising out of the normal operations of the acquired business. The majority of these liabilities did not have a fair value adjustment because their carrying value approximated fair value. However, no fair value was recognized for certain recorded liabilities that did not meet the definition of a liability under the acquisition method of accounting.

Long-term Portion of Capital Leases

The long-term portion of capital leases included the non-current portion of capital leases for machinery and equipment, which did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value.

Table of Contents

Long-term Debt

Long-term debt represented the outstanding principal balance at the Closing Date of the Predecessor Term Loan Facility and the Notes which did not have a fair value adjustment as part of acquisition accounting since the carrying value of the security to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against accumulated deficit.

~~Accordingly, at March 31, 2016 and December 31, 2015, 47,512,924 and 47,663,155, respectively, of the 50,025,000 public shares were classified outside of permanent equity at its redemption~~approximated fair value.

~~Use of Estimates~~

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

~~Income~~

Deferred Taxes

~~The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.”~~

Deferred tax assets and liabilities are ~~recognized for~~attributable to the difference between the estimated ~~future~~fair values allocated to inventory, property, plant and equipment and identified intangibles acquired for financial reporting purposes and the amounts determined for tax ~~consequences attributable~~reporting purposes and give rise to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary ~~differences are expected to be recovered or settled.~~differences. The ~~effect on~~ deferred tax assets and liabilities will reverse in future periods or have reversed as the related tangible and intangible assets are amortized, acquired inventory is sold, or if goodwill is impaired. The estimates of ~~a change in~~the deferred taxes are preliminary as they are dependent on the final fair values allocated to property, plant and equipment and identified intangibles. Additionally, the Company’s entity structure includes several partnerships. The estimates of deferred taxes are preliminary as the evaluation of the tax ~~rates is recognized in income~~basis of each individual partner's interest in the ~~period that included~~partnerships has not been fully completed.

Unaudited Consolidated Pro Forma Financial Information

The consolidated pro forma results presented below include the ~~enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.~~

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those liabilities or benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax liabilities as income tax expense. No amounts were accrued for the payment of interest and penalties at March 31, 2016 and December 31, 2015. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The Company may be subject to potential examination by U.S. federal, states or foreign jurisdiction authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income amount various tax jurisdictions and compliance with U.S. federal, states or foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

~~The Company is incorporated in the State of Delaware and is required to pay franchise taxes to the State of Delaware on an annual basis.~~

~~F-9~~

~~Going Concern Consideration~~

If the Company does not complete an initial Business Combination by June 11, 2016, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the common stock sold as part of the units in the Public Offering, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of franchise and income taxes payable and less up to $50,000 of such net interest which may be distributed to the Company to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. This mandatory liquidation and subsequent dissolution requirement raises substantial doubt about the Company’s ability to continue as a going concern.

In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Public Offering. In addition if the Company fails to complete its Business Combination by June 11, 2016, there will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless.

In addition, at March 31, 2016, the Company had current liabilities of $2,644,159 and negative working capital of $2,585,302 largely due to amounts owed to professionals, consultants, advisors and others who are working on seeking or completing a Business Combination described in Note 1. Such work is continuing after March 31, 2016 and amounts are continuing to accrue. The Company expects to pay many of these costs upon consummation of the Business Combination. The uncertainty regarding the lack of resources to pay the above noted liabilities raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be unable to continue operations.

~~Public Offering~~

~~Public Units~~

On June 11, 2014, the Company sold 50,025,000 at a price of $10.00 per unit (the “Public Units”) in the Public Offering. Each Unit consists of one share of the Company’s common stock, $0.0001 par value per share and one redeemable common stock purchase warrant (the “Warrants”).

Under the terms of the warrant agreement, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act following the completion of the Business Combination. Each Warrant entitles the holder to purchase one-half of one share of common stock at a price of $5.75. No fractional shares 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, the Company will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Each Warrant will become exercisable on the later of 30 days after the completion of the Company’s Business Combination or 12 months from the closing of the Public Offering and will expire five years after the completion of the Company’s Business Combination or earlier upon redemption or liquidation. However, if the Company does not complete its Business Combination on or prior to the 24-month period allotted to complete the Business Combination, the Warrants will expire at the end of such period. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of Warrants issued in connection with the 50,025,000 Public Units during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the warrant agreement. Once the warrants become exercisable, the Company may redeem the outstanding warrants 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, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $24.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the warrant holders.

~~F-10~~

The Company paid an upfront underwriting discount of approximately 1.84% ($9,204,600) of the per unit offering price to the underwriters at the closing of the Public Offering, with an additional fee (the “Deferred Discount”) of 3.66% ($18,309,150) of the gross offering proceeds payable upon the Company’s completion of a Business Combination. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its Business Combination. The underwriters are not entitled to any interest accrued on the Deferred Discount.

~~Related Party Transactions~~

~~Founder Shares~~

In March 2014, the Sponsor purchased 14,375,000 shares of common stock (the “Founder Shares”) for $25,000, or approximately $0.002 per share. The Founder Shares are identical to the common stock included in the Units sold in the Public Offering except that the Founder Shares are subject to certain transfer restrictions, as described in more detail below. Immediately prior to the Public Offering, the Sponsor forfeited 1,868,750 Founder Shares so that the remaining founder shares represent 20.0% of the outstanding shares upon the completion of the Public Offering.

~~The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier of (A) one year after the completion~~effects of the Business Combination ~~or earlier~~as if ~~subsequent~~they had occurred as of October 1, 2014, the beginning of the fiscal year prior to the year the Business Combination was consummated. The consolidated pro forma results reflect certain adjustments related to this acquisition, primarily the ~~last sale price~~estimated changes in fair value of the ~~Company’s common stock equals~~contingent consideration liability, amortization expense associated with estimates for the acquired intangible assets, depreciation expense based on the new fair value of property, plant and equipment, transaction costs, interest expense and income taxes.

The consolidated pro forma financial information below is not necessarily indicative of either future results of operations or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days afterresults that might have been achieved had the Business Combination ~~or (B)~~been completed on October 1, 2014.



	Three Months Ended March 31, 2017			Six Months Ended March 31, 2017			Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
Sales and operating revenues	$	917.7		$	1,712.5		$	862.2	$	1,689.9
Operating income	12.1			11.3			11.8		18.3
Net income (loss) from continuing operations	(1.1		)	(8.9		)	0.6		(1.8		)
Net income (loss)	(1.0		)	(8.8		)	0.6		(1.8		)
Basic and diluted net income (loss) per share	(0.01		)	(0.12		)	0.01		(0.02		)

Proforma weighted average number of common shares outstanding
Basic	76,746,168			76,746,168			76,746,168		76,746,168
Diluted	76,746,168			76,746,168			76,810,686		76,746,168

For all periods presented above, the ~~date on~~basic net income (loss) per share amounts were computed using weighted average shares outstanding of 76,746,168, which ~~the Company completes~~assumes all shares issued as a liquidation, merger, stock exchange or other similar transaction after the Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property (the “Lock Up Period”).

~~Rights~~- The Founder Shares are identical to the public shares except that (i) The Founder Shares are subject to certain transfer restrictions, as described above, and (ii) the Sponsor has agreed to waive redemption rights in connection with the Business Combination with respect to the Founders Shares and any public shares they may purchase, and to waive their redemption rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Public Offering (June 11, 2016).

~~Voting~~ – If the Company seeks stockholder approval of a Business Combination, the Sponsor has agreed to vote its Founder Shares and any public shares purchased during or after the Public Offering in favor of the Business Combination.

~~Redemption~~ – Although the Sponsor and its permitted transferees will waive their redemption rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the prescribed time frame, they will be entitled to redemption rights with respect to any public shares they may own.

Prior to the Public Offering, the Company had granted the Sponsor the option to purchase, simultaneously with the consummation of an initial Business Combination, up to an additional 10,000,000 shares of common stock at a price of $10.00 per share.

On March 21, 2016, the Company, the Sponsor and New Holdco entered into the Founder Share Transfer Letter Agreement which provides that, under the Merger Agreement, holders of equity interests in Nexeo and Blocker as of the time immediately prior to the Proposed Nexeo Business Combination (the "Selling Equityholders") will receive at the closing of the Proposed Nexeo Business Combination as consideration from the Sponsor, a portion of its shares of the Company’s common stock (the “Founder Shares”) issued at the time of the Public Offering to the Sponsor, pursuant to the Amended and Restated Securities Subscription Agreement, dated April 4, 2014 (the “Founder Shares Transfer”). The Sponsor is providing this consideration in lieu of transferring such Founder Shares back to the Company for cancellation, in exchange for no consideration, and reissuance of such Founder Shares to Selling Equityholders by the Company. This brief summary of the Founder Shares Transfer is qualified in all respects by reference to the complete text of the Founder Share Transfer Letter Agreement, dated as of March 21, 2016, by and among the Company, the Sponsor and New Holdco, which was filed with the SEC on March 22, 2016 as Exhibit 10.4 to the Company's Current Report on Form 8-K.

~~Private Placement Warrants~~

The Sponsor has purchased from the Company an aggregate of 22,400,000 warrants at a price of $0.50 per warrant (a purchase price of $11,200,000) in a private placement that occurred simultaneously with the completion of the Public Offering (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase one-half of one share of common stock at $5.75 per share. The purchase price of the Private Placement Warrants was added to the proceeds from the Public Offering to be held in the Trust Account pending completion of the Business Combination.

~~F-11~~

~~The Private Placement Warrants (including the common stock issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion~~result of the Business Combination and they will be non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holderswould have been issued on ~~the same basis as the Public Warrants~~October 1, 2014. There were 12,476,250 Founder Shares not included in the ~~units being sold~~basic or diluted computations because market conditions are assumed to be not satisfied. Additionally, 1,587,000 outstanding PSU awards were not included in the ~~Public Offering. Otherwise,~~computation of diluted shares outstanding because performance targets and/or market conditions are assumed not to have been met for these awards. Diluted shares outstanding also did not include 25,012,500 shares based on the ~~Private Placement Warrants have terms and provisions that are identical to those~~exercise of 50,025,000 warrants because the warrants were out-of-the-money. As of the ~~Public Warrants sold as part of the units in the Public Offering~~three months and ~~have no net cash settlement provisions.~~

On March 21, 2016, the Company, the Sponsor and Nexeo entered into the Private Placement Warranty Exchange Letter Agreement which provides that the Private Placement Warrants will be exchanged by the Sponsor for the Company’s common stock at an exchange ratio of 0.10 shares of common stock for each Private Placement Warrant at the closing of the Proposed Nexeo Business Combination (the “Private Placement Warrant Exchange”). This brief summary of the Private Placement Warrant Exchange is qualified in all respects by reference to the complete text of the Private Placement Warranty Exchange Letter Agreement, dated as of March 21, 2016, by and among the Company, the Sponsor and Nexeo, which was filed with the SEC on March 22, 2016 as Exhibit 10.3 to the Company's Current Report on Form 8-K.

If the Company does not complete a Business Combination, then the Private Placement Warrants proceeds will be part of the liquidation distribution to the public stockholders and the Private Placement Warrants will expire worthless.

~~Registration Rights~~

The holders of the Founder Shares and Private Placement Warrants hold registration rights to require the Company to register the sale of any of the securities held by them pursuant to a registration rights agreement. The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by the Company. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock Up Period. The Company will bear the costs and expenses of filing any such registration statements.

~~Related Party~~

The Sponsor loaned the Company $350,000 in the aggregate by the issuance of unsecured promissory notes (the “Notes”) for $350,000 to cover expenses related to the Public Offering. These Notes were non-interest bearing and payable on the earlier of March 31, 2015 or the completion of the Public Offering. The Notes were repaid in full on June 12, 2014.

On March 26, 2015, the Company issued a convertible promissory note (the “Convertible Note”) to the Sponsor that provides for the Sponsor to loan us up to $300,000 for ongoing expenses. The Convertible Note is interest bearing at 5% per annum and is due and payable on June 11, 2016. At the option of the Sponsor, any amounts outstanding under the Convertible Note may be converted into warrants to purchase shares of our common stock at a conversion price of $0.60 per warrant. Each warrant will entitle the Sponsor to purchase one-half of one share of our common stock at an exercise price of $5.75 per half share ($11.50 per whole share). Each warrant will contain other terms identical to the terms contained in the Private Placement Warrants previously issued to the Sponsor. On April 16, 2015, the Company borrowed the total proceeds of $300,000 from the Convertible Note entered with the Sponsor. For the threesix months ended March 31, ~~2016,~~2017, the ~~Company incurred $3,830~~53,765 shares of ~~interest expense which under~~unvested restricted stock awards issued to directors were not included in the ~~terms~~diluted share calculation as their impact on the Company’s net loss would have been anti-dilutive. However, the impact of these restricted shares was included in the Convertible Note has been added to the principal amount. On January 4, 2016, the Company issued a second convertible promissory note, (the “Second Convertible Note”) to borrow additional proceeds of $425,000 from the Sponsor. The Company incurred $5,240 of interest expensediluted share calculation for the three months ended March 31, 2016. The 28,000 RSUs granted during the six months ended March 31, 2017 were not included in the computation of pro forma diluted shares outstanding for the three and six months ended March 31, 2016 ~~which~~as they were awarded subsequent to the Business Combination.

Table of Contents

4. Certain Balance Sheet Information

Cash and Cash Equivalents

Cash and cash equivalents were $95.3 million as of March 31, 2017 and $47.5 million as of September 30, 2016. These amounts included the following:



	March 31, 2017		September 30, 2016
Cash held by foreign subsidiaries	$	30.4	$	41.9
Non-USD denominated currency held by foreign subsidiaries	$	25.6	$	36.9
Currency denominated in RMB	$	4.9	$	6.5

Non-USD denominated currency held by foreign subsidiaries was primarily in euros and RMB. While the RMB is convertible into USD, foreign exchange transactions are subject to approvals from SAFE. The Company does not anticipate any significant adverse impact to overall liquidity from potential limitations on the transfer or conversion of cash and cash equivalents.

Inventories

Inventories at March 31, 2017 and September 30, 2016 consisted of the following:



	March 31, 2017		September 30, 2016
Finished products	$	331.8	$	311.7
Supplies	4.6		4.1
Total	$	336.4	$	315.8

The Company’s inventories in the U.S. and Canada are collateral under the ~~terms~~Credit Facilities.

Other Non-Current Assets

Other non-current assets at March 31, 2017 and September 30, 2016 consisted of the ~~Convertible Note has been added~~following:



	March 31, 2017		September 30, 2016
Debt issuance costs of the ABL Facility	$	5.8	$	6.4
Other	5.1		4.3
Total	$	10.9	$	10.7

Amortization of debt issuance costs related to the ~~principal amount.~~ABL Facility recorded in Interest expense in the condensed consolidated statements of operations was $0.3 million and $0.6 million for the three and six months ended March 31, 2017, respectively. Amortization of debt issuance costs related to the Predecessor ABL Facility recorded in interest expense was $0.7 million and $1.5 million for the three and six months ended March 31, 2016, respectively.

Table of Contents

5. Property, Plant and Equipment

Property, plant and equipment at March 31, 2017 and September 30, 2016 consisted of the following:



	March 31, 2017			September 30, 2016
Land	$	50.3		$	50.4
Plants and buildings⁽¹⁾	105.7			89.8
Machinery and equipment ⁽²⁾	136.9			130.5
Software and computer equipment	55.2			49.0
Construction in progress	15.5			16.5
Total	363.6			336.2
Less accumulated depreciation ⁽³⁾	(36.3		)	(13.6		)
Property, plant and equipment, net	$	327.3		$	322.6

⁽¹⁾ Includes $13.7 million for the three months ended March 31, 2017 related to facilities acquired under capital leases.

⁽²⁾ Includes $25.1 million and $25.2 million, respectively, related to equipment acquired under capital leases.

⁽³⁾ Includes $2.4 million and $1.1 million, respectively, related to facilities and equipment acquired under capital leases.

Depreciation expense recognized on the property, plant and equipment described above was as follows:



	Successor				Predecessor
	Three Months Ended March 31, 2017		Six Months Ended March 31, 2017		Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
Depreciation expense	$	12.1	$	23.3	$	9.9	$	19.6

Included in the carrying value of property, plant and equipment in the Company’s condensed consolidated balance sheets are certain closed facilities located in the U.S., which collectively have a carrying value of $1.1 million as of March 31, 2017 and $1.2 million as of September 30, 2016. The facilities do not currently meet the criteria for held-for-sale classification; accordingly, they remain classified as held and used.

Facility Lease

The Company’s sale of its Franklin Park facility to the Illinois Tollway Authority under an eminent domain proceeding was completed in September 2016.

As a result of the sale of this facility, the Company relocated operations to a new leased facility in Montgomery, Illinois. The Montgomery Lease has a term of 15 years, with annual payments beginning at $1.1 million per year, excluding executory costs, and annual escalations of 2.5% per year. The Montgomery Lease includes three, five-year renewal options. The Montgomery Lease was accounted for as a capital lease and began in the first quarter of fiscal year 2017 at an initial cost of $13.2 million. In connection with the relocation of these operations, the Company incurred certain capital expenditures for which it has received and will continue to receive reimbursements from the Illinois Tollway Authority. During the three and six months ended March 31, 2017, the Company recorded a gain of $0.2 million and $2.7 million, respectively, related to such capital expenditures incurred and reimbursed to date, included in Other Income on the condensed consolidated statements of operations.

Table of Contents

6. Goodwill and Other Intangibles

Goodwill

The following is a progression of goodwill by reportable segment:



	Chemicals			Plastics			Other			Total
Balance at September 30, 2016	$	331.6		$	271.1		$	63.0		$	665.7
Measurement period adjustment	(0.6		)	(0.7		)	(0.1		)	(1.4		)
Foreign currency translation	(0.2		)	(3.1		)	—			(3.3		)
Balance at March 31, 2017	$	330.8		$	267.3		$	62.9		$	661.0

Goodwill amounts by reportable segment at March 31, 2017 are based on the preliminary allocation of the purchase consideration of the Business Combination as of the Closing Date. Accordingly, the amounts allocated to goodwill are subject to adjustments to reflect the completion of the purchase price allocation, which will be completed within twelve months of the Closing Date and could have a material impact on total goodwill and goodwill by reportable segment. See Note 3.

Goodwill Impairment Test

Goodwill is tested for impairment annually as of March 31 and whenever events or circumstances make it more likely than not that an impairment may have occurred. Goodwill is reviewed for impairment at the reporting unit level, or operating segment, for the Company. As of March 31, ~~2016,~~2017, the ~~outstanding balance~~Company tested the goodwill recorded at each of ~~both Convertible Notes is $744,714. As of December 31, 2015, the outstanding balance~~its operating segments and concluded that goodwill was not impaired. For purposes of the ~~Convertible~~annual impairment testing of the Company's recognized goodwill, fair value measurements were determined using the income approach, based largely on inputs that are not observable to active markets, which would be deemed Level 3 fair value measurements as defined in Note 9. These inputs include management’s expectations about future revenue growth and profitability, working capital needs and capital expenditures. Inputs also include estimates of a market participant’s expectations for 1) a discount rate at which the cash flows should be discounted in order to determine the fair value of such expected cash flows, and 2) an estimated income tax rate. The Company also considered a market approach using the comparable company method, which resulted in a fair value estimate of each reporting unit that was ~~$310,644.~~

Oncomparable to the income approach. The Company’s valuation based on the income approach is considered to be an appropriate valuation methodology for the annual goodwill impairment test.

The fair values of the Company’s reporting units were determined to exceed their respective carrying amount by more than 20%, with the exception of the Plastics line of business, for which the fair value of the reporting unit exceeded its carrying value by approximately 2%. Holding all other assumptions consistent, if the estimated discount rate fluctuated by approximately 50 basis points, the fair values of the individual reporting units would fluctuate between 6% and 10% in the opposite direction. Additionally, material increases or decreases in the expectations for revenue growth and profitability for a prolonged period of time could also impact the fair value of the reporting units in the same direction. Holding all other assumptions consistent, if gross profit margins of the individual reporting units fluctuated by 50 basis points each year over the entire valuation period, the fair values of the individual reporting units would fluctuate between 3% and 15% in the same direction.

The annual evaluation of goodwill requires the use of estimates about future operating results of each reporting unit to determine its estimated fair value. Changes in forecasted operations can materially affect these estimates, which could materially affect the Company’s results of operations. The estimate of fair value requires significant judgment and is based on management’s fair value estimates on assumptions that are believed to be reasonable; but that are unpredictable and inherently uncertain, including: estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment for the reporting units. There can be no assurance that these estimates and assumptions made for purposes of the goodwill testing as of the time of testing will prove to be accurate predictions of the future. If assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, the Company may be required to record goodwill impairment charges in future periods, whether in connection with future annual impairment testing, or earlier, if an indicator of an impairment is present prior to the next annual evaluation.

Table of Contents

Other Intangible Assets

During the six months ended March 31, 2017, the Company recognized a new intangible asset class. See Note 3. Definite-lived intangible assets at March 31, 2017 and September 30, 2016 consisted of the ~~Sponsor issued a promissory note (the “Notes”)~~following:



		March 31, 2017							September 30, 2016
	Estimated Useful Life (years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer-related	12	$	199.2	$	(13.5	)	$	185.7	$	200.3	$	(5.2	)	$	195.1
Trade name	4	21.0		(4.3		)	16.7		21.0		(1.7		)	19.3
Below-market leases	1-7	0.7		(0.2		)	0.5		0.7		(0.1		)	0.6
Asset purchase - acquired intangibles	10-13	8.5		(0.2		)	8.3		—		—			—
Total		$	229.4	$	(18.2	)	$	211.2	$	222.0	$	(7.0	)	$	215.0

Amortization expense recognized on the intangible assets described above was as follows:



	Successor				Predecessor
	Three Months Ended March 31, 2017		Six Months Ended March 31, 2017		Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
Amortization expense	$	5.7	$	11.3	$	3.9	$	7.8

7. Debt

Short-term borrowings outstanding and the current portion of long-term debt and capital lease obligations at March 31, 2017 and September 30, 2016 are summarized below:



	March 31, 2017		September 30, 2016
Short-term borrowings	$	38.0	$	38.4
Current portion of long-term debt and capital lease obligations	9.1		9.3
Total short-term borrowings and current portion of long-term debt and capital lease obligations, net	$	47.1	$	47.7

Long-term debt outstanding at March 31, 2017 and September 30, 2016 is summarized below:



	March 31, 2017			September 30, 2016
ABL Facility	$	214.4		$	117.7
Term Loan Facility	650.1			653.4
Capital lease obligations ⁽¹⁾	36.8			24.8
Total long-term debt	901.3			795.9
Less: unamortized debt discount ⁽²⁾	(2.9		)	(3.2		)
Less: debt issuance costs ⁽³⁾	(18.0		)	(17.8		)
Less: current portion of long-term debt and capital lease obligations	(9.1		)	(9.3		)
Long-term debt and capital lease obligations, less current portion, net	$	871.3		$	765.6


⁽¹⁾	Capital lease obligations exclude executory costs and interest payments associated with the underlying leases. See “Capital Lease Obligations” below.


⁽²⁾	The unamortized debt discount is related to the Term Loan Facility and amortized to interest expense over the life of the instrument using the effective interest rate method.


⁽³⁾	See discussion below under Term Loan Facility and Debt Issuance Cost Amortization.

Table of Contents

Short-Term Borrowings

The Company’s short-term borrowings are associated with the ~~Company to borrow~~Company’s operations in China and are summarized below:



	Facility Limit		Outstanding Borrowings Balance		Weighted Average Interest Rate on Borrowings		Outstanding LOC and Bankers’ Acceptance Bills		Remaining Availability
March 31, 2017
Bank of America - China ⁽¹⁾	$	24.3	$	23.6	4.2	%	$	—	$	0.7
Bank of Communications - China ⁽²⁾	21.8		14.4		5.2	%	7.2		0.2
Total	$	46.1	$	38.0			$	7.2	$	0.9
September 30, 2016
Bank of America - China ⁽¹⁾	$	28.4	$	27.3	4.0	%	$	—	$	1.1
Bank of Communications - China ⁽²⁾	22.5		11.1		5.2	%	10.5		0.9
Total	$	50.9	$	38.4			$	10.5	$	2.0


⁽¹⁾	The borrowing limit of this facility is denominated in USD. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 110% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance.


⁽²⁾	The borrowing limit of this facility is denominated in RMB. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 100% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance.

Long-Term Debt

ABL Facility

The ABL Facility provides for committed revolving credit financing including a U.S. Tranche of up to ~~$750,000,~~$505.0 million, a Canadian Tranche of up to the ~~promissory note~~USD equivalent of $40.0 million and a FILO Tranche up to $30.0 million. Provided no default or event of default then exists or would arise therefrom, the ABL Borrowers have the option to request that the ABL Facility be increased by an aggregate amount, when included with any incremental borrowings issued under the Term Loan Facility, not to exceed $175.0 million.

Borrowings under the U.S. Tranche and the Canadian Tranche of the ABL Facility bear interest, at the ABL Borrowers’ option, at either an alternate base rate or Canadian prime rate, as applicable, plus an applicable margin (ranging from 0.25% to 0.75% pursuant to a grid based on average excess availability) or LIBOR or Canadian BA rate (as defined therein), as applicable, plus an applicable margin (ranging from 1.25% to 1.75% pursuant to a grid based on average excess availability). Loans under the FILO Tranche, within the ABL Facility, bear interest at an alternate base rate plus an applicable margin (ranging from 1.00% to 1.50% pursuant to a grid based on average excess availability) or LIBOR plus an applicable margin (ranging from 2.00% to 2.50% pursuant to a grid based on average excess availability). In addition to paying interest on outstanding principal amounts under the ABL Facility, the ABL Borrowers are required to pay a commitment fee in respect of the unutilized commitments, which commitment fee is ~~interest bearing at 5%~~0.250% or 0.375% per annum and is ~~due and payable~~determined based on ~~the first to occur of (1) the consummation~~average utilization of the Proposed Nexeo Business Combination or (2) June 11, 2016 (or such later or such later date as may be approved by our stockholders by amendment of our charter to complete an initial Business Combination)ABL Facility (increasing when utilization is low and decreasing when utilization is high). The ~~Sponsor loaned~~ABL Borrowers are required to pay customary letters of credit fees.

The weighted average interest rate on borrowings under the ~~Company $235,000~~ABL Facility was 2.56% at March 31, 2017. Solutions had the USD equivalent of $70.8 million in outstanding letters of credit under the ABL Facility at March 31, 2017. The collective credit availability under the U.S. and Canadian Tranches of the ABL Facility was the U.S. equivalent of $196.2 million at March 31, 2017. There was $5.0 million availability under the FILO Tranche at March 31, 2017. The ABL Facility matures on June 9, 2021.

Obligations under the ABL Facility are secured by a first priority lien on all ABL first lien collateral, including eligible inventory and accounts receivable of the ABL Borrowers, and a second priority lien on all Term Loan first lien collateral including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, in each case, subject to certain limitations; provided, that no ABL Facility first lien collateral or Term Loan Facility first lien collateral owned by the Canadian Borrower secure the obligations owing under the U.S. tranche of the ABL Facility. These accounts receivable and inventory totaled $663.0 million in the aggregate byas of March 31, 2017.

Table of Contents

Fees paid to the lenders during the fiscal year ended September 30, 2016 in connection with the ABL Facility totaled $6.8 million and were recorded as debt issuance costs in Other non-current assets on the condensed consolidated balance sheets to be amortized as interest expense over the remaining term of the ~~notes to cover expenses related to daily operations.~~ ABL Facility. See Note 4.

As of March 31, 2017, the ABL Borrowers were in compliance with the covenants of the ABL Facility.

Term Loan Facility

The Term Loan Facility provides secured debt financing in an aggregate principal amount of up to $655.0 million and the right, at Solutions’ option, to request additional tranches of term loans in an aggregate principal amount, when included with any incremental borrowings issued under the ABL Facility, of up to $175.0 million, plus unlimited additional amounts such that the aggregate principal amount of indebtedness outstanding at the time of incurrence does not cause the Secured Net Leverage Ratio, calculated on a pro forma basis, to exceed 4.1 to 1.0. Availability of such additional tranches of term loans is subject to the absence of any default and, among other things, the receipt of commitments by existing or additional financial institutions.

On March 22, 2017, the Company completed TLB Amendment No. 1 amending the current Term Loan Facility. TLB Amendment No. 1 reduced the interest rate margin applicable to outstanding term loans by 50 basis points from 4.25% to 3.75% for LIBOR loans and from 3.25% to 2.75% for base rate loans. In addition, the 1% LIBOR floor was eliminated. TLB Amendment No.1 provides a prepayment premium equal to 1% of the amount of the term loan applicable to certain repricing transactions occurring on or prior to six months from the effective date of TLB Amendment No. 1.

Commencing with the quarter ended September 30, 2016, Solutions is required to make scheduled quarterly payments in an aggregate annual amount equal to 1.0% of the aggregate principal amount of the initial term loans made on the Closing Date of the Mergers, with the balance due at maturity. The average interest rate for the Term Loan Facility was 4.83% at March 31, 2017. The Company amortized $0.1 million and $0.3 million of debt discount to interest expense during the three and six months ended March 31, 2017, respectively. The Term Loan Facility matures on June 9, 2023.

Additionally, the Term Loan Facility agreement requires Solutions to make mandatory principal payments on an annual basis, with the first required calculation determined at fiscal year-end (September 30, 2017), if cash flows for the year, as defined in the Term Loan Facility exceed certain levels specified in the Term Loan Facility. Solutions generally has the right to prepay loans in whole or in part, without incurring any penalties for early payment.

Obligations under the Term Loan Facility are secured by a first priority lien on all Term Loan first lien collateral, including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, and a second priority lien on all ABL first lien collateral, including accounts receivable and inventory of the loan parties under the Term Loan Facility, subject to certain limitations.

Fees paid to the lenders during the fiscal year ended September 30, 2016 in connection with the Term Loan Facility totaled $18.5 million and were recorded as a reduction of the debt balance to be amortized as interest expense over the remaining term of ~~promissory note is $235,032.~~

~~Administrative Service Agreement~~

Onthe Term Loan Facility.

As of March 31, 2017, Solutions was in compliance with the covenants of the Term Loan Facility.

Debt Issuance Cost Amortization

Amortization expense included in interest expense related to debt issuance costs of the Term Loan Facility was $0.6 million and $1.1 million for the three and six months ended March 31, 2017, respectively. As a result of TLB Amendment No. 1, the Company incurred debt issuance costs of $1.3 million during the three months ended March 31, 2017, which will be amortized throughout the remaining life of the Term Loan Facility. Amortization expense included in interest expense related to debt issuance costs of the Predecessor Term Loan Facility and the Notes was $1.1 million and $2.2 million for the three and six months ended March 31, 2016, ~~the Company has agreed to pay $10,000 a month for office space, administrative services and secretarial support to WL Ross & Co. LLC, an affiliate~~respectively.

Table of ~~the Sponsor. Upon the completion~~Contents

Capital Lease Obligations

The capital lease obligation balance of the Business Combination or the liquidation of the Company, the Company will cease paying these monthly fees. The Sponsor irrevocably and unconditionally waived the $10,000 per month payment obligations of the Company for office space, administrative services and secretarial support for the year beginning on January 1, 2015 to December 31, 2016.

~~F-12~~

~~Deferred Underwriting Compensation~~

The Company is committed to pay the Deferred Discount totaling $18,309,150 or 3.66% of the gross offering proceeds of the Public Offering, to the underwriters upon the Company’s consummation of a Business Combination. The underwriters are not entitled to any interest accrued on the Deferred Discount, and no Deferred Discount is payable to the underwriters if there is no Business Combination.

~~Income Taxes~~

~~Components of the Company’s deferred tax asset at March 31, 2016 are as follows:~~

~~Net operating loss~~	~~452,396~~
~~Valuation allowance~~	~~(452,396~~	)
	-

~~Components of the Company’s deferred tax asset at December 31, 2015 are as follows:~~

~~Net operating loss~~	~~415,233~~
~~Valuation allowance~~	~~(415,233~~	)
	-

~~The Company established a valuation allowance of approximately $452,000~~$36.8 million as of March 31, ~~2016~~2017 is primarily associated with the Ryder Lease and ~~$415,000 as~~the Montgomery Lease. The Ryder Lease obligation excludes decreasing annual interest payments ranging from $1.0 million to $0.2 million, for aggregate interest payments totaling $4.2 million. The Montgomery Lease obligation excludes decreasing annual interest payments ranging from $1.0 million to $0.1 million, for aggregate interest payments of ~~December 31, 2015, which fully offsets~~$14.1 million. See Note 5.

8. Derivatives

During the ~~deferred tax asset as of~~three months ended March 31, 2016 and December 31, 2015 of approximately $452,000 and $415,000 respectively. The deferred tax asset results from applying an effective combined federal and state tax rate of 35% to net operating loss of approximately $1,292,500 as of March 31, 2016 and $1,186,000 as of December 31, 2015, respectively. The Company’s net operating losses will expire beginning 2034.

~~Investments and cash held in Trust~~

As of March 31, 2016 investment securities in the Company’s Trust Account consist of $312,597,363 in United States Treasury Bills and $188,426,332 in a money market fund. As of December 31, 2015, investment securities in the Company’s Trust Account consist of $499,848,764 in United States Treasury Bills and $799,033 in money market fund. The Company classifies its United States Treasury and equivalent securities as held-to-maturity in accordance with FASB ASC 320, “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which2017, the Company ~~has~~entered into four interest rate swap agreements with a combined notional amount of $300.0 million to help mitigate interest rate risk related to the ~~ability~~variable-rate Term Loan Facility. The swap agreements expire at various dates from February 2020 through March 2022 and ~~intent to hold until maturity. Held-to-maturity treasury securities~~ are ~~recorded at amortized cost on~~accounted for as cash flow hedges. Gains or losses resulting from changes in the ~~accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.~~

~~F-13~~

~~The carrying amount, excluding accrued interest income, gross unrealized holding gains and~~ fair value of ~~held~~the swaps are recorded in other comprehensive income to ~~maturity securities~~the extent that the swaps are effective as hedges. Gains and losses resulting from changes in the fair value applicable to the ineffective portion, if any, are reflected in income. Gains and losses recorded in other comprehensive income are reclassified into and recognized in income when the interest expense on the Term Loan Facility is recognized.

Derivative assets and liabilities at ~~December~~March 31, ~~2015~~2017 and ~~December~~September 30, 2016 consisted of the following:



	Recorded to	March 31, 2017		September 30, 2016
Short-term derivative asset	Other current assets	$	0.1	$	—
Long-term derivative asset	Other non-current assets	$	1.6	$	—
Short-term derivative liability	Accrued expenses and other liabilities	$	1.4	$	—
Other Comprehensive Income	Accumulated other comprehensive loss	$	0.3	$	—

Prior to the Business Combination, the Predecessor was a party to interest rate swap agreements to mitigate the exposure to interest rate risk related to the variable-rate Predecessor Term Loan Facility. The agreements had varying expiration dates through March 2017, and were accounted for as cash flow hedges. Accordingly, gains or losses resulting from changes in the fair value of the swaps were recorded in other comprehensive income to the extent that the swaps are effective as hedges. Gains and losses resulting from changes in the fair value applicable to the ineffective portion, if any, were reflected in income. Gains and losses recorded in other comprehensive income were reclassified into and recognized in income when the interest expense on the Predecessor Term Loan Facility was recognized.

Gains and losses (net of reclassifications into income) related to the interest rate swaps of the Company and the Predecessor were as follows:



		Successor				Predecessor
	Recorded to	Three Months Ended March 31, 2017		Six Months Ended March 31, 2017		Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
Realized loss	Interest expense	$	0.3	$	0.3	$	0.1	$	0.2
Unrealized gain	Other comprehensive income(loss)	$	0.3	$	0.3	$	0.1	$	0.2

At March 31, ~~2014 are as follows:~~

Gross
Carrying Amount Unrealized
March 31, 2016 Holding Gains Fair Value
Held-to-maturity:
U.S. Treasury Securities (Maturity dates range from 4/28/16 to 5/19/16) $ 312,597,363 $ 94,477 $ 312,691,840

Gross
Carrying Amount Unrealized
December 31, 2015 Holding Gains Fair Value
Held-to-maturity:
U.S. Treasury Securities (Maturity dates range from 3/31/16 to 5/19/16) $ 499,848,764 $ 41,283 $ 499,890,047

~~Fair Value Measurement~~

~~The Company complies with FASB ASC 820,~~2017, $1.3 million in unrealized losses were expected to be realized and recognized in income within the next twelve months.

See Note 9 for additional information on the fair value of the Predecessor’s derivative instruments.

Table of Contents

9. Fair Value Measurements

The accounting standard for ~~its~~fair value measurements establishes a framework for measuring fair value that is based on the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The fair value hierarchy is as follows:

● Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

● Level 2—Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

● Level 3—Prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions a third party would use in pricing an asset or liability based on the best information available under the circumstances. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities ~~that are re-measured~~ and ~~reported at~~their placement within the fair value hierarchy levels. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Fair value of financial instruments

The carrying values of cash and cash equivalents, accounts and notes receivable, accounts payable and short-term borrowings approximate their fair value due to the short-term maturity of those instruments.

The carrying values of borrowings outstanding under the Credit Facilities approximate fair value at ~~each reporting period,~~March 31, 2017 and ~~non-financial assets~~September 30, 2016, primarily due to their variable interest rate. The estimated fair value of these instruments is classified by the Company as a Level 3 measurement within the fair value hierarchy due to the varying interest rate parameters as outlined in the respective loan agreements.

Assets and ~~liabilities~~Liabilities Measured at Fair Value on a Non-Recurring Basis

In addition to the financial instruments that are ~~re-measured and reported at fair value at least annually.~~

~~The following table presents information about the Company’s assets that are measured~~recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a non-recurring basis as required by U.S. GAAP. Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges or as part of a business combination. As discussed in Note 3, during the six months ended March 31, 2017, the Company recorded non-recurring fair value measurements related to its asset acquisition. In addition, in the fiscal year ended September 30, 2016, the Company recorded non-recurring fair value measurements related to the Business Combination. These fair value measurements were classified as Level 3 within the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Contingent Consideration

The fair value of the contingent consideration related to the Deferred Cash Consideration as discussed in Note 3 was $43.1 million and $35.0 million as of March 31, 2017 and September 30, 2016, ~~and December 31, 2015, and indicates~~respectively. The measurement of the contingent consideration related to the Deferred Cash Consideration is classified by the Company as a Level 3 measurement within the fair value ~~hierarchy~~hierarchy. In order to estimate the fair value of the ~~valuation techniques~~Deferred Cash Consideration, the Company ~~utilized~~estimates the value of the Excess Shares using a Monte Carlo simulation model with the market price of the Company’s common stock at each valuation date being a significant input to ~~determine such~~this model. Unobservable inputs to the valuation are the expected volatility during the applicable period as well as a marketability discount to reflect the illiquidity of the Excess Shares given their terms. An increase in the market price of the Company’s common stock has the same directional effect on the value of the liability related to the Deferred Cash Consideration. An increase in the volatility and marketability discount will lower the value of the liability related to the Deferred Cash Consideration.

Table of Contents

The fair ~~value. In general,~~value of the liability for the contingent consideration related to the TRA as discussed in Note 3 was $97.9 million and $83.4 million as of March 31, 2017 and September 30, 2016, respectively. The liability for the contingent consideration related to the TRA is classified by the Company as a Level 3 measurement within the fair ~~values determined by~~value hierarchy. The Company estimates the fair value of the liability for the contingent consideration related to the TRA based on a discounted cash flow model which incorporates assumptions of projected taxable income, projected income tax liabilities and an estimate of tax benefits expected to be realized as a result of the Business Combination. Key inputs to the valuation are prevailing tax rates and market interest rates impacting the discount rate. An increase in the discount rate will lower the value of the liability related to the TRA and an increase in prevailing tax rates will increase the value of the liability related to the TRA.

During the three months ended March 31, 2017, the Company recorded a $2.0 million adjustment to the estimated fair value of the TRA liability as of the Closing Date, related to the assessments of the tax attributes associated with certain entities.

Changes in the fair value of the contingent consideration obligations for the six months ended March 31, 2017 were as follows:



	TRA		Deferred Cash Consideration		Total Fair Value
Contingent consideration as of September 30, 2016	$	83.4	$	35.0	$	118.4
Measurement period adjustment	2.0		—		2.0
Change in fair value of contingent consideration⁽¹⁾	12.5		8.1		20.6
Contingent consideration as of March 31, 2017	$	97.9	$	43.1	$	141.0

⁽¹⁾Included in Operating income(loss) in the condensed consolidated statements of operations.

Significant changes in the estimates and inputs used in determining the fair value of the contingent consideration could have a material impact on the amounts recognized as a component of Operating income (loss) in future periods.

Interest Rate Swaps

The Company classifies interest rate swaps within Level 2. During the three months ended March 31, 2017, the Company entered into four interest rate swap agreements to help mitigate interest rate risk related to the variable-rate Term Loan Facility. The agreements expire at various dates through March 2022. At March 31, 2017, the Company recorded $0.1 million in Other current assets, $1.6 million in Other non-current assets and $1.4 million in Accrued expenses and other liabilities in the condensed consolidated balance sheet related to these instruments.

Prior to the Business Combination, the Predecessor was a party to interest rate swap agreements to mitigate the Predecessor’s interest rate risk related to its variable-rate Predecessor Term Loan Facility. The agreements had varying expiration dates through March 2017. At March 31, 2016, the Company recorded $0.3 million in Accrued expenses and other liabilities and less than $0.1 million in Other non-current liabilities in the condensed consolidated balance sheet related to these instruments. As a result of the Business Combination, the Predecessor Term Loan Facility was extinguished and the related interest rate swap agreements were terminated.

During the six months ended March 31, 2017 and 2016, the Company and the Predecessor did not have any transfers between Level 1, ~~inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by~~ Level 2 ~~inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by~~or Level 3 ~~inputs are unobservable data points for~~fair value measurements.

10. Share-based Compensation and Employee Benefit Plans

On June 8, 2016, the ~~asset or liability, and includes situations where there is little, if any, market activity for~~Company’s stockholders approved the ~~asset or liability:~~

Quoted Prices in Significant Other Significant Other
Active Markets Observable Unobservable
Description March 31, 2016 (Level 1) Inputs (Level 2) Inputs (Level 3)
Investments in treasury bills held in trust account 312,691,840 312,691,840 - -
Investments in money market fund held in trust account 188,426,332 188,426,332 - -
Total $ 501,118,172 $ 501,118,172 $ - $ -

Quoted Prices in Significant Other Significant Other
Active Markets Observable Unobservable
Description December 31, 2015 (Level 1) Inputs (Level 2) Inputs (Level 3)
Investments in treasury bills held in trust account 499,890,047 499,890,047 - -
Investments in money market fund held in trust account 799,033 799,033 - -
Total $ 500,689,080 $ 500,689,080 $ - $ -

~~F-14~~

~~Stockholders’ Equity~~

~~Common Stock~~

2016 LTIP, with an effective date of March 30, 2016, covering approximately a ten-year period. No awards may be granted after March 20, 2026. The ~~Company is authorized~~2016 LTIP permits the grant of up to ~~issue 200,000,000~~9,000,000 shares of common stock for various types of awards to employees, directors and consultants of the Company or its subsidiaries, including incentive and non-incentive stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, stock awards, conversion awards and performance awards.

Vesting conditions of awards under the 2016 LTIP are determined by the Compensation Committee of the Board of Directors of the Company, including treatment upon the occurrence of a change of control of the Company. Upon a change of control, the Compensation Committee has the discretion to remove forfeiture restrictions, accelerate vesting, require recipients of awards to surrender the awards for cash consideration, cancel unvested awards without payment of consideration, cause any surviving entity to assume and continue any outstanding awards, or make other such adjustments as the Compensation Committee deems appropriate to reflect such change of control.

Table of Contents

If any change is made to the Company’s capitalization, appropriate adjustments will be made by the Compensation Committee as to the number and price of shares awarded under the 2016 LTIP, the securities covered by such awards, the aggregate number of shares of common stock of the Company available for the issuance of awards under the 2016 LTIP and the maximum annual per person compensation limits on share-based awards under the 2016 LTIP.

Other than in connection with a change in capitalization or other transaction where an adjustment is permitted or required under the terms of the 2016 LTIP, the Compensation Committee is prohibited from making any adjustment or approving any amendment that reduces or would have the effect of reducing the exercise price of a stock option or stock appreciation right previously granted under the 2016 LTIP unless the Company’s stockholders have approved such adjustment or amendment.

In each calendar year during any part of which the 2016 LTIP is in effect, an employee may not receive awards under the plan in excess of 1,000,000 shares of common stock, or a value of greater than $12.0 million if an award is to be paid in cash or if settlement is not based on shares of common stock, in each case, multiplied by the number of full or partial calendar years in any performance period established with respect to an award, if applicable. A non-employee member of the Board of Directors of the Company may not be granted awards with a cumulative value of greater than $1.0 million during any calendar year for services rendered in their capacity as a director. This limit does not apply to grants made to a non-employee director for other reasons not related to their services as a director.

During the three and six months ended March 31, 2017, the Company granted 162,000 and 212,000 PSUs, respectively, to employees. The performance aspect of the PSUs vests on June 30, 2019, entitling the recipient to receive a certain number of shares of the Company’s common stock, based on the Company’s achievement of the performance goals included in the PSUs. Depending on the performance of the Company’s common stock during the approximate three-year performance period, a recipient of the award is entitled to receive a number of common shares equal to a percentage, ranging from 0% to 200%, of the initial award granted, with a 35% total shareholder return entitling the recipient to receive 100% of the award granted. As a result, the Company may issue up to 424,000 shares of the Company’s common stock related to these awards. If the Company��s total shareholder return for the performance period is negative, then the number of units ultimately awarded is based on the Company’s achievement of its cumulative Adjusted EBITDA target, as defined by the PSU agreement, during the performance period. If total shareholder return is between negative 15% and 0%, a recipient is entitled to receive a number of shares of stock between 50% and 70% of the number of PSUs granted. If the cumulative Adjusted EBTIDA target is not met, or the total shareholder return is less than negative 15%, no shares of the Company’s common stock will be issued. The Company used the Monte Carlo simulation model to estimate the fair value of the PSU awards at the grant date, considering the probability of satisfying the various performance criteria. The resulting grant date fair value is recognized as expense on a straight-line basis from the grant date through the end of the performance period. The assumptions used in the Monte Carlo simulation model for PSUs included an expected stock price volatility of 40% based on a peer group of similar companies, an expected dividend yield of 0%, an expected term of between two and three years, and a risk-free interest rate of between 0.93% and 1.3%.

The following table summarizes PSU award activity during the six months ended March 31, 2017:



	PSUs		Average Grant Date Fair Value Per Unit
Unvested PSUs at September 30, 2016	1,542,500		$	9.12
Grants	212,000		7.66
Vested	—		—
Forfeited/Canceled	(167,500	)	9.13
Unvested PSUs at March 31, 2017	1,587,000		$	8.92

The PSU awards are accounted for as equity instruments, and the Company recognized compensation expense of $1.1 million and $2.2 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations for the three and six months ended March 31, 2017, respectively, related to the PSUs. As of March 31, 2017, the outstanding PSUs had a weighted-average remaining contract life of 2.2 years. As of March 31, 2017, there was $9.9 million of total unrecognized compensation expense related to non-vested PSUs.

Table of Contents

During the fiscal year ended September 30, 2016, the Company also granted 64,518 shares of restricted stock to certain of the Company's non-employee directors under the 2016 LTIP. The restricted stock will vest on the anniversary of the grant date provided the director continues his services as a director of the Company. The fair value of the restricted stock was determined by the closing price of the Company's common stock on the date of grant.

The following table summarizes restricted stock activity during the six months ended March 31, 2017:



	Shares of Restricted Stock		Average Grant Date Fair Value Per Unit
Restricted stock at September 30, 2016	64,518		$	9.27
Grants	—		—
Vested	—		—
Forfeited/Canceled	(10,753	)	9.27
Restricted stock at March 31, 2017	53,765		$	9.27

The restricted stock awards are accounted for as equity instruments, and the Company recognized compensation expense of $0.1 million and $0.3 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three and six months ended March 31, 2017, respectively, related to the restricted stock. As of March 31, 2017, there was $0.1 million of total unrecognized compensation expense related to restricted stock, and a weighted average remaining life of 0.3 years.

During the fiscal year ended September 30, 2016, TPG entered into agreements with certain of the Company's officers and employees to award a total of 100,000 shares of restricted stock to such officers and employees from shares of the Company's common stock owned by TPG. These awards vest in equal amounts over a three-year period provided that such officers and employees continue their employment with the Company. The Company recognized compensation cost of $0.1 million and $0.2 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three and six months ended March 31, 2017, respectively, related to these awards. As of March 31, 2017, there was $0.7 million of total unrecognized compensation cost related to these awards, and a weighted average remaining life of 2.2 years.

While these awards were not made pursuant to the 2016 LTIP, they constitute equity-based compensation and therefore will count against the 2016 LTIP's share reserve to the extent the awards vest.

During the six months ended March 31, 2017, the Company granted certain employees a total of 28,000 RSUs that vest equally over a three-year period on the anniversary of the grant date provided the employee remains employed by the Company. Upon vesting, the recipients will receive a share of common stock in the Company for each RSU awarded. The fair value of these RSUs was determined based on the closing price of the Company’s stock on the grant date.

The following table summarizes RSU award activity during the six months ended March 31, 2017:



	RSUs	Average Grant Date Fair Value Per Unit
Unvested RSUs at September 30, 2016	—	$	—
Grants	28,000	7.28
Vested	—	—
Forfeited/Canceled	—	—
Unvested RSUs at March 31, 2017	28,000	$	7.28

The RSUs are accounted for as equity instruments, and the Company recognized compensation cost of less than $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three and six months ended March 31, 2017 related to the RSUs. As of March 31, 2017, there was $0.2 million of total unrecognized compensation cost related to the RSUs, and a weighted average remaining life of 2.6 years.

Table of Contents

The Company also awarded 10,500 phantom RSUs and 10,000 phantom PSUs to certain non-U.S. employees. The phantom RSUs vest equally over a three-year period on the anniversary of the grant date while the phantom PSUs vest under the same conditions as the PSU awards described above. Upon vesting and provided the employee remains employed by the Company at that time, the awards will be settled in cash. In accordance with ASC 718, these specific phantom RSU and phantom PSU awards are accounted for as a liability, with the awards re-measured at the end of each reporting period based on the closing price of the Company’s common stock or using a Monte Carlo simulation model, as applicable. Compensation expense is recognized ratably on a straight-line basis over the requisite service period. An immaterial amount of compensation expense was recognized during the three and six months ended March 31, 2017 related to these awards.

As of March 31, 2017, there were 7,210,735 shares of the Company’s common stock available for issuance under the 2016 LTIP.

Defined Contribution Plans

Qualifying employees of the Company are eligible to participate in the Solutions 401(k) Plan. The 401(k) Plan is a defined contribution plan designed to allow employees to make tax deferred contributions as well as company contributions, designed to assist employees of the Company and its affiliates in providing for their retirement. The Company matches 100% of employee contributions up to 4.0%. The Company makes an additional contribution to the 401(k) Plan of 1.5%, 3.0%, or 4.5%, based upon years of service of one to ten years, eleven to twenty years and twenty-one years or more, respectively. A version of the 401(k) Plan is also available for qualifying employees of the Company in its foreign subsidiaries.

The following summarizes contributions to the plans described above:



	Successor				Predecessor
	Three Months Ended March 31, 2017		Six Months Ended March 31, 2017		Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
Contributions recorded as a component of cost of sales and operating expenses	$	1.0	$	2.0	$	1.0	$	1.9
Contributions recorded as a component of selling, general and administrative expenses	1.6		3.2		1.7		3.2
Total contributions	$	2.6	$	5.2	$	2.7	$	5.1

Predecessor Equity Plan

The Predecessor previously issued unregistered Series B units in Holdings to directors and certain officers and employees. The units issued were initially unvested, and with respect to units issued to certain officers and employees, 50% of the Series B units would vest 20% annually over a five-year period (“Time-Based Units”) and 50% of the Series B units would vest in accordance with a performance-based schedule that was divided into five separate and equal twelve month periods (“Performance-Based Units”). The Board of Directors of the Predecessor established EBITDA-based performance targets for purposes of determining vesting of the Performance-Based Units. Further, all Performance-Based Units would automatically vest upon a liquidity event, provided the award holder remained employed through the date of the liquidity event. The Series B Units were accounted for as equity instruments, and the Predecessor recognized compensation expense of $0.3 million and $0.6 million, respectively, as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three and six months ended March 31, 2016 related to these awards.

All vested and unvested Series B units in existence as of the closing of the Business Combination were exchanged for equity interests of New Holdco, which received a portion of the consideration paid to the Selling Equityholders in the Company Merger in exchange for such Series B Units.

Table of Contents

11. Equity

Common Stock

The authorized common stock of the Company consists of 300,000,000 shares. Holders of the Company’s common stock are entitled to one vote for each share of common stock. AtAs of March 31, ~~2016,~~2017, there were ~~62,531,250~~89,276,183 shares of common stock issued and outstanding, ~~including 47,512,924 shares~~which includes the 12,476,250 Founder Shares.

Founder Shares

As of March 31, 2017 there were 12,476,250 Founder Shares. These Founder Shares are subject to ~~possible redemption. At December 31, 2015, there were 62,531,250~~forfeiture on the tenth anniversary of the Closing Date unless:

with respect to 50% of such Founder Shares, the last sale price of the Company’s common stock as quoted on NASDAQ equals or exceeds $12.50 per share (as adjusted for stock splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period; and

with respect to the remaining 50% of such Founder Shares, the last sale price of the Company’s common stock equals or exceeds $15.00 per share (as adjusted for stock splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period; or

the post-combination company completes a liquidation, merger, stock exchange or other similar transaction that results in all or substantially all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property or any transaction involving a consolidation, merger, proxy contest, tender offer or similar transaction in which the post-combination company is the surviving entity which results in a change in the majority of the Company’s board of directors or management team or the Company’s post-combination stockholders immediately prior to such transaction ceasing to own a majority of the surviving entity immediately after such transaction.

The Founder Shares will not participate in dividends or other distributions with respect to the shares prior to these targets being met, whereupon the Founder Shares shall be entitled to all dividends and distributions paid on the common stock after the Business Combination as if they had been holders of record entitled to receive distributions on the applicable record date.

Warrants

As of March 31, 2017 there were 50,025,000 warrants outstanding ~~including 47,663,155 shares subject~~ to ~~possible redemption.~~

~~Preferred Stock~~

~~The Company is authorized to issue 1,000,000~~purchase 25,012,500 shares of common stock at an exercise price of $11.50 per share.

Preferred Stock

The authorized preferred stock ~~with such designations, voting and other rights and preferences as may be determined from time to time by~~of the ~~Board~~Company consists of ~~Directors. At~~1,000,000 shares. As of March 31, ~~2016 and December 31, 2015,~~2017, there were no shares of preferred stock issued and outstanding.

~~10.~~

~~Subsequent Events~~

~~Promissory Note~~

Table of Contents

12. Earnings per Share

A reconciliation of the numerators and denominators of the basic and diluted per share computation follows. No such computation is necessary for the Predecessor period as the Predecessor was organized as a limited liability company and did not have publicly traded common shares.



	Three Months Ended March 31, 2017			Six Months Ended March 31, 2017
Basic:
Net loss	$	(1.1	)	$	(9.4	)
Weighted average number of common shares outstanding during the period	76,746,168			76,746,168
Net loss per common share - basic	$	(0.01	)	$	(0.12	)

Diluted:
Net loss	$	(1.1	)	$	(9.4	)
Denominator for diluted earnings per share:
Weighted average number of common shares outstanding during the period	76,746,168			76,746,168
Incremental common shares attributable to outstanding unvested restricted stock and unvested restricted stock units	—			—
Denominator for diluted earnings per common share	76,746,168			76,746,168
Net loss per common share - diluted	$	(0.01	)	$	(0.12	)

For the three and six months ended March 31, 2017, there were 12,476,250 Founder Shares excluded from the basic and diluted computations because such shares were subject to forfeiture, 1,587,000 PSU awards which were not included in the computation of diluted shares outstanding because performance targets and/or market conditions were not yet met for these awards. Diluted shares outstanding also did not include 25,012,500 shares of common stock issuable on the exercise of 50,025,000 warrants because the warrants were out-of-the-money. As of the three and six months ended March 31, 2017, the 53,765 shares of unvested restricted stock awards issued to directors and 28,000 shares of restricted stock units awarded to employees were not included in the diluted share calculation, as their impact on the Company’s net loss would have been anti-dilutive.

13. Commitments, Contingencies and Litigation

Operating Leases

The Company is a lessee of office buildings, retail outlets, transportation equipment, warehouses and storage facilities, other equipment, facilities and properties under operating lease agreements that expire at various dates. Rent expense (including rentals under short-term leases) was $6.7 million and $13.1 million for the three and six months ended March 31, 2017, respectively, and $6.0 million and $12.2 million for the three and six months ended March 31, 2016, respectively.

Future minimum non-cancellable rental payments as of March 31, 2017 are as follows:



2018	$	14.9
2019	12.4
2020	8.2
2021	6.1
2022	5.1
Thereafter	5.3
Total	$	52.0

Table of Contents

Capital Leases

The Company leases certain equipment and facilities under capital lease agreements. As of March 31, 2017 future minimum lease payments under capital leases were as follows:



2018	$	6.9
2019	7.2
2020	7.2
2021	7.0
2022	7.0
Thereafter	38.7
Total minimum capital lease payments	74.0
Less amount representing executory costs	(18.6		)
Less amount representing interest	(18.6		)
Present value of net minimum capital lease payments	$	36.8

Environmental Remediation

Due to the nature of its business, the Company is subject to various laws and regulations pertaining to the environment and to the sale, handling, transportation and disposal of chemicals and hazardous materials. These laws pertain to, among other things, air and water, the management of solid and hazardous wastes, transportation and human health and safety.

On March 31, 2011, the Predecessor purchased certain assets of the global distribution business (the "Distribution Business") from Ashland (the "Ashland Distribution Acquisition"), evidenced by the ADA Purchase Agreement. In the ADA Purchase Agreement, Ashland agreed to retain all known environmental remediation liabilities ("the Retained Specified Remediation Liabilities") and other environmental remediation liabilities unknown at the closing of the Ashland Distribution Acquisition related to the Distribution Business for which Ashland received notice prior to the fifth anniversary of the closing (the "Other Retained Remediation Liabilities") (collectively, the "Retained Remediation Liabilities"). Ashland’s liability for the Retained Remediation Liabilities is not subject to any claim thresholds or deductibles other than expenses the Predecessor incurs arising out of the Other Retained Remediation Liabilities. Had the Predecessor incurred expenses arising out of the Other Retained Remediation Liabilities, Ashland’s indemnification obligation would have been subject to an individual claim threshold of $0.2 million and an aggregate claim deductible of $5.0 million. Ashland’s indemnification obligations under the ADA Purchase Agreement as described above terminated as of March 31, 2016, other than for the Retained Remediation Liabilities. As a result, any environmental remediation liabilities reported to the Company after March 31, 2016 and not arising out of a Retained Remediation Liability will be liabilities of the Company. In addition, the Company is obligated to indemnify Ashland for any remediation liabilities, other than the Retained Remediation Liabilities, received by Ashland after March 31, 2016.

In July 2014, Ashland filed a lawsuit numbered Ashland Inc. v. Nexeo Solutions, LLC, Case No. N14C-07-243 JTV CCLD, in the Superior Court for the State of Delaware in and for New Castle County. In the suit, Ashland seeks a declaration that, pursuant to the ADA Purchase Agreement, Solutions is obligated to indemnify Ashland for losses Ashland incurs pertaining to the Other Retained Remediation Liabilities, up to the amount of the aggregate $5.0 million deductible applicable to expenses incurred by Solutions, whether or not Solutions incurs any expenses or obtains any indemnity from Ashland. Ashland further alleges that Solutions has breached duties related to the ADA Purchase Agreement by not having so indemnified Ashland for amounts Ashland has incurred for Other Retained Remediation Liabilities at sites where Ashland disposed of wastes prior to the Ashland Distribution Acquisition, and on that basis seeks unspecified compensatory damages, costs and attorney’s fees. The Company disagrees with Ashland’s construction of the ADA Purchase Agreement and is vigorously defending the lawsuit. The Company does not currently have any environmental or remediation reserves for matters covered under the ADA Purchase Agreement.

The Company’s reserves will be subject to numerous uncertainties that affect its ability to accurately estimate its costs, or its share of costs if multiple parties are responsible. These uncertainties involve the legal, regulatory and enforcement parameters governing environmental assessment and remediation, the nature and extent of contamination, the extent of required remediation efforts, the choice of remediation methodology, availability of insurance coverage and, in the case of sites with multiple responsible parties, the number and financial strength of other potentially responsible parties.

Table of Contents

Other Legal Proceedings

As a part of the Ashland Distribution Acquisition, Ashland agreed to retain and be responsible for certain product liability litigation related to the Distribution Business for which Ashland received written threat or notice prior to the fifth anniversary of the closing (as defined further in the ADA Purchase Agreement, the “Retained Litigation Product Liabilities”). Ashland is not obligated to indemnify the Company for Retained Litigation Product Liabilities as to which it had not received notice of a pending proceeding or threat of a proceeding by March 31, 2016. The Company is responsible for indemnifying Ashland for any Retained Litigation Product Liabilities for which such notices or threats were first received by Ashland after March 31, 2016.

The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities, including product liability claims. Management believes that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the Company.

Other Contingencies

In June 2014, the Predecessor self-disclosed to the DTSC that an inventory of its Fairfield facility had revealed potential violations of the Resource Conservation and Recovery Act and the California Health and Safety Code. Although no formal proceeding has been initiated, the Company expects the DTSC to seek payment of fines or other penalties for non-compliance. The Company does not expect the amount of any such fine or other penalty to have a material adverse effect on its business, financial position or results of operations.

14. Related Party Transactions

Contingent Consideration Obligations Pursuant to the TRA and the Merger Agreement

Subsequent to the ~~period covered by this report, on April 29, 2016,~~Business Combination, TPG beneficially owns approximately 35% of the ~~Company borrowed an additional $50,000 on~~Company’s common stock, including Founder Shares, and is considered a related party of the ~~promissory notes issued March 31, 2016.~~

~~Subscription Agreements~~

Successor. In connection with the ~~Proposed Nexeo~~ Business Combination, TPG became a party to the ~~Company~~TRA and obtained the right to receive the Deferred Cash Consideration pursuant to the Merger Agreement. The fair value of these contingent consideration liabilities was $141.0 million as of March 31, 2017, of which $135.9 million is recorded in Due to related party pursuant to contingent consideration obligations in Non-current Liabilitiesand $5.1 million is recorded in Due to related party pursuant to contingent consideration obligations in Current Liabilitieson the Company’s condensed consolidated balance sheets. See Note 3 and Note 9.

Predecessor - Other Agreements with TPG

The Predecessor entered into agreements with TPG, including a ~~subscription~~management services agreement dated May 9, 2016, with Fidelity Select Portfolios: Chemicals Portfolio, Fidelity Advisor Series I: Fidelity Advisor Value Fund, Fidelity Capital Trust: Fidelity Value Fund, Fidelity Select Portfolios: Materials Portfolio, Fidelity Central Investment Portfolios LLC: Fidelity Materials Central Fund and Variable Insurance Products Fund IV: Materials Portfolio, which funds we collectively refer to as “Fidelity” and which subscription agreement we refer to as the “Fidelity Subscription Agreement”, pursuant to which ~~Fidelity has agreed to purchase up to approximately 3.86 million shares, or $38.6 million,~~the Predecessor paid TPG management fees and also consulting fees for services provided. The fees incurred in connection with this agreement were recorded in Selling, general and administrative expenses in the condensed consolidated statements of ~~shares of Common Stock on~~operations. As a ~~private placement basis immediately prior to the closing~~result of the Business ~~Combination.~~

~~Also~~Combination on the Closing Date, TPG and the Predecessor terminated the management services agreement and their rights and obligations thereunder.

The table below summarizes activity recorded during the respective periods related to the items described above:



	Successor				Predecessor
	Three Months Ended March 31, 2017		Six Months Ended March 31, 2017		Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
Sales to related entities:
TPG	$	1.5	$	2.2	$	0.8	$	1.8
Amounts included in Selling, general and administrative expenses
Management fees to TPG	$	—	$	—	$	0.7	$	1.6
Consulting fees to TPG	$	—	$	—	$	0.2	$	0.2

There were no purchases from TPG related entities in the Successor or Predecessor periods.

Table of Contents

TPG related entities owed the Company $0.5 million at March 31, 2017 and $0.6 million at September 30, 2016 which were included in Accounts and notes receivable in the Company’s condensed consolidated balance sheets.

15. Income Taxes

The Company and its two active U.S. corporate subsidiaries, Blocker and Sub Holding, were both incorporated in the U.S. and as such are subject to U.S. income taxes. The Company and Blocker will file a consolidated U.S. Federal income tax return and both will file various state returns. Sub Holding will file a separate U.S. Federal income tax return and various state tax returns. The Company’s controlled foreign corporations are subject to taxation at the entity level in their respective jurisdictions.

Holdings is organized as a limited liability company and is taxed as a partnership for U.S. income tax purposes. As such, with the exception of a limited number of state and local jurisdictions, Holdings is not subject to U.S. income taxes. Accordingly, Blocker and Nexeo Solutions, Inc. report their share of Holdings’ taxable income earned after the Closing Date on their respective U.S. federal tax return.

Income tax expense for the three months ended March 31, 2017 was $0.8 million on pre-tax loss of $0.3 million for the Successor compared to the income tax expense of $1.8 million on pre-tax income of $3.8 million for the three months ended March 31, 2016 for the Predecessor. The current period tax expense was largely attributable to foreign income tax expense on profitable foreign operations. The prior period tax expense was largely attributed to foreign income tax expense on profitable foreign operations.

Income tax benefit for the six months ended March 31, 2017 was $1.9 million on pre-tax loss of $11.3 million for the Successor compared to the income tax expense of $3.1 million on pre-tax income of $9.4 million for the six months ended March 31, 2016 for the Predecessor. The current period tax benefit was largely attributable to U.S. operations related to deferred taxes driven by the net loss incurred during the current period. The prior period tax expense was largely attributed to foreign income tax expense on profitable foreign operations.

For all periods, the Company computed the provision for income taxes based on the actual year-to-date effective tax rate by applying the discrete method. Use of the annual effective tax rate, which relies on accurate projections by legal entity of income earned and taxed in foreign jurisdictions, as well as accurate projections by legal entity of permanent and temporary differences, was not considered a reliable estimate for purposes of calculating year-to-date income tax expense.

At March 31, 2017 and September 30, 2016, the valuation allowance was $3.2 million and $2.8 million, respectively, primarily relating to Nexeo Plaschem operations. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon management’s expectations at March 31, 2017, management believes it is more likely than not that it will realize the majority of its deferred tax assets.

Uncertain Tax Positions

U.S. GAAP prescribes a recognition threshold and measurement attribute for the accounting and financial statement disclosure of tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step requires the Company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. The second step requires the Company to recognize in the financial statements each tax position that meets the more likely than not criteria, measured as the amount of benefit that has a greater than 50% likelihood of being realized. Differences between the amount of tax benefits taken or expected to be taken in the income tax returns and the amount of tax benefits recognized in the financial statements represent the Company’s unrecognized income tax benefits, which are recorded as a liability, with the long-term portion included in Other non-current liabilities and the current portion included in Accrued expenses and other liabilities on the Company’s condensed consolidated balance sheets.

The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of Income tax expense in the condensed consolidated statements of operations. There was an insignificant amount of interest and penalties recognized during all periods. As of March 31, 2017 and September 30, 2016, the Company had $0.6 million and $1.2 million, respectively, related to uncertain tax positions, including related accrued interest and penalties. This decrease was related to the release of uncertain tax provisions from the prior year and lapses in statutory tax periods.

Table of Contents

The Company or one of its subsidiaries files income tax returns in various state and foreign jurisdictions. Within the U.S., the Company is subject to federal and state income tax examination by tax authorities for periods after December 2012. With respect to countries outside of the U.S., with certain exceptions, the Company’s foreign subsidiaries are subject to income tax audits for years after 2011.

16. Segment and Geographic Data

The Company operates through three lines of business, or operating segments: Chemicals, Plastics and Environmental Services, which market to different sets of customers operating in an array of industries, with various end markets and customer segments within those industries. For segment presentation and disclosure purposes, the Chemicals and Plastics lines of business constitute separate reportable segments while the Environmental Services line of business, which does not meet the materiality threshold for separate disclosure and the historical composites products sales in Asia are combined in an "Other" segment.

Each line of business represents unique products and suppliers, and each line of business focuses on specific end markets within its industry based on a variety of factors, including supplier or customer opportunities, expected growth and prevailing economic conditions. Across the Chemicals and Plastics lines of business there are numerous industry segments, end markets and sub markets that the Company may choose to focus on. These end markets may change from year to year depending on the underlying market economics, supplier focus, expected profitability and the Company’s strategic agenda.

The Chemicals, Plastics and Environmental Services lines of business compete with national, regional and local companies throughout North America. Additionally, the Chemicals and Plastics lines of business compete with other distribution companies in Asia. The Plastics line of business also competes with other distribution companies in EMEA. Competition within each line of business is based primarily on the diversity of the product portfolio, service offerings, reliability of services and supply, technical support, price and delivery capabilities. The accounting policies used to account for transactions in each of the lines of business are the same as those used to account for transactions at the corporate level.

The Chemicals and Plastics lines of business are distribution businesses, while the Environmental Services line of business provides hazardous and non-hazardous waste collection, recovery, recycling and arrangement for disposal services.

A brief description of each segment follows:

Chemicals. The Chemicals line of business distributes specialty and industrial chemicals, additives and solvents to industrial users via railcars, barges, bulk tanker trucks and as packaged goods in trucks. The Company’s chemical products are distributed in more than 50 countries worldwide, primarily in North America and Asia. In connection with the distribution of chemicals products, the Company provides value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. While the Chemicals line of business serves multiple end markets, key end markets within the industrial space are household, industrial and institutional, performance coatings (including architectural coatings, adhesives, sealants and elastomers), lubricants, oil and gas and personal care.

Plastics. The Plastics line of business distributes a broad product line consisting of commodity polymer products and prime engineering resins to plastics processors engaged in blow molding, extrusion, injection molding and rotation molding via railcars, bulk trucks, truckload boxes and less-than-truckload quantities. The Company's plastics products are distributed in more than 50 countries worldwide, primarily in North America, EMEA and Asia. The Plastics line of business serves a broad cross section of industrial segments with a current focus on the healthcare and automotive end markets.

Other. The Environmental Services line of business, in connection with certain waste disposal service companies, provides customers with comprehensive on-site and off-site hazardous and non-hazardous waste collection, recovery and arrangement for disposal services or recycling in North America, primarily in the ~~Proposed Nexeo Business Combination,~~U.S. These environmental services are offered through the ~~Company entered into~~Company’s network of distribution facilities which are used as transfer facilities or through a ~~subscription agreement, dated May 6, 2016, with MFS Series Trust X~~staff of dedicated on-site waste professionals.

Table of Contents

The Chief Executive Officer is the Chief Operating Decision Maker. The Chief Operating Decision Maker reviews operating results in order to make decisions, assess performance and allocate resources to each line of business. In order to maintain the focus on ~~behalf~~line of ~~MFS Global Alternative Strategy Fund, MFS Series Trust I on behalf~~business performance, certain expenses are excluded from the line of ~~MFS New Discovery Fund~~business results utilized by the Company’s Chief Operating Decision Maker in evaluating line of business performance. These expenses include certain depreciation and ~~MFS Variable Insurance Trust on behalf~~amortization, selling, general and administrative expense, corporate items such as transaction related costs, interest and income tax expense. These items are separately delineated to reconcile to reported net income. No single customer accounted for more than 10% of ~~MFS New Discovery Series, which funds we collectively refer to as “MFS” and which subscription agreement we refer to as~~revenues for any line of business for each of the ~~“MFS Subscription Agreement” and, together with~~periods reported. Intersegment revenues were insignificant.

Certain assets are aggregated at the ~~Fidelity Subscription Agreement, the “Subscription Agreements”, pursuant to which MFS has agreed to purchase up to approximately 0.37 million shares, or $3.7 million,~~line of ~~shares of Common Stock on a private placement basis immediately prior~~business level. The assets attributable to the ~~closing~~Company’s lines of business, that are reviewed by the Chief Operating Decision Maker, consist of trade accounts receivable, inventories, goodwill and any specific assets that are otherwise directly associated with a line of business. The Company’s inventory of packaging materials and containers as well as property, plant and equipment are generally not allocated to a line of business and are included in unallocated assets.

Summarized financial information relating to the Company’s lines of business is as follows:



	Successor						Predecessor
	Three Months Ended March 31, 2017			Six Months Ended March 31, 2017			Three Months Ended March 31, 2016			Six Months Ended March 31, 2016
Sales and operating revenues
Chemicals	$	415.0		$	767.4		$	389.0		$	767.7
Plastics	471.7			884.2			443.9			862.4
Other	31.0			60.9			29.3			59.8
Total sales and operating revenues	$	917.7		$	1,712.5		$	862.2		$	1,689.9
Gross profit
Chemicals	$	50.6		$	93.3		$	50.1		$	97.4
Plastics	45.8			81.8			44.8			85.4
Other	5.8			11.5			6.4			13.7
Total gross profit	$	102.2		$	186.6		$	101.3		$	196.5
Selling, general & administrative expenses	80.0			154.5			76.7			151.4
Transaction related costs	0.3			1.1			6.3			7.3
Change in fair value related to contingent consideration obligations	10.0			20.6			—			—
Operating income	11.9			10.4			18.3			37.8
Other income	0.2			2.6			0.9			2.6
Interest income (expense)
Interest income	0.1			0.2			0.1			0.1
Interest expense	(12.5		)	(24.5		)	(15.5		)	(31.1		)
Income (loss) before income taxes	$	(0.3	)	$	(11.3	)	$	3.8		$	9.4



	March 31, 2017		September 30, 2016
IDENTIFIABLE ASSETS
Chemicals	$	698.9	$	656.8
Plastics	747.1		708.7
Other	85.2		85.0
Total identifiable assets by reportable segment	1,531.2		1,450.5
Unallocated assets	676.7		628.4
Total assets	$	2,207.9	$	2,078.9

Table of Contents

Goodwill amounts by reportable segment at March 31, 2017 are based on the preliminary allocation of the purchase consideration of the Business ~~Combination.~~

~~Pursuant~~Combination as of the Closing Date. Accordingly, the amounts allocated to goodwill are subject to adjustments that could have a material impact on total goodwill and goodwill by reportable segment. See Note 3.

Revenues by geographic location, based on the ~~Subscription Agreements,~~jurisdiction of the subsidiary entity receiving revenue credit for the sale, are presented below:



	Successor				Predecessor
	Three Months Ended March 31, 2017		Six Months Ended March 31, 2017		Three Months Ended March 31, 2016		Six Months Ended March 31, 2016
U.S.	$	684.2	$	1,271.6	$	655.7	$	1,281.2
Canada	46.7		83.6		39.0		74.9
Other North America	12.7		25.2		12.8		25.2
Total North America Operations	$	743.6	$	1,380.4	$	707.5	$	1,381.3
EMEA	124.4		221.3		108.4		213.1
Asia	49.7		110.8		46.3		95.5
Total	$	917.7	$	1,712.5	$	862.2	$	1,689.9

17. Subsequent Events

Ultra Chem Acquisition

On April 3, 2017, the Company ~~has agreed~~completed the Ultra Chem Acquisition for approximately $58.0 million pursuant to ~~register the shares sold in the private placement under the Securities Act by filing with the SEC~~ a ~~registration statement registering the resale~~stock purchase agreement dated March 9, 2017.

Table of such shares by Fidelity and MFS, subject to customary terms and conditions. Copies of the Subscription Agreements are filed with this Quarterly Report on Form 10-Q as Exhibit 10.6 and Exhibit 10.7, and are incorporated herein by reference, and the foregoing description of the Subscription Agreements are qualified in their entirety by reference thereto.

~~Other than the foregoing, management has performed an evaluation of subsequent events through the date of issuance of the financial statements, noting no items which require adjustments or disclosure.~~

~~F-15~~

Contents

~~ITEM~~

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

~~References to the “Company,” “our,” “us” or “we” refer to WL Ross Holding Corp.~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of ~~the Company’s~~our financial condition and results of operations should be read in conjunction with the ~~condensed~~Company’s financial statements and ~~the~~related notes ~~thereto contained~~appearing elsewhere in this ~~report. Certain information contained in~~Quarterly Report on Form 10-Q and with the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 filed with the SEC on December 8, 2016. This discussion ~~and analysis set forth below includes~~contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that ~~involve risks and uncertainties.~~

~~Special Note Regarding Forward-Looking Statements~~

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’smay affect our future operating results or financial ~~position, business strategy~~position. Actual results and the ~~plans and objectives~~timing of management for future operations, are forward-looking statements. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results couldevents may differ materially from those ~~contemplated~~contained in these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q.

The terms “the Company,” “us,” “our” and “we” and similar terms in this report refer to Nexeo Solutions, Inc. and its consolidated subsidiaries.

Overview

The Company is the result of the Business Combination between WLRH and Holdings that closed on June 9, 2016 and is referred to as the “Successor.” The “Predecessor” financial information reflects the operations of Holdings prior to the Closing Date of the Business Combination.

We are a global distributor of chemicals products in North America and Asia and plastics products in North America, EMEA, and Asia. In connection with the distribution of chemicals products, we provide value-added services such as custom blending, packaging and repackaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. We also provide environmental services, including waste collection, recovery and arrangement for disposal services and recycling in North America, primarily in the U.S., through our Environmental Services line of business.

We have long-standing relationships with major chemicals and plastics producers and suppliers, a strong geographic presence and supply chain network and a relatively stable customer base that benefits from the service and distribution value we provide. The products we distribute are used in a broad cross section of manufacturing industries, in various end markets and customer segments within those industries, including the household, industrial and institutional, lubricants, performance coatings (including architectural coatings, adhesives, sealants and elastomers), automotive, healthcare, personal care, oil and gas and construction end markets.

We distribute our broad product portfolio internationally through a supply chain consisting of owned, leased or third-party warehouses, rail terminals and tank terminals globally. We have a private fleet of tractors and trailers, primarily in North America.

Segment Overview

We are organized into three lines of business, or operating segments: Chemicals, Plastics and Environmental Services. Our lines of business market to different sets of customers operating in an array of industries, with various end markets and customer segments within those industries. For segment presentation and disclosure purposes, our Chemicals and Plastics lines of business constitute separate reportable segments while the Environmental Services line of business, which does not meet the materiality threshold for separate disclosure is included in the "Other" segment.

A brief description of each of our lines of business follows:

Chemicals. The Chemicals line of business distributes specialty and industrial chemicals, additives and solvents to industrial users via railcars, barges, bulk tanker trucks, and as packaged goods in trucks. While our chemicals products are distributed in more than 50 countries worldwide, we primarily distribute our chemicals products in North America and Asia. In connection with the distribution of chemicals products, we provide value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. While our Chemicals line of business serves multiple end markets, key end markets within the industrial space are household, industrial and institutional, performance coatings (including architectural coatings, adhesives, sealants and elastomers), lubricants, oil and gas and personal care.

Table of Contents

Plastics. The Plastics line of business distributes a broad product line consisting of commodity polymer products and prime engineering resins to plastics processors engaged in blow molding, extrusion, injection molding and rotation molding via railcars, bulk trucks, truckload boxes and less-than-truckload quantities. While our plastics products are distributed in more than 50 countries worldwide, we primarily distribute our plastics products in North America, EMEA and Asia. The Plastics line of business serves a broad cross section of industrial segments with a current focus on the healthcare and automotive end markets.

Environmental Services. The Environmental Services line of business, in connection with certain waste disposal service companies, provides customers with comprehensive on-site and off-site hazardous and non-hazardous waste collection, recovery and arrangement for disposal services or recycling in North America, primarily in the U.S. These environmental services are offered through our network of distribution facilities which are used as transfer facilities or through a staff of dedicated on-site waste professionals.

Key Factors Affecting our Results of Operations and Financial Condition

General and regional economic conditions. The consumption of chemicals and plastics in the broad industry segments and end markets that we serve generally corresponds to the level of production of goods and services in the global economy, amplified by the ~~forward-looking statements~~regional economies where we have commercial operations. As a result, when general economic conditions improve or deteriorate, our volumes tend to fluctuate accordingly. We manage our cost structure in line with general economic conditions, but our volumes and profitability are ultimately correlated with the underlying demand for the end-products of the industries we serve.

Price fluctuations. The prices at which we resell the products we distribute in our Chemicals and Plastics lines of business generally fluctuate in accordance with the prices that we pay for these products. Product prices we pay are largely driven by the underlying global and regional economic conditions that drive the prices of two primary raw materials of production: crude oil (primarily naphtha) and natural gas (primarily ethane). These two raw material sources are used in the production of propylene and ethylene which are key feedstocks used in over 90% of organic-based commodity and specialty chemicals, as well as in the subsequent production of the intermediate plastics products we distribute. The prices of these feedstocks are also affected by other factors including choices made by feedstock producers for uses of these feedstocks (e.g., as an ingredient in gasoline versus a feedstock to the chemical industry), the capacity devoted to production of these feedstocks and other macroeconomic factors that impact the producers. As a distributor, the prices of these feedstocks are not in our control. However, we are generally able to pass on finished good price increases and decreases to our customers in accordance with the fluctuations in our product costs and transportation-related costs (e.g., fuel costs). As a result, movements in our sales revenue and cost of sales tend to correspond with changes in our product prices. Additionally, as capacity or demand patterns change, we typically experience a corresponding change in the average selling prices of the products we distribute. Our gross profit margins generally decrease in deflationary price environments because we are selling inventory that was previously purchased at higher prices. Alternatively, our gross profit margins generally increase during inflationary price environments because we are able to sell inventory that was previously purchased at lower prices. The extent to which profitability increases or decreases, however, also depends on the relative speed at which selling prices adjust in relation to inventory costs. As a logistics provider, oil price movements also typically impact our transportation and delivery costs.

Volume based pricing. We generally procure chemicals and plastics raw materials through purchase orders rather than under long-term contracts with firm commitments. Our arrangements with key producers and suppliers are typically embodied in agreements that we refer to as framework supply agreements. We work to develop strong relationships with a select group of producers and suppliers that complement our strategy based on a number of factors, including price, breadth of product offering, quality, market recognition, delivery terms and schedules, continuity of supply and each producer’s strategic positioning. Our framework supply agreements with producers and suppliers typically renew annually and, while they generally do not provide for specific product pricing, some, primarily those related to our Chemicals line of business, include volume-based financial incentives through supplier rebates, which we earn by meeting or exceeding target purchase volumes.

Inflation. Our average selling prices generally rise in inflationary price environments as producers and suppliers raise the market prices of the products that we distribute. During inflationary periods our customers maximize the amount of inventory they carry in anticipation of even higher prices. Consequently, this environment of excess demand favorably impacts our volumes sold, revenues and gross profit due to the lag between rising prices and our cost of goods sold. The reverse is true in deflationary price environments. Deflationary forces create an environment of overcapacity, driving market prices of products downward, and we must quickly adjust inventories and buying patterns to respond to price declines. Our primary objective is to replace inventories at lower costs while maintaining or enhancing unit profitability.

Table of Contents

Some of our assets and liabilities, primarily cash, receivables, inventories and accounts payable, are impacted by commodity price inflation because they are indirectly affected by market prices of raw materials for our products. However, to the extent that we are able to manage our working capital in periods of changing prices, the overall impact of inflation on our net working capital is generally not significant.

Currency exchange rate fluctuations. We conduct our business on an international basis in multiple currencies. A portion of our sales and costs of sales are denominated in currencies other than the functional currency of our subsidiaries. Strengthening of our subsidiaries’ functional currency relative to the other currencies in which some transactions are denominated creates a negative impact on sales, but a positive impact on costs. Additionally, because we report our consolidated results in USD, the results of operations and the financial position of our local international operations, which are generally reported in the relevant local currencies, are translated into USD at the applicable exchange rates for inclusion in our condensed consolidated financial statements. Strengthening of the USD relative to our subsidiaries’ functional currencies causes a negative impact on sales but a positive impact on costs.

Outlook

General. We have operations in North America, EMEA and Asia. As a result, our business is subject to broad, global and regional macroeconomic factors. These factors include:

the general state of the economy, specifically inflationary or deflationary trends, GDP growth rates and commodity/feedstock price movements;

unemployment levels;

government regulation and changes in governments;

fiscal and monetary policies of governments, including import and export tariffs, duties and other taxes;

general income growth and the consumption rates of products; and

rates of technological change in the industries we serve.

We monitor these factors routinely for both strategic and operational impacts.

Our operations are most impacted by regional market price fluctuations of the primary feedstock materials, including crude oil and natural gas, and the downstream derivatives of these primary raw materials. Market price fluctuations of these primary raw materials directly impact the decisions of our product suppliers, specifically the manufacturing capacity made available for production of the products we distribute. As capacity or demand patterns change, we may experience a corresponding change in the average selling prices of the products we distribute.

The global markets stabilized during the first quarter of our fiscal year 2017 and have begun to show some growth in the second quarter of our fiscal year 2017 as shown by the increase in U.S. Industrial Production index, increase in oil prices and GDP.

Table of Contents

The following is a summary of GDP, oil price and U.S. Industrial Production Index fluctuations in our various regions of operations by fiscal quarter.



	Q2 17 v Q2 16		Q1 17 v Q1 16		Q4 16 v Q4 15		Q3 16 v Q3 15
North America
U.S. GDP Growth	1.9	%	2.0	%	1.7	%	1.3	%
U.S. Industrial Production Index	0.6	%	(0.1	)%	(1.2	)%	(1.3	)%
West Texas Intermediate Crude Oil Average Price Increase (Decrease)	54.0	%	16.9	%	(3.4	)%	(21.2	)%
EMEA
Euro Area GDP Growth	1.7	%	1.8	%	1.8	%	1.6	%
Brent Crude Oil Average Price Increase (Decrease)	55.1	%	14.3	%	(8.4	)%	(25.9	)%
Asia
China GDP Growth ⁽¹⁾	6.9	%	6.7	%	6.7	%	6.7	%

⁽¹⁾ As reported by the Chinese government.

Overall GDP growth has increased in many of the countries in which we operate. As a result we have shown an increase in volumes throughout all segments. In terms of currency, the USD has continued to strengthen over the prior comparable period against most other currencies in which we transact. As a result of ~~certain~~these factors, ~~detailed~~reported dollar revenues and gross profit have been negatively impacted in many of our ~~filings~~regional operations.

North America

The North American economic environment began to improve during the second quarter of fiscal year 2017. U.S. GDP has increased in the second fiscal quarter of 2017 as compared to second fiscal quarter of 2016, and the inflation rate has increased to 2.4% for the second fiscal quarter of 2017, driven in part by energy prices, specifically a rise in gasoline prices.

In terms of currency, the CAD strengthened when compared against the USD in the second fiscal quarter of 2017 following slight declines during the fiscal year ended September 30, 2016. The Peso weakened in value against the USD in the first half of fiscal year 2017, although the impact associated with this weakening has not been material to our results of operations.

EMEA

In Europe, we conduct business primarily in the Western European countries. Economic growth in Europe is expected to pick up through 2018 as the global recovery is expected to gain momentum. Overall GDP growth remains slow, however, with many Western European nations experiencing growth below 3.0%.

In terms of currency, the euro and the majority of other European currencies weakened versus the USD in the first half of fiscal year 2017 following declines during fiscal year 2016, which affected among other items, the reported dollar revenues and gross profit from our European operations.

The market prices for the products we sell in Europe are typically correlated to the cost of Brent Crude as these operations are primarily based on the distribution of commodity plastics products and most products are sourced in Europe. Consistent with the ~~Securities~~increase in oil prices during the first half of fiscal year 2017, we have begun to see an increase in pricing.

Asia

Our operations in Asia are concentrated mainly in China. Recent GDP growth in China, as reported by the Chinese government, has increased slightly, primarily due to a rise in industrial output, retail sales and ~~Exchange Commission (“SEC”). All subsequent written or oral forward-looking statements attributable~~fixed-asset investment with an increase in fiscal spending.

In terms of currency, the RMB continued to ~~us or persons acting on~~decline against the ~~Company’s behalf are qualified~~USD during the first half of fiscal year 2017 following declines during fiscal year 2016, which affected, among other items, the reported dollar revenues and gross profit from our operations in ~~their entirety by this paragraph.~~

~~Overview~~

~~We are a blank check company incorporated on March 24, 2014~~China.

Table of Contents

Certain Factors Affecting Comparability to Prior Period Financial Results

Prior to the Business Combination, WLRH operated as a ~~Delaware corporation and~~special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses ~~(“Business Combination”). We intend to effectuate a~~or assets. After the Business Combination ~~using cash from the proceeds~~our results of ~~a public offering (the “Public Offering”) and the private placement~~operations are not directly comparable to historical results of the ~~private placement warrants that occurred simultaneously~~operations for the periods presented, primarily because:

In connection with the ~~completion of~~Business Combination, certain assets and liabilities had fair value adjustments applied to the ~~Public Offering (the “Private Placement Warrants”), our capital stock, debt or a combination of cash, stock and debt.~~

~~As indicated in the accompanying~~Predecessor’s condensed consolidated financial statements as of March 31, 2016 and December 31, 2015, we had $187 and $10,000, respectively, in cash held outside of our trust account (“Trust Account”) maintained by Continental Stock Transfer & Trust Company, acting as trustee, and deferred offering costs of approximately $18,309,150. Further, we expect to continue to incur significant costs inon the ~~pursuit of our acquisition plans. We cannot assure you that our plans to complete an initial Business Combination will be successful.~~

As more fully described below in the section entitled “Proposed Nexeo Business Combination”, on March 21, 2016 we entered into the Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Neon Acquisition Company LLC, Neon Holding Company LLC, Nexeo Solutions Holdings, LLC (“Nexeo”), Nexeo Holdco LLC (“New Holdco”) and TPG Accolade Delaware, L.P. to acquire Nexeo, a large global chemical and plastics distributor which provides broad logistics capabilities, in-depth market knowledge, dedicated technical expertise and environmental services. With operations worldwide, Nexeo has approximately 2,450 employees, connects a network of over 1,300 suppliers with a diverse base of more than 27,500 customers and offers over 23,000 products used in a broad cross-section of industries, including chemicals manufacturing, oil and gas, paints and coatings, automotive, healthcare and personal care (the “Proposed Nexeo Business Combination”). Pursuant to the provisions of our amended and restated certificate of incorporation, we currently have until June 11, 2016 to complete a Business Combination. However,Closing Date, most notably:


◦	Intangible assets;


◦	Plant, property and equipment;


◦	Goodwill; and


◦	Taxes

Further, in connection with the ~~Proposed Nexeo~~ Business Combination, we ~~are currently~~have recognized certain contingent liabilities. See Note 3 to our condensed consolidated financial statements.

As a result of the factors listed above, historical results of operations and other financial data, as well as period-to-period comparisons of these results, may not be comparable or indicative of future operating results or future financial condition.

Table of Contents

Results of Operations

Three Months Ended March 31, 2017 (Successor) compared with Three Months Ended March 31, 2016 (Predecessor)

The Successor and Predecessor periods include operating results for the full three months ended March 31, 2017 and March 31, 2016, respectively.



	Successor			Predecessor								Percentage of Sales and Operating Revenues For the
	Three Months Ended March 31,			Three Months Ended March 31,			Period Over Period Favorable (Unfavorable)					Three Months Ended March 31,
(in millions)	2017			2016			$ Change			% Change		2017		2016
Sales and operating revenues
Chemicals	$	415.0		$	389.0		$	26.0		6.7	%	45.2	%	45.1	%
Plastics	471.7			443.9			27.8			6.3	%	51.4	%	51.5	%
Other	31.0			29.3			1.7			5.8	%	3.4	%	3.4	%
Total sales and operating revenues	$	917.7		$	862.2		$	55.5		6.4	%	100.0	%	100.0	%

Gross profit
Chemicals	$	50.6		$	50.1		$	0.5		1.0	%	12.2	%	12.9	%
Plastics	45.8			44.8			1.0			2.2	%	9.7	%	10.1	%
Other	5.8			6.4			(0.6		)	(9.4	)%	18.7	%	21.8	%
Total gross profit	$	102.2		$	101.3		$	0.9		0.9	%	11.1	%	11.7	%

Selling, general and administrative expenses	$	80.0		$	76.7		$	(3.3	)	(4.3	)%	8.7	%	8.9	%
Transaction related costs	0.3			6.3			6.0			95.2	%	—	%	0.7	%
Change in fair value of contingent consideration obligations	10.0			—			(10.0		)	*		1.1	%	—	%
Operating income	11.9			18.3			(6.4		)	(35.0	)%	1.3	%	2.1	%
Other income	0.2			0.9			(0.7		)	(77.8	)%	—	%	0.1	%
Interest expense, net	(12.4		)	(15.4		)	3.0			19.5	%	(1.4	)%	(1.8	)%
Income (loss) before income taxes	(0.3		)	3.8			(4.1		)	(107.9	)%	—	%	0.4	%
Income tax expense	0.8			1.8			1.0			55.6	%	0.1	%	0.2	%
Net income (loss) from continuing operations	(1.1		)	2.0			(3.1		)	(155.0	)%	(0.1	)%	0.2	%
Net income from discontinued operations, net of tax	—			0.1			(0.1		)	*		—	%	*
Net income (loss)	$	(1.1	)	$	2.1		$	(3.2	)	(152.4	)%	(0.1	)%	0.2	%

* Not meaningful

Sales and operating revenues

Sales and operating revenues for the three months ended March 31, 2017 increased $55.5 million, or 6.4%, as compared to the three months ended March 31, 2016. The increase in revenues was primarily attributable to an increase in volumes across all segments of 4.0% due to increased demand through all geographic regions, except Asia, and an increase in overall average selling prices of 2.3% resulting from the inflationary price environment. The revenue increase was partially offset by a decline of $5.2 million as a result of the weakening of the exchange rates of various currencies versus the USD as compared to the same period in the ~~process~~prior fiscal year.

Table of ~~seeking stockholder approval~~Contents

Chemicals

Sales and operating revenues for the Chemicals line of business for the three months ended March 31, 2017 increased $26.0 million, or 6.7%, as compared to ~~extend~~ the ~~time~~three months ended March 31, 2016. The revenue increase was primarily attributable to a 6.4% increase in average selling prices across multiple product lines as a result of the inflationary price environment. Sales volumes remained steady through North America and decreased in Asia.

Plastics

Sales and operating revenues for the Plastics line of business for the three months ended March 31, 2017 increased $27.8 million, or 6.3%, as compared to the three months ended March 31, 2016. The revenue increase was primarily attributable to an 8.6% increase in volumes across all of our operating regions as a result of increased demand in North America and market expansion in EMEA and was partially offset by a 2.1% decrease in overall average selling prices as well as a decrease of $5.4 million as a result of the weakening of the exchange rates of various currencies versus the USD compared to the same period in the prior fiscal year. Revenues continued to be affected in North America due to a supplier disruption which resulted in limited availability to us of certain products we ~~have~~distribute on a regular basis.

Other

Sales and operating revenues for the Other segment for the three months ended March 31, 2017 increased $1.7 million, or 5.8%, as compared to ~~complete~~the three months ended March 31, 2016. The increase in revenues was primarily due to price increases during the current quarter.

Gross profit

Gross profit increased $0.9 million, or 0.9%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. The increase in gross profit was primarily due to higher average selling prices and volumes as previously mentioned. Gross profit as a percentage of sales for the three months ended March 31, 2017 was 11.1% as compared to 11.7% for the three months ended March 31, 2016. The decrease was driven by the additional depreciation expense of approximately $1.8 million during the period primarily due to the step up in fair value of the property, plant and equipment as a result of the Business Combination ~~until August 20,~~and the impact of the weakening of exchange rates of various currencies versus the USD of approximately $0.4 million as compared to the same period in the prior fiscal year.

Chemicals

Gross profit increased $0.5 million, or 1.0%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. Gross profit as a percentage of sales for the Chemicals line of business for the three months ended March 31, 2017 was 12.2% as compared to 12.9% for the three months ended March 31, 2016. The decrease was driven by additional depreciation expense of approximately $1.3 million during the current period primarily due to the step up in fair value of property, plant and equipment as a result of the Business Combination.

Plastics

Gross profit increased $1.0 million, or 2.2%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. Gross profit as a percentage of sales for the Plastics line of business for the three months ended March 31, 2017 was 9.7% as compared to 10.1% for the three months ended March 31, 2016. The decrease was driven by the impact of the weakening of the exchange rates of various currencies versus the USD of $0.4 million as compared to the same period in the prior fiscal year. There was also additional depreciation expense of approximately $0.5 million during the current period affecting gross profit due to the step up in fair value of the property, plant and equipment as a result of the Business Combination. Finally, a portion of the decrease was driven by a supplier disruption in North America resulting in limited availability to us of certain products we distribute on a regular basis.

Other

Gross profit declined $0.6 million, or 9.4%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. Gross profit as a percentage of sales for the Other segment for the three months ended March 31, 2017 was 18.7% as compared to 21.8% for the three months ended March 31, 2016. The decrease in gross profit was primarily due to a shift in service mix toward on-site services during the period as compared to the same period in the prior fiscal year.

Table of Contents

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended March 31, 2017 increased $3.3 million, or 4.3%, as compared to the three months ended March 31, 2016. This increase was primarily driven by higher depreciation and amortization expense of $1.7 million mainly as a result of the Business Combination. Employee costs increased by $0.3 million primarily as a result of increased stock-based compensation cost. In addition, foreign exchange losses increased by approximately $1.2 million, driven primarily by fluctuations in the Euro to the USD and were partially offset by fluctuations in the RMB compared to the USD. Further, travel, insurance, and marketing costs increased approximately $0.8 million from the prior year quarter, but were partially offset by lower consulting costs of $0.5 million.

Transaction related costs

We incurred transaction related costs of $0.3 million and $6.3 million in the three months ended March 31, 2017 and 2016, ~~(the “Extension”). If~~respectively, related primarily to the ~~Extension is approved by stockholders, we will file an amendment~~Business Combination.

Changes in fair value of contingent consideration

We incurred a loss of $10.0 million in the three months ended March 31, 2017 related to the contingent consideration associated with the Deferred Cash Consideration and TRA. See Notes 3 and 9 to our ~~amended~~condensed consolidated financial statements.

Other income

Other income for the three months ended March 31, 2017 was $0.2 million and ~~restated certificate~~was primarily due to the gain related to reimbursements received for certain capital expenditures incurred in connection with the relocation of ~~incorporation providing~~certain operations. See Note 5 to our condensed consolidated financial statements. Other income for ~~such additional time to complete a Business Combination.~~

~~Results of Operations~~

~~For~~ the three months ended March 31, 2016 was $0.9 million and ~~2015, we had net losses~~was primarily due to a gain of ~~$1,502,309~~$0.6 million on the repurchase of $9.5 million of Notes and ~~$126,615, respectively. Our entire activity since our Public Offering has been limited~~due to ~~identifying and evaluating prospective acquisition targets for an initial Business Combination.~~

~~Liquidity and Capital Resources~~

~~Prior to our Public Offering,~~a gain of $0.1 million on March 24, 2014, WL Ross Sponsor LLC, a Delaware limited liability company (our “Sponsor”) purchased an aggregate of 14,375,000 shares of common stock (the “Founder Shares”) for an aggregate purchase price of $25,000, or approximately $0.002 per share. Immediately prior to the pricing of the Public Offering, on June 5, 2014, our Sponsor forfeited 1,868,750 Founder Shares so that the remaining 12,506,250 Founder Shares represented 20.0% of the outstanding shares upon completion of the Public Offering. On June 11, 2014, we consummated the Public Offering of 50,025,000 units (which includes the full exercise of the underwriters’ over-allotment option) at a price of $10.00 per unit generating gross proceeds of $500,250,000 before underwriting discounts and expenses. Simultaneously with the commencement of the Public Offering, on June 5, 2014, we consummated the private sale of an aggregate of 22,400,000 Private Placement Warrants, each exercisable to purchase one-half of one share of our common stock at $5.75 per half share, to our Sponsor, at a price of $0.50 per Private Placement Warrant, generating proceeds, before expenses, of $11,200,000. We received net proceeds from the Public Offering and the sale of old private fleet tractors that were replaced with tractors under the ~~Private Placement Warrants of approximately $501,345,400,~~Ryder Lease.

Interest expense, net

Interest expense, net for the three months ended March 31, 2017 was $12.4 million related to the Credit Facilities, along with the amortization of the ~~non-deferred portion of~~costs associated with issuing the underwriting commissions of $9,204,600 and offering costs and other expenses of approximately $900,000. The amount of proceeds not deposited in our Trust Account was $1,095,400 at closing of the Public Offering. In addition, interest income on the funds held in our Trust Account may be released to us to pay our franchise and income tax obligations. For a description of the proceeds generated in the Public Offering and a discussion of the use of such proceeds, we refer you to Note 3 of the financial statements included in Part I, Item 1 of this Report.

As of March 31, 2016, investment securities in our Trust Account consisted of $312,597,363 invested in U.S. government treasury bills with a maturity of 49 days or less, and $188,426,332 in a money market fund. As of December 31, 2015, investment securities in our Trust Account consisted of $499,848,764 invested in U.S. government treasury bills with a maturity of 140 days or less and $799,033 in a money market fund.

~~On March 26, 2015, we issued a convertible promissory note (the “Convertible Note”) to our Sponsor that provides~~debt. Interest expense, net for our Sponsor to loan us up to $300,000 for ongoing expenses. The Convertible Note is interest bearing at 5% per annum and is due and payable on June 11, 2016. At the option of our Sponsor, any amounts outstanding under the Convertible Note may be converted into warrants to purchase shares of our common stock at a conversion price of $0.60 per warrant. Each warrant will entitle our Sponsor to purchase one-half of one share of our common stock at an exercise price of $5.75 per half share ($11.50 per whole share). Each warrant will contain other terms identical to the terms contained in the Private Placement Warrants previously issued to our Sponsor. On April 16, 2015 we borrowed the total proceeds of $300,000 from the Convertible Note entered with our Sponsor. For the three months ended March 31, 2016 was $15.4 million primarily related to the ~~Company incurred $3,830~~Predecessor Credit Facilities and the Notes, along with the amortization of the costs associated with issuing the debt. The decrease in interest expense ~~which under~~in the ~~terms~~current period was primarily due to the redemption of the ~~Convertible Note has been added to~~Notes in connection with the ~~principal amount. As of~~Business Combination.

Income tax expense

Income tax expense for the three months ended March 31, ~~2016, the outstanding balance of the Convertible Note~~2017 was ~~$314,474. As of December 31, 2015, the outstanding balance of the Convertible Note was $310,644.~~

On January 5, 2016, we issued a convertible promissory note (the “Second Convertible Note”) to our Sponsor that provides for our Sponsor to loan us up to $425,000 for ongoing expenses. The Second Convertible Note is interest bearing at 5% per annum$0.8 million and is ~~due~~primarily attributable to profitable foreign jurisdictions. Successor and ~~payable on June 11, 2016. At~~Predecessor income taxes are generally not comparable as the ~~option of our Sponsor, any amounts outstanding under the Second Convertible Note may be converted into warrants to purchase shares of Common Stock at~~Predecessor was organized as a conversion price of $0.50 per warrant. Each warrant will entitle our Sponsor to purchase one-half of one share of Common Stock at an exercise price of $5.75 per half share ($11.50 per whole share). Each warrant will contain other terms identical to the terms contained in the Private Placement Warrants. On January 5, 2016, we borrowed the total proceeds of $425,000 from the Second Convertible Note entered with our Sponsor. Forlimited liability company and taxed as a partnership for U.S. income tax purposes. Predecessor income tax expense for the three months ended March 31, 2016 was $1.8 million due to profitable foreign jurisdictions and certain U.S. Federal, state and local jurisdictions.

Table of Contents

Six Months Ended March 31, 2017 (Successor) compared with Six Months Ended March 31, 2016 (Predecessor)



	Successor			Predecessor								Percentage of Sales and Operating Revenues For the
	Six Months Ended March 31,			Six Months Ended March 31,			Period Over Period Favorable (Unfavorable)					Six Months Ended, March 31
(in millions)	2017			2016			$ Change			% Change		2017		2016
Sales and operating revenues
Chemicals	$	767.4		$	767.7		$	(0.3	)	—	%	44.8	%	45.5	%
Plastics	884.2			862.4			21.8			2.5	%	51.6	%	51.0	%
Other	60.9			59.8			1.1			1.8	%	3.6	%	3.5	%
Total sales and operating revenues	$	1,712.5		$	1,689.9		$	22.6		1.3	%	100.0	%	100.0	%

Gross profit
Chemicals	$	93.3		$	97.4		$	(4.1	)	(4.2	)%	12.2	%	12.7	%
Plastics	81.8			85.4			(3.6		)	(4.2	)%	9.3	%	9.9	%
Other	11.5			13.7			(2.2		)	(16.1	)%	18.9	%	22.9	%
Total gross profit	186.6			$	196.5		$	(9.9	)	(5.0	)%	10.9	%	11.6	%

Selling, general and administrative expenses	154.5			151.4			(3.1		)	(2.0	)%	9.0	%	9.0	%
Transaction related costs	1.1			7.3			6.2			84.9	%	0.1	%	0.4	%
Change in fair value of contingent consideration obligations	20.6			—			(20.6		)	*		1.2	%	*
Operating income	10.4			37.8			(27.4		)	(72.5	)%	0.6	%	2.2	%
Other income	2.6			2.6			—			—	%	0.2	%	0.2	%
Net interest expense	(24.3		)	(31.0		)	6.7			21.6	%	(1.4	)%	(1.8	)%
Income (loss) before income taxes	(11.3		)	9.4			(20.7		)	(220.2	)%	(0.7	)%	0.6	%
Income tax expense (benefit)	(1.9		)	3.1			5.0			161.3	%	(0.1	)%	0.2	%
Net income (loss) from continuing operations	(9.4		)	6.3			(15.7		)	(249.2	)%	(0.5	)%	0.4	%
Net income from discontinued operations, net of tax	—			0.1			(0.1		)	*		—	%	*
Net income (loss)	$	(9.4	)	$	6.4		$	(15.8	)	(246.9	)%	(0.5	)%	0.4	%

* Not meaningful

Sales and operating revenues

Sales and operating revenues for the ~~Company~~six months ended March 31, 2017 increased $22.6 million, or 1.3%, as compared to the six months ended March 31, 2016. The increase in revenues was primarily attributable to increased total volume of 2.2%, driven by volume increase in the Plastics line of business, slightly offset by volume decrease in the Chemicals line of business. Overall average selling prices were down slightly, primarily in the Plastics line of business. This was partially offset by a decrease of $11.9 million from the weakening of the exchange rates of various currencies versus the USD as compared to the same period in the prior fiscal year.

Chemicals

Sales and operating revenues for the Chemicals line of business for the six months ended March 31, 2017 were flat as compared to the six months ended March 31, 2016. This was primarily due to a slight decrease in volumes offset by a slight increase in average selling prices across multiple product lines.

Table of Contents

Plastics

Sales and operating revenues for the Plastics line of business for the six months ended March 31, 2017 increased $21.8 million, or 2.5%, as compared to the six months ended March 31, 2016. The revenue increase was primarily attributable to a 6.3% increase in volumes across all of our operating regions, offset by a decrease in average selling prices of 3.5%. Revenues continued to be affected in North America due to a supplier disruption which resulted in limited availability to us of certain products we distribute on a regular basis. Additionally, revenue decreased $11.5 million from the weakening of the exchange rates of various currencies versus the USD compared to the same period in the prior fiscal year.

Other

Sales and operating revenues for the Other segment for the six months ended March 31, 2017 increased $1.1 million, or 1.8%, as compared to the six months ended March 31, 2016. The increase in revenues was primarily due to price increases during the second quarter of fiscal year 2017.

Gross profit

Gross profit declined $9.9 million, or 5.0%, for the six months ended March 31, 2017 as compared to the six months ended March 31, 2016. The decrease in gross profit was primarily due to lower average selling prices primarily in the Plastics line of business combined with the inflationary pricing for inputs. Gross profit as a percentage of sales for the six months ended March 31, 2017 was 10.9% as compared to 11.6% for the six months ended March 31, 2016. This decrease was driven by a decrease of $1.0 million, attributable to the weakening of the exchange rates of various currencies versus the USD as compared to the same period in the prior fiscal year, as well as an increase in depreciation expense of $3.6 million during the current period primarily due to the step up in fair value of the property, plant and equipment as a result of the Business Combination.

Chemicals

Gross profit declined $4.1 million, or 4.2%, for the six months ended March 31, 2017 as compared to the six months ended March 31, 2016. Gross profit as a percentage of sales for the Chemicals line of business for the six months ended March 31, 2017 was 12.2% as compared to 12.7% for the six months ended March 31, 2016. The decrease in gross profit was primarily attributable to the slight decline in volumes partially offset by a slight increase in average selling prices during the current period. Furthermore, there was an increase in depreciation expense of approximately $2.6 million during the current period from the step up in fair value of property, plant and equipment as a result of the Business Combination. The decrease in gross profit was partially mitigated by product mix favorability, pricing initiatives and supply chain efficiencies.

Plastics

Gross profit declined $3.6 million, or 4.2%, for the six months ended March 31, 2017 as compared to the six months ended March 31, 2016. Gross profit as a percentage of sales for the Plastics line of business for the six months ended March 31, 2017 was 9.3% as compared to 9.9% for the six months ended March 31, 2016. The decrease was primarily attributable to pricing compression and the impact of the weakening of the exchange rates of various currencies versus the USD of $0.9 million as compared to the same period in the prior fiscal year. Additionally, a portion of the decrease was attributable to a supplier disruption in North America that has resulted in limited availability to us of certain products we distribute on a regular basis. Furthermore, there was an increase in depreciation expense of approximately $1.0 million during the current period due to the step up in fair value of property, plant and equipment as a result of the Business Combination. The decrease in gross profit was partially mitigated by pricing initiatives and supply chain efficiencies.

Other

Gross profit declined $2.2 million, or 16.1%, for the six months ended March 31, 2017 as compared to the six months ended March 31, 2016. Gross profit as a percentage of sales for the Other segment for the six months ended March 31, 2017 was 18.9% as compared to 22.9% for the six months ended March 31, 2016. The decrease was primarily due to a highly competitive marketplace during the first quarter of fiscal year 2017 and a shift in service mix toward on-site services during the period as compared to the same period in the prior fiscal year.

Table of Contents

Selling, general and administrative expenses

Selling, general and administrative expenses for the six months ended March 31, 2017 increased $3.1 million, or 2.0%, as compared to the six months ended March 31, 2016. This increase was primarily driven by higher depreciation and amortization expense of $2.7 million mainly as a result of the Business Combination. Employee costs increased by $0.3 million primarily as a result of increased stock-based compensation expense. In addition, foreign exchange losses increased by approximately $1.4 million, primarily due to fluctuations in the RMB, Euro and Peso to the USD. These increases were partially offset by lower consulting costs of $1.1 million and lower travel and entertainment costs of $0.3 million. Selling, general and administrative expenses for the six months ended March 31, 2017 included certain reorganization expenses of approximately $1.7 million.

Transaction related costs

We incurred ~~$5,240~~transaction related costs of $1.1 million and $7.3 million in the six months ended March 31, 2017 and 2016, respectively, primarily related to the Business Combination.

Changes in fair value of contingent consideration

We incurred a loss of $20.6 million in the six months ended March 31, 2017 related to the contingent consideration associated with the Deferred Cash Consideration and TRA. See Notes 3 and 9 to our condensed consolidated financial statements.

Other income

Other income for the six months ended March 31, 2017 was $2.6 million and was primarily due to the gain related to reimbursements received for certain capital expenditures incurred in connection with the relocation of certain operations. See Note 5 to our condensed consolidated financial statements. Other income for the six months ended March 31, 2016 was $2.6 million and was primarily due to a gain of $1.8 million on the sale of old private fleet tractors that were replaced with tractors under the Ryder Lease, and a gain of $0.6 million on the repurchase of $9.5 million of the Notes.

Interest expense, net

Interest expense, net for the six months ended March 31, 2017 was $24.3 million related to the Credit Facilities, along with the amortization of the costs associated with issuing the debt. Interest expense, net for the six months ended March 31, 2016 was $31.0 million primarily related to the Predecessor Credit Facilities and the Notes, along with the amortization of the costs associated with issuing the debt. The decrease in interest expense ~~which~~in the current period was primarily due to the redemption of the Notes in connection with the Business Combination.

Income tax expense

Income tax benefit for the six months ended March 31, 2017 was $1.9 million and is primarily attributable to U.S. operations related to deferred tax positions. Successor and Predecessor income taxes are generally not comparable as the Predecessor was organized as a limited liability company and taxed as a partnership for U.S. income tax purposes. Predecessor income tax expense for the six months ended March 31, 2016 was $3.1 million due to higher profitability of our EMEA operations as well as an increase in tax expense for Sub Holding.

Table of Contents

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash flows generated from our operations and our borrowing availability under the ~~terms~~ABL Facility. Cash flows generated from our operations are influenced by seasonal patterns of our business and other timing circumstances that can result in increases or decreases in working capital requirements for any given period during the course of our fiscal year. Our ability to generate sufficient cash flows from our operating activities will continue to be primarily dependent on purchasing and distributing chemical and plastic materials. Additionally, our ability to generate cash flows in the normal course of business can be significantly influenced by changing global and regional macroeconomic conditions. Borrowing availability under the ABL Facility is subject to a borrowing base generally comprised of eligible inventory, accounts receivable and cash and cash equivalents held in certain accounts and certain of its subsidiaries. Our availability under the ABL Facility is, therefore, potentially subject to fluctuations, depending on the value of the ~~Convertible Note has been added~~eligible assets in the borrowing base on a given valuation date. An inability to borrow under the ABL Facility may adversely affect our liquidity, results of operations and financial condition.

Our operating cash requirements consist principally of inventory purchases, trade credit extended to customers, labor, occupancy costs and transportation and delivery costs. Non-operating cash requirements include debt service requirements, acquisition-related costs and capital expenditures.

Capital Expenditures

Cash capital expenditures for the six months ended March 31, 2017 were $14.5 million and related primarily to facility improvements and additional information technology investments. We expect our aggregate capital expenditures for fiscal year 2017 (excluding acquisitions and assets acquired via capital leases) to be approximately $25.0-$30.0 million. These expenditures are expected to be primarily related to fixed asset replacements, improvements to our information technology infrastructure and additions of equipment and vehicles.

We are a party to the ~~principal amount.~~ Montgomery Lease. The Montgomery Lease has a term of 15 years, with annual payments beginning at $1.1 million per year. The Montgomery Lease is accounted for as a capital lease and began in the first quarter of fiscal year 2017 with an initial cost and capital lease obligation of $13.2 million. Our total capital lease obligations balance was $36.8 million as of March 31, 2017 and is primarily associated with the Ryder Lease and the Montgomery Lease. See Note 7 to our condensed consolidated financial statements.

Credit Facilities

ABL Facility

The ABL Facility provides for committed revolving credit financing including a U.S. Tranche of up to $505.0 million, a Canadian Tranche of up to the USD equivalent of $40.0 million, and a FILO Tranche up to $30.0 million. The ABL Facility matures on June 9, 2021. Provided no default or event of default then exists or would arise therefrom, the ABL Borrowers have the option, at the beginning of each quarter, to request that the ABL Facility be increased by an aggregate amount, when included with any incremental borrowings issued under the Term Loan Facility, not to exceed $175.0 million.

Obligations under the ABL Facility are secured by a first priority lien on all ABL first lien collateral, including certain eligible inventory and accounts receivable, and a second priority lien on all Term Loan first lien collateral including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, in each case, subject to certain limitations; provided, that no ABL Facility first lien collateral or Term Loan Facility first lien collateral owned by the Canadian Borrower secure the obligations owing under the U.S. tranche of the ABL Facility.

The ABL Facility includes a letter of credit sub-facility, which permits up to $200.0 million of letters of credit under the U.S. Tranche (which may be denominated in USD, euros or other currencies approved by the administrative agent and the issuing bank) and up to the USD equivalent of $10.0 million of letters of credit under the Canadian Tranche (which may be denominated in CAD only). The ABL Facility also contains a FILO Tranche which can be used by any non-Canadian foreign subsidiary for loans or letters of credit up to an aggregate amount not to exceed $30.0 million

Table of Contents

At March 31, 2017, we had $214.4 million in borrowings outstanding under the ABL Facility. Outstanding borrowings on the ABL Facility included approximately $58.0 million drawn in anticipation of the closing of the Ultra Chem Acquisition on April 3, 2017. Interest expense related to the ABL Facility, excluding amortization of debt issuance costs, was $1.5 million and $2.8 million for the three and six months ended March 31, 2017, respectively.

As of March 31, ~~2016,~~2017, we were in compliance with the ~~outstanding balance~~covenants of the ~~Convertible Note was $430,240.~~

ABL Facility.

Term Loan Facility

The Term Loan Facility provides secured debt financing in an aggregate principal amount of up to $655.0 million and the right, at our option, to request additional tranches of term loans in an aggregate principal amount, when included with any incremental borrowings issued under the ABL Facility, amount up to $175.0 million, plus unlimited additional amounts such that the aggregate principal amount of indebtedness outstanding at the time of incurrence does not cause the consolidated Secured Net Leverage Ratio, calculated on a pro forma basis, to exceed 4.1 to 1.0. Availability of such additional tranches of term loans are subject to the absence of any default, and among other things, the receipt of commitments by existing or additional financial institutions.

On March ~~31, 2016, we issued~~22, 2017, the Company completed TLB Amendment No. 1 amending the current Term Loan Facility. TLB Amendment No. 1 reduced the interest rate margin applicable to outstanding term loans by 50 basis points from 4.25% to 3.75% for LIBOR loans and from 3.25% to 2.75% for base rate loans. In addition, the 1% LIBOR floor was eliminated. TLB Amendment No.1 provides a ~~promissory note (the “March 2016 Note”)~~prepayment premium equal to ~~our Sponsor pursuant to which we may borrow up to $750,000. The March 2016 Note is interest bearing at 5% per annum and is due and payable on the first to occur of (1) the consummation~~1% of the ~~Proposed Nexeo Business Combination~~amount of the term loan applicable to certain repricing transactions occurring on or ~~(2) June 11, 2016 (or such later~~prior to six months from the effective date of TLB Amendment No. 1. TLB Amendment No. 1 will result in an estimated $3.3 million reduction to the Company’s annual cash interest expense for each of the next six years, while all other terms of the Term Loan Facility remain unchanged. There were no changes to the total or ~~such later date~~secured leverage ratios.

At March 31, 2017, we had $650.1 million in borrowings outstanding under the Term Loan Facility. We are required to make mandatory principal payments on an annual basis, commencing with the fiscal year ending September 30, 2017, if cash flows for the year, as ~~may be approved by our stockholders by amendment~~defined in the agreement, exceed certain levels specified in the agreement. Interest expense related to the Term Loan Facility, excluding original issue discount amortization and amortization of ~~our charter to complete an initial Business Combination).~~ debt issuance costs, was $8.5 million and $17.3 million for the three and six months ended March 31, 2017, respectively.

As of March 31, ~~2016,~~2017, we were in compliance with the ~~outstanding balance~~covenants of the Term Loan Facility.

Liquidity

The following table summarizes our liquidity position as of March 31, 2017 and September 30, 2016:



	March 31, 2017		September 30, 2016
Cash and cash equivalents	$	95.3	$	47.5
ABL Facility availability	196.2		273.8
Total liquidity	$	291.5	$	321.3

Cash and Cash Equivalents

At March 31, 2017, we had $95.3 million in cash and cash equivalents of which $30.4 million was held by foreign subsidiaries, $25.6 million of which was denominated in currencies other than the USD, primarily in euros and RMB. At March 31, 2017, we had $4.9 million in China denominated in RMB. While the RMB is convertible into USD, foreign exchange transactions are subject to approvals from the SAFE. We do not anticipate any significant adverse impact to overall liquidity from potential limitations on the transfer or conversion of cash and cash equivalents.

Table of Contents

ABL Facility

Under the ABL Facility, if as of any date of determination when Trigger Event Excess Availability (as defined in the ABL Facility) is below certain thresholds or upon certain defaults, we will be required to deposit cash on a daily basis from certain depository accounts in a collection account maintained with the administrative agent, which will be used to repay outstanding loans and cash collateralized letters of credit. At March 31, 2017, Trigger Event Excess Availability under the ABL Facility was $196.2 million, which was $150.6 million in excess of the $45.6 million threshold that would trigger the foregoing requirements.

Based on current and anticipated levels of operations, capital spending projections and conditions in our markets, we believe that cash on hand, together with cash flows from operations and borrowings available under the ABL Facility, are adequate to meet our working capital and capital expenditure needs as well as any debt service and other cash requirements for at least twelve months.

In addition to operating and non-operating cash requirements previously described, our longer-term liquidity needs are primarily related to our final maturity debt payments due in 2021 and 2023. Depending on market conditions and other factors, we may also consider alternative financing options, including, but not limited to, issuance of equity, issuance of new debt or refinancing of our existing debt obligations.

Cash Flows

The following table sets forth the major categories of our cash flows for the six months ended March 31, 2017 for the Successor and the six months ended March 31, 2016 ~~Note~~for the Predecessor:



Major Categories of Cash Flows	Successor				Predecessor
(in millions)	Six Months Ended March 31, 2017				Six Months Ended March 31, 2016
Net cash provided by (used in) operating activities	$	(25.9	)	��	$	43.6
Net cash used in investing activities	(16.6		)		(7.4		)
Net cash provided by (used in) financing activities	91.0				(103.9		)
Effect of exchange rate changes on cash and cash equivalents	(0.7		)		(0.3		)
Increase (decrease) in cash and cash equivalents	47.8				(68.0		)
Cash and cash equivalents at the beginning of period	47.5				127.7
Cash and cash equivalents at the end of period	$	95.3			$	59.7

Six Months Ended March 31, 2017 (Successor) Compared to Six Months Ended March 31, 2016 (Predecessor)

Cash flows from operating activities

Net cash used in operating activities for the six months ended March 31, 2017 for the Successor was ~~$235,032, including $32~~$25.9 million. Net loss of $9.4 million, adjusted for the gain related to reimbursement for certain capital expenditures incurred in connection with the relocation of certain operations, the loss on sale of property, plant and equipment and significant non-cash items such as depreciation and amortization expenses, amortization of debt issuance costs, provision for bad debt, deferred income taxes, equity based compensation expense, and changes relating to contingent consideration liabilities collectively totaling $51.6 million, resulted in $42.2 million of cash inflow during the six months ended March 31, 2017. Additionally, cash flow was negatively impacted by an increase in accounts and notes receivable of $70.4 million and inventories of $23.7 million, partially offset by a $33.8 million increase in accounts payable. The increase in accounts and notes receivable was driven primarily by higher sales volumes and rising average selling prices experienced during the current period as well as timing of collections at period end. There were no significant changes in billing terms or collection processes during the current period. The increase in accounts payable was driven by higher volumes and purchase prices during the current period. Additionally, there was a decrease in accrued ~~interest.~~

Asexpenses and other liabilities of $10.6 million which included the payment of the annual employee incentive compensation, and a decrease in other current assets of $1.9 million. Other assets and liabilities contributed $0.9 million to net cash provided by operating activities.

Table of Contents

Net cash provided by operating activities for the six months ended March 31, 2016 for the Predecessor was $43.6 million. Net income of $6.3 million, adjusted for gains on sales of assets, gains on extinguishment of debt and significant non-cash items such as depreciation and amortization expenses, debt issuance costs, provision for bad debt, deferred income taxes, and equity-based compensation charges, collectively totaling $31.9 million, resulted in $38.2 million of cash inflow from continuing operations during the six months ended March 31, 2016. Additionally, cash flow from continuing operations was positively impacted by a decrease in accounts and notes receivable of $20.7 million, partially offset by a $3.7 million decrease in accounts payable. The decrease in accounts and notes receivable was driven primarily by lower sales volume and falling average selling prices experienced during the six months ended March 31, 2016 as well as timing of collections at period end. The decrease in accounts payable was driven by lower purchases due to lower sales volumes and pricing during the six months ended March 31, 2016. There were no significant changes in billing terms or collection processes during the six months ended March 31, 2016. There was a decrease in inventories of $6.3 million during the six months ended March 31, 2016, which reflected the impact of lower prices for inventory purchases as well as improved inventory management. Additionally, there was a decrease in accrued expenses and other liabilities of $10.7 million which included the payment of the annual employee incentive compensation, an increase in other current assets of $3.7 million due to the timing of certain prepaid expenses during the six months ended March 31, 2016 and ~~December 31, 2015, we had cash held outside of our Trust Account of $187 and $10,000, respectively, to fund our working capital requirements.~~

In addition, at March 31, 2016, we had current liabilities of $2,644,159 and negative working capital of $2,585,302 largely due to amounts owed to professionals, consultants, advisors and others who worked on seeking a Business Combination and the Proposed Nexeo Business Combination. Such work is continuing after March 31, 2016 and amounts are continuing to accrue. We expect to pay many of these costs upon consummation of the Business Combination. If the Business Combination were not consummated by June 11, 2016 (or such later datedecrease in case an Extension is approved), we would (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in our Trust Account, including interest (which interest shall be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Public Offering. Although our plan is to complete the Business Combination, there is no assurance that our plan can be accomplished. The uncertainty regarding the lack of resources to pay the above noted liabilities raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be unable to continue operations.

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

As more fully described below in the section entitled “Proposed Nexeo Business Combination”, we intend to raise additional funds through a private offering of debt and equity to consummate the Proposed Nexeo Business Combination.

~~Off-balance sheet financing arrangements~~

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

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or enter into any non-financial agreements involving assets.

~~Contractual obligations~~

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than an administrative agreement to pay an affiliate of our Sponsor a monthly fee of $10,000. This amount covers secretarial and administrative services provided to members of our management team by our Sponsor, members of our Sponsor, and our management team or their affiliates. Upon completion of a Business Combination or our liquidation, we will cease paying this monthly fee.

On March 26, 2015, our Sponsor irrevocably and unconditionally waived the $10,000 per month payment obligations for the period beginning on January 1, 2015 and ending on December 31, 2015. On January 13, 2016, our Sponsor irrevocably and unconditionally waived the $10,000 per month payment obligations for the period beginning on January 1, 2016 and ending on December 31, 2016.

~~Critical Accounting Policies~~

~~The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of~~ assets and liabilities ~~disclosure~~ of ~~contingent assets and liabilities at the date~~$3.3 million.

Cash flows from investing activities

Investing activities used $16.6 million of ~~the financial statements, and income and expenses~~cash during the ~~periods reported. Actual results could materially differ from those estimates. We have identified~~six months ended March 31, 2017 for the ~~following as our critical accounting policies:~~

~~Offering costs~~

~~We comply with~~Successor, primarily due to $5.1 million paid to effect asset acquisitions, and the ~~requirements~~additions of ~~Accounting Standards Codification (“ASC”) 340-10-S99-1~~property and ~~SEC Staff Accounting Bulletin Topic 5A – “Expenses~~equipment of ~~Offering.” Offering costs consist principally~~$14.5 million mainly related to facility improvements and additional information technology investments, partially offset by $2.9 million of ~~professional and registration fees incurred through the balance sheet date that are~~cash proceeds related to the Public Offering and were charged to stockholders’ equity upon the completion of the Public Offering. Accordingly, at each of March 31 2016 and 2015, offering costs totaling approximately $28,473,750 (including $27,513,750 in underwriters’ fees) have been charged to stockholders’ equity.

~~Redeemable Common Stock~~

~~All of the 50,025,000 common shares sold as part of the units in the Public Offering contain a redemption feature which allows~~reimbursement for the redemption of common shares under our Liquidation or Tender Offer/Stockholder Approval provisions. In accordance with ASC 480, redemption provisions not solely within our control require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although we did not specify a maximum redemption threshold, our charter provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets (stockholders’ equity) to be less than $5,000,001.

We recognize changes in redemption value immediately as they occur and adjusts the carrying value of the security to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against accumulated deficit.

As of March 31, 2016, 47,512,924 of the 50,025,000 public shares were classified outside of permanent equity at its redemption value. As of December 31, 2015, 47,663,155 of the 50,025,000 public shares were classified outside of permanent equity at its redemption value.

~~Loss per share of Common Stock~~

Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period, plus to the extent dilutive the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method. At March 31, 2016 and 2015, we had outstanding warrants to purchase 36,212,500 shares of common stock and notes that could convert into warrants and potentially be exercised or converted into common stock. For all periods presented, the weighted average of these shares was excluded from the calculation of diluted loss per share of common stock because their inclusion would have been anti-dilutive. As a result, dilutive loss per share of common stock is equal to basic loss per share of common stock.

~~Income taxes~~

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

~~Proposed Nexeo Business Combination~~

The following is a brief summary of the terms and background of the Merger Agreement. Any description in this Quarterly Report on Form 10-Q of the Merger Agreement is qualified in all respects by reference to the complete text of the Merger Agreement, which was filed with the SEC on March 22, 2016 as Exhibit 2.1 to our Current Report on Form 8-K. We have filed a definitive proxy statement with the SECcertain capital expenditures incurred in connection with the Proposed Nexeo Business Combination on May 9, 2016 (the “Proxy Statement”). The Proxy Statement contains important information regarding the Proposed Nexeo Business Combination. The following descriptionrelocation of ~~the Merger Agreement is qualified in all respects by reference to the more detailed description in the Proxy Statement.~~

On March 21, 2016, we entered into the Merger Agreement. Pursuant to the Proposed Nexeo Business Combination, first, Company Merger Sub will merge with and into Nexeo (the “Company Merger”), with Nexeo continuing as the surviving entity, with the Company and Blocker as its sole owners. Nexeo, immediately following the effectiveness of the Company Merger, Blocker Merger Sub will merge with and into Blocker, with Blocker continuing as the surviving entity and as a wholly-owned subsidiary of the Company.

Subject to the terms of the Merger Agreement and customary adjustments set forth therein, the aggregate purchase price for the Business Combination and related transactions is expected to be approximately $1,575 million, which is the value implied by adding (i) approximately $298 million equity value consideration to be issued to the Selling Equityholders (as defined below), (ii) approximately $420certain operations.

Investing activities used $7.4 million of cash ~~consideration payable~~during the six months ended March 31, 2016 for the Predecessor, mainly due to ~~the Selling Equityholders, (iii) the assumption or refinancing~~capital expenditures of ~~Nexeo’s~~$9.4 million primarily related to facility improvements and additional information technology investments, partially offset by net debt of $811 million as of December 31, 2015, and (iv) approximately $46 million in Deferred Cash Consideration (as defined in the Merger Agreement) paid to Selling Equityholders, and which amount will be reduced by, among other things, the aggregate amount of funds used to repay certain debt obligations of Nexeo and the assumption of capital lease obligations of Nexeo as set forth in the Merger Agreement. The consideration to be paid to holders of equity interests in Nexeo and Blocker as of the time immediately prior to the Proposed Nexeo Business Combination (“Selling Equityholders”) will be funded through a combination of cash and stock consideration. The amount of cash consideration is the sum of (i) cash held by Nexeo and certain of its subsidiaries at the closing of the Proposed Nexeo Business Combination, (ii) cash available to us from our Trust Account that holds the proceeds (including interest) of our IPO, and after giving effect to taxes payable, any redemptions that may be elected by any of our public stockholders for their pro rata share of the aggregate amount of funds on deposit prior to closing the Proposed Nexeo Business Combination and certain transaction fees and expenses in connection with the Proposed Nexeo Business Combination, including the payment of deferred underwriting commissions agreed to at the time of our IPO, (iii) the net proceeds of our anticipated debt financing and (iv) the anticipated proceeds from the sale of ~~shares~~assets of ~~newly issued common stock~~$2.0 million.

Cash flows from financing activities

Financing activities provided $91.0 million of cash during the ~~Company in~~six months ended March 31, 2017 for the Successor, primarily as a ~~private placement (the “PIPE Investment”), less (i) certain transaction fees~~result of net borrowings on the ABL Facility of $96.7 million and ~~expenses and (ii)~~net borrowings on short-term debt of $0.4 million, partially offset by payments on the ~~aggregate amount~~Term Loan Facility of funds paid to discharge certain debt obligations of Nexeo. The amount of stock consideration (the “Stock Consideration”), is a number of newly issued shares of our common stock, which shares will be valued at $10.00 per share for purposes of determining the aggregate number of shares payable to Selling Equityholders for their ownership interests therein. To the extent not utilized to consummate the Proposed Nexeo Business Combination or to repay the remainder of certain of Nexeo’s existing debt and$3.3 million, capital lease ~~obligations at~~payments of $1.5 million, and the payment of debt issuance costs of $1.3 million related to TLB Amendment No. 1. Net borrowings on the ABL Facility included approximately $58.0 million drawn in anticipation of the closing of the ~~Proposed Nexeo Business Combination,~~Ultra Chem Acquisition on April 3, 2017.

Financing activities used $103.9 million of cash during the proceeds from our Trust Account, debt financing and PIPE Investment will be used for general corporate purposes, including, but not limited to, working capital for operations, capital expenditures and future potential acquisitions.

Under the Merger Agreement, Selling Equityholders will also receive at the closing of the Proposed Nexeo Business Combination as consideration from our Sponsor a portion of the Founder Shares issued to our Sponsor at the time of our IPO (the “Founder Shares Transfer”). Our Sponsor is providing this consideration (the “Founder Share Consideration”), in lieu of transferring such Founder Shares back to the Company for cancellation, in exchange for no consideration, and reissuance of such Founder Shares to Selling Equityholders by the Company. The Founder Shares transferred to Selling Equityholders in connection with the Proposed Nexeo Business Combination will be subject to the conditions and restrictions set forth in the Founder Share Transfer Letter Agreement (the “Founder Share Transfer Letter Agreement”), datedsix months ended March ~~21,~~31, 2016 as may be amended from time to time, by and among Nexeo Holdco, LLC, Sponsor and the Company, the Shareholders’ and Registration Rights Agreement, dated as of March 21, 2016, as it may be amended from time to time, by and among New Holdco and certain of its affiliates, our Sponsor and the Company (the “SHRRA”), and the underwriting agreement that the Company entered into with the underwriters at the time of our IPO. The number of Founder Shares to be transferred to Selling Equityholders by our Sponsor will be a pro rata portion of 12,506,250 Founder Shares (less 30,000 Founder Shares being transferred to our independent directors) equal to the Stock Consideration, payable to Selling Equityholders (including any shares by which the Stock Consideration shall be reduced to cause the percentage of outstanding capital stock of the Company represented by the Stock Consideration and the Founder Share Consideration to equal 35% of all the outstanding capital stock, or the “Excess Shares”,) divided by the total shares of common stock of the post-combination company (including any shares issued in the PIPE Investment and any Excess Shares) and will be subject to forfeiture, transfer restrictions and restrictions on dividend distributions in the event that certain stock price milestones are not met.

In addition to the transactions contemplated by the Merger Agreement and in connection with the Proposed Nexeo Business Combination, the Company’s private placement warrants issued to our Sponsor at the time of our IPO will be exchanged by our Sponsor for the ~~Company’s common stock at an exchange ratio of 0.10 shares of common stock for each private placement warrant at the closing of the Proposed Nexeo Business Combination.~~

Pursuant to the terms of the Merger Agreement, the aggregate stock ownership of Selling Equityholders from the stock consideration and the Founder Shares Transfer will be capped at 35% (the “35% Cap”). If the 35% Cap applies and the Company does not otherwise satisfy the remaining purchase price in cash at closing, the Selling Equityholders will receive the remaining purchase price as deferred cash consideration. Selling Equityholders’ rights to the payment of such deferred cash consideration are subject to the terms and conditions set forth in the Merger Agreement and SHRRA.

Prior to or at the closing of the Proposed Nexeo Business Combination, the Company will also enter into the tax receivable agreement with Selling Equityholders. This tax receivable agreement will generally provide for the payment by the Company to the Selling Equityholders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the closing of the Proposed Nexeo Business Combination as a result of (i) certain increases in tax basis resulting from the Company Merger, (ii) certain tax attributes of Nexeo existing prior to the Proposed Nexeo Business Combination, (iii) net operating losses and certain other tax attributes of Blocker available to the CompanyPredecessor, primarily as a result of the Blocker Merger, and (iv) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, payments it makes under this tax receivable agreement. The Company will retain the benefit of the remaining 15% of these$29.6 million excess cash ~~savings.~~

As promptly as practicable after the date of the Merger Agreement described herein, the Company has agreed to provide its stockholders with the opportunity to redeem shares of common stock in conjunction with a stockholder voteflow payment on the ~~transactions contemplated by~~Predecessor Term Loan Facility, net payments on the Merger Agreement. The Company has further agreed (i) not to terminate or withdraw such redemption rights other than in connection with a valid termination of the Merger Agreement and (ii) extend such period for public stockholders to exercise their redemption rights for any period required by any rule, regulation, interpretation or position of the SEC or The NASDAQ Stock Market.

The consummation of the transactions contemplated by the Merger Agreement is subject to a number of conditions set forth in the Merger Agreement including, among others, receipt of the requisite approval of the stockholders of the Company.

The foregoing summary of the Proposed Nexeo Business Combination is qualified in all respects by reference to the complete text of the Merger Agreement, the form of tax receivable agreement, the founder share transfer letter agreementPredecessor ABL Facility and the ~~shareholders’~~Notes of $68.1 million and ~~registration rights agreement which are attached~~$8.7 million, respectively, and payments on capital leases of $0.9 million, partially offset by net borrowings of $3.6 million on short-term lines of credit available to Nexeo Plaschem.

Table of Contents

Contractual Obligations and Commitments

As of March 31, 2017, amounts due under our contractual commitments were as ~~Exhibit 2.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.1, respectively,~~follows:



	Payments Due by Period (in millions)
	Less than 1 Year		1-3 Years		4-5 Years		More than 5 Years		Total
Short-term and long-term debt obligations ⁽¹⁾	$	44.5	$	13.0	$	227.4	$	617.6	$	902.5
Estimated interest payments on long-term debt obligations ⁽²⁾	40.1		84.0		75.6		38.4		238.1
Capital lease obligations ⁽³⁾	6.9		14.4		14.0		38.7		74.0
Operating lease obligations ⁽⁴⁾	14.9		20.6		11.2		5.3		52.0
Employee benefit obligations	—		—		—		2.6		2.6
Contingent Consideration ⁽⁵⁾	5.4		35.2		79.2		127.7		247.5
Other obligations ⁽⁶⁾	4.6		1.9		—		—		6.5
Total	$	116.4	$	169.1	$	407.4	$	830.3	$	1,523.2

⁽¹⁾

Short-term obligations primarily include the payment of $38.0 million outstanding under credit facilities available to Nexeo Plaschem, and $6.5 million in principal installment payments under our Term Loan Facility. Long-term debt obligations include (i) the payment of $214.4 million in outstanding principal (as of March 31, 2017) under our ABL Facility and (ii) the payment of $643.6 million in outstanding principal under our Term Loan Facility. See Note 7 to our condensed consolidated financial statements.


⁽²⁾	Estimated interest payments include cash interest payments and estimated commitment fees on long-term debt obligations. Variable rate interest payments were estimated using interest rates as of March 31, 2017 held constant to maturity.

⁽³⁾

Capital lease obligations represent future payments on capital lease agreements, including lease payments on all tractors under the Ryder Lease and the Montgomery Lease. The amounts above include executory costs under these capital leases of $2.4 million per year, for aggregate executory costs totaling $18.6 million. Additionally, the amounts include decreasing annual interest payments ranging from $2.1 million to $0.1 million, for aggregate interest payments totaling $18.6 million on all capital leases. We are permitted to terminate the lease of an individual tractor under the Ryder Lease on the anniversary of its delivery date, provided that certain conditions are met. In the event we terminate the lease of an individual tractor in accordance with the terms of the Ryder Lease, we may elect to purchase the individual tractor at a predetermined residual value or return the tractor to Ryder, subject to an adjustment based on the then-current market value of the individual tractor. See Notes 5 and 7 to our condensed consolidated financial statements.


⁽⁴⁾	Operating lease obligations represent payments for a variety of facilities and equipment under non-cancellable operating lease agreements, including office buildings, transportation equipment, warehouses and storage facilities and other equipment.

⁽⁵⁾

Liabilities for contingent consideration are related (i) to the TRA that we entered into with the Selling Equityholders and (ii) the Deferred Cash Consideration that will be paid to Selling Equityholders pursuant to the Merger Agreement. The amount included in the table above for the Deferred Cash Consideration is based on the undiscounted expected value of the payment and is currently included in the 4-5 Years column based on the final payment date of June 9, 2021 as defined in the Merger Agreement. However, as further defined in the Merger Agreement, payments could be required to be made by the Company prior to June 9, 2021. The timing of payments associated with the liability for the contingent consideration related to the TRA is based on expected undiscounted cash flows in future periods, and may change based on actual results. See Notes 3 and 9 to our condensed consolidated financial statements.

(6)

Other obligations are related to (i) non-cancellable equipment orders, (ii) certain IT-related contracts, (iii) estimated obligation costs to relocate employees or new hires in various U.S. locations, primarily to The Woodlands, Texas and (iv) remaining payments related to the asset acquisition completed during thesix months ended March 31, 2017 (see Note 3 to our condensed consolidated financial statements). The relocations are assumed to be completed within one year, although it is not practicable to establish definite completion dates for each employee’s relocation.

Off Balance Sheet Arrangements

We had no off balance sheet arrangements, as defined in Item 303(a) (4) (ii) of Regulation S-K, at March 31, 2017.

Recent Accounting Pronouncements

See Note 2 to our ~~Current Report on Form 8-K filed with the SEC on March 22, 2016.~~

condensed consolidated financial statements.

Table of Contents

~~ITEM~~

Item 3. ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

~~To date,~~Quantitative and Qualitative Disclosures about Market Risk

Commodity and Product Price Risk

Our business model is to buy and sell products at current market prices in quantities approximately equal to estimated customer demand. Energy costs are a significant component of raw materials that are included in our ~~efforts have been limited~~product costs. Rising or volatile raw material prices for our suppliers, especially those of hydrocarbon derivatives, may cause our costs to ~~organizational activities and activities relating~~increase or may result in volatility in our profitability. Although we do not speculate on changes in the prices of the products we sell, because we maintain inventories in order to serve the needs of our customers, we are subject to the ~~Public Offering~~risk of reductions in market prices for products we hold in inventory. We do not use derivatives to manage our commodity price risk because of the large number of products we sell and the ~~identification~~large variety of ~~a target business.~~raw materials used in the production of those products. Inventory management practices are focused on managing product price risk by generally purchasing our inventories via our ERP system which helps us forecast customer demand based on historical practices. Global inventory balances can fluctuate based on variations in regional customer demand forecasts. We ~~have neither engaged~~collaborate directly with customers in all regions to enhance the ongoing accuracy of these forecasts in order to reduce the number of days sales held in inventories, as well as lower the amount of any slow moving and older inventories. In addition, we are generally able to pass on price increases to our customers, subject to market conditions, such as declining or otherwise volatile market prices for feedstocks, the presence of competitors in particular geographic and product markets and prevailing pricing mechanisms in customer contracts. We believe that these risk management practices reduce our exposure to changes in product selling prices or costs; however, significant unanticipated changes in market conditions or commodity prices could adversely affect our results of operations, ~~nor generated any revenues. As~~financial condition and cash flows, as the ~~proceeds~~prices of the products we purchase and sell are volatile.

Credit Risk

We are subject to the risk of loss arising from the ~~Public Offering held~~credit risk related to the possible inability of our customers to pay for the products we resell and distribute to them. We attempt to limit our credit risk by monitoring the creditworthiness of our customers to whom we extend credit and establish credit limits in accordance with our ~~Trust Account~~credit policy. We perform credit evaluations on substantially all customers requesting credit. With the exception of Nexeo Plaschem’s operations, we generally do not require collateral with respect to credit extended to customers; however, we will not extend credit to customers for whom we have ~~been invested~~substantial concerns and will deal with those customers on a cash basis. Nexeo Plaschem offers billing terms that allow certain customers to remit payment during a period of time ranging from 30 days to nine months. These notes receivables ($5.5 million at March 31, 2017) are supported by banknotes issued by large banks in ~~short~~China on behalf of their customers.

At March 31, 2017, no individual customer represented greater than 5.0% of the outstanding accounts receivable balance.

Interest Rate Risk

Interest rate risks can occur due to changes in market interest rates. This risk results from changes in the fair values of fixed-interest rate financial instruments or from changes in the cash flows of variable-interest rate financial instruments. The optimal structure of variable and fixed interest rates is determined as part of interest rate risk management. It is not possible to simultaneously minimize both kinds of interest rate risk. We take steps to mitigate interest rate risk in part by entering into interest rate swap agreements as described under “Fair Value Measurements” below. Also, see Note 8 to our condensed consolidated financial statements.

Borrowings under the U.S. Tranche and the Canadian Tranche of the ABL Facility bear interest, at our option, at either an alternate base rate or Canadian prime rate, as applicable, plus an applicable margin (ranging from 0.25% to 0.75% pursuant to a grid based on average excess availability) or LIBOR or Canadian BA rate (as defined in the ABL Facility), as applicable, plus an applicable margin (ranging from 1.25% to 1.75% pursuant to a grid based on average excess availability). Loans under the FILO Tranche within the ABL Facility will bear interest, at an alternate base rate plus an applicable margin (ranging from 1.00% to 1.50% pursuant to a grid based on average excess availability) or LIBOR plus an applicable margin (ranging from 2.00% to 2.50% pursuant to a grid based on average excess availability).

Borrowings under our ABL Facility bear interest at a variable rate, which was a weighted average rate of 2.56% for the three months ended March 31, 2017. For each $100.0 million drawn on the ABL Facility, a 100 basis point increase in the interest rate would result in a $1.0 million increase in annual interest expense.

Table of Contents

On March 22, 2017, the Company completed TLB Amendment No. 1 amending the current Term Loan Facility. TLB Amendment No. 1 reduced the interest rate margin applicable to outstanding term ~~investments,~~loans by 50 basis points from 4.25% to 3.75% for LIBOR loans and from 3.25% to 2.75% for base rate loans. In addition, the 1% LIBOR floor was eliminated. TLB Amendment No.1 provides a prepayment premium equal to 1% of the amount of the term loan applicable to certain repricing transactions occurring on or prior to six months from the effective date of TLB Amendment No. 1.

Changes in market interest rates will have an effect on the Term Loan Facility interest expense. A 100 basis point increase/decrease in the interest rate would result in an increase/decrease of $6.5 million in annual interest expense based on the Term Loan Facility balance.

Fair Value Measurements

As a result of the Business Combination, we incurred liabilities related to contingent consideration payable to the Selling Equityholders, which are required to be adjusted to fair value at each reporting period. These measurements are considered Level 3 measurements within the fair value hierarchy. Projected taxable income, current interest rates, current tax rates and the market price of our ~~only market~~common stock are key inputs used to estimate the fair value of these liabilities. As a result, any changes in these inputs will impact the fair value of these liabilities and could materially impact the amount of income or expense recorded each reporting period.

The fair value of the liability for the contingent consideration related to the TRA was $97.9 million as of March 31, 2017. The calculation of the liability for the contingent consideration related to the TRA uses a cash flow model which incorporates current interest rates in the discount rate used to discount the obligation to present value. A 100 basis point increase in the discount rate compared to the discount rate used at the March 31, 2017 valuation would have resulted in a decrease of approximately $0.8 million in the value of the liability for the contingent consideration related to the TRA. Additionally, this cash flow model is sensitive to changes in applicable tax rates. A 100 basis point increase in the tax rate compared to the tax rate used at the March 31, 2017 valuation would have resulted in an increase of approximately $2.8 million in the value of the liability for the contingent consideration related to the TRA.

The fair value of the liability for the contingent consideration related to Deferred Cash Consideration was $43.1 million as of March 31, 2017. The liability for the contingent consideration related to the Deferred Cash Consideration is highly sensitive to the price of our common stock at each valuation date. A $1.00 increase/decrease in the price of our common stock from its March 31, 2017 price would have increased/decreased the fair value of the liability for the Deferred Cash Consideration by approximately $4.9 million.

During the three months ended March 31, 2017, the Company entered into four interest rate swap agreements with a combined notional amount of $300.0 million to help mitigate interest rate risk ~~exposure relates~~related to ~~fluctuations~~the variable-rate Term Loan Facility. The agreements expire at various dates from February 2020 through March 2022 and are accounted for as cash flow hedges. Accordingly, gains or losses resulting from changes in the fair value of the swaps are recorded in other comprehensive income to the extent that the swaps are effective as hedges. Gains and losses resulting from changes in the fair value applicable to the ineffective portion, if any, are reflected in income. Gains and losses recorded in other comprehensive income are reclassified into and recognized in income when the interest expense on the Term Loan Facility is recognized. During the six months ended March 31, 2017, we classified into income and recognized a realized loss on the interest rate swaps of $0.3 million, which was recorded in interest ~~rates. However, due to~~expense. During the ~~short-term nature of these investments,~~six months ended March 31, 2017, we ~~believe there will be no associated material exposure to~~recorded an unrealized gain on the interest rate ~~risk.~~swaps (net of classifications into income) of $0.3 million, which was recorded in other comprehensive income. As of March 31, ~~2016,~~2017, $1.3 million in unrealized losses were expected to be realized and recognized in income within the ~~effective annualized interest~~next twelve months.

Foreign Currency Risk

We may be adversely affected by foreign exchange rate ~~payable~~fluctuations since we conduct our business on an international basis in multiple currencies. A portion of our ~~investments was approximately 0.15 %.~~

Assales and costs of sales are denominated in currencies other than the functional currency of our subsidiaries, exposing us to currency transaction risk. Additionally, because we report our consolidated results in USD, the results of operations and the financial position of our local international operations, which are generally reported in the relevant local currencies, are translated into USD at the applicable exchange rates for inclusion in our condensed consolidated financial statements, exposing us to currency translation risk. We currently do not utilize financial derivatives to manage our foreign currency risk, but we continue to monitor our exposure to foreign currency risk, employ operational strategies where practical and may consider utilizing financial derivatives in the future to mitigate losses associated with these risks.

Table of Contents

Included in our condensed consolidated statements of operations for the six months ended March 31, ~~2016~~2017 is a $1.6 million net loss related to foreign exchange rate fluctuations. The most significant currency exposures during this period were to the RMB, CAD and ~~December~~the Peso versus the USD. These currencies fluctuated to various degrees but such fluctuations did not exceed approximately 4% from their respective values since September 30, 2016. Assuming the same directional fluctuations as occurred during the six months ended March 31, ~~2015, approximately $482,714,545 and $482,338,647, respectively (excluding approximately $18,309,150~~2017, a hypothetical 10.0% weakening/strengthening in the average exchange rates of ~~deferred underwriting discounts), was held~~these currencies from that date would have generated a net loss/gain of $0.5 million in our ~~Trust Account~~condensed consolidated statements of operations for the ~~purposes of consummating a Business Combination. As of~~six months ended March 31, 2016, the proceeds held in our Trust Account (including the deferred underwriting discounts) consist of $312,597,363 invested in U.S. government treasury bills and $188,426,332 in a money market fund. As of December 31, 2015, the proceeds held in our Trust Account (including the deferred underwriting discounts) consist of $499,848,764 invested in U.S. government treasury bills and $799,033 in a money market fund.

~~We have not engaged in any hedging activities since our inception on March 24, 2014. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.~~

2017.

~~ITEM~~

Item 4. ~~CONTROLS AND PROCEDURES~~

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures ~~are~~(as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and ~~other~~ procedures ~~that~~ are designed to ensure that the information required to be disclosed by us in ~~our~~ reports ~~filed or submitted~~that we file under the ~~Securities~~ Exchange Act ~~of 1934,~~is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as ~~amended (the “Exchange Act”)~~appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the ~~SEC’s~~ rules and ~~forms. Disclosure~~forms of the SEC. Based on the evaluation performed, our management, including the principal executive officer and principal financial officer, concluded that the disclosure controls and procedures ~~include, without limitation, controls and procedures designed to ensure that information required to be disclosed~~were effective as of March 31, 2017.

Changes in ~~company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our~~Internal Control over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer ~~to allow timely decisions regarding required disclosure.~~

~~As required~~evaluated the changes in our internal control over financial reporting that occurred during the quarterly period covered by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2016.this Quarterly Report on Form 10-Q. Based ~~upon~~on their evaluation, ~~our Chief Executive Officer and Chief Financial Officer~~it is concluded that ~~our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective.~~

~~During the most recently completed fiscal quarter,~~ there ~~has~~had been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2017 that ~~has~~have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II

~~PART II. OTHER INFORMATION~~

Item 1. Legal Proceedings

We are not currently a party to any legal proceedings that, if determined adversely against us, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations or cash flows.

In July 2014, Ashland filed a lawsuit -- Ashland Inc. v. Nexeo Solutions, LLC, Case No. N14C-07-243 JTV CCLD, in the Superior Court for the State of Delaware in and for New Castle County. In the suit, Ashland seeks a declaration that Holdings is obligated to indemnify Ashland for losses Ashland incurs pertaining to the Other Retained Remediation Liabilities, up to the amount of a $5.0 million deductible, which Ashland contends applies pursuant to the ADA Purchase Agreement. Ashland further alleges that Holdings has breached duties related to that agreement by not having so indemnified Ashland for amounts Ashland has incurred for the Other Retained Remediation Liabilities at sites where Ashland disposed of wastes prior to the Ashland Distribution Acquisition, and on that basis seeks unspecified compensatory damages, costs and attorney’s fees. We disagree with Ashland’s construction of the ADA Purchase Agreement and are vigorously defending the lawsuit.

In April and November 2011, two local unions each filed an unfair labor practice charge against us with the NLRB, alleging that we should be considered a successor of Ashland and, as such, we were obligated to bargain to agreement or impasse with the unions before changing the employment terms that were in effect before commencing operations, including continuing to cover employees under the union-affiliated multi-employer pension plans in which the employees participated as employees of the Distribution Business. In November 2011, the NLRB filed a complaint against us with respect to both cases, and a consolidated hearing was held before an administrative law judge in April and May of 2012. On June 28, 2012, the NLRB administrative law judge found substantially in our favor, holding that we were not obligated to continue to cover employees in the multi-employer pension plans. We reached a settlement with one of the unions resulting in a collective bargaining agreement that keeps the employees in our 401(K) plan. The NLRB approved that settlement and, in May of 2014, dismissed the case with respect to that local union. We reached a settlement with the remaining union that should result in a collective bargaining agreement that keeps the employees in our 401(K) plan. The settlement is currently awaiting approval by the NLRB.

In June 2014, we self-disclosed to the DTSC that an inventory of our Fairfield facility had revealed potential violations of RCRA and the California Health and Safety Code. Although no formal proceeding has been initiated, we expect the DTSC to seek payment of fines or other penalties for non-compliance. We do not expect the amount of any such fine or penalty to have a material adverse effect on our business, financial position or results of operations.

From time to time, we are party to ongoing legal proceedings in the ordinary course of business. While the outcome of these proceedings cannot be predicted with certainty, we do not believe the results of these proceedings, other than as is disclosed elsewhere in this Quarterly Report on Form 10-Q, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operation or liquidity.

~~ITEM 1. LEGAL PROCEEDINGS~~

~~None.~~

Table of Contents

~~ITEM~~

Item 1A. ~~RISK FACTORS~~

~~Other than~~Risk Factors

We are subject to certain risks and hazards due to the ~~risk factors disclosed in~~nature of the ~~Proxy Statement, which~~business activities we ~~incorporated herein by reference, there~~conduct. For a discussion of these risks, see “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 filed with the SEC on December 8, 2016. These risks could materially and adversely affect our business, financial condition, cash flows and result of operations. There have been no material changes to the risk factors ~~disclosed~~described in ~~our Annual Report filed on January 14, 2016 with~~ the ~~SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors~~Form 10-K described above. We may experience additional risks and uncertainties not ~~presently~~currently known to us or, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also ~~impair~~materially and adversely affect our business, orfinancial condition and results of operations. ~~We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.~~

~~ITEM~~

Item 2. ~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

Unregistered Sales

~~On March 24, 2014, our Sponsor purchased an aggregate~~ of 14,375,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. Immediately prior to the pricing of the Public Offering, on June 5, 2014, our Sponsor forfeited 1,868,750 Founder Shares so that the remaining 12,506,250 Founder Shares represented 20.0% of the outstanding shares upon completion of the Public Offering.

On June 5, 2014, simultaneously with the commencement of the Public Offering, we consummated a sale of 22,400,000 Private Placement Warrants at a price of $0.50 per Private Placement Warrant, generating total proceeds of $11,200,000. The Private Placement Warrants, which were purchased by our Sponsor, are substantially similar to the warrants underlying the units issued in the Public Offering, except that if held by the original holder or their permitted assign, they (i) may be exercised for cash or on a cashless basis, (ii) are not subject to being called for redemptionEquity Securities and (iii) subject to certain limited exceptions, will be subject to transfer restrictions until 30 days following the consummation of a Business Combination. If the Private Placement Warrants are held by holders other than its initial holders, the Private Placement Warrants will be redeemable by us and exercisable by the holders on the same basis as the Warrants.

On March 26, 2015, we issued a convertible promissory note (the “Convertible Note”) to our Sponsor that provides for our Sponsor to loan us up to $300,000 for ongoing expenses. The Convertible Note is interest bearing at 5% per annum and is due and payable on June 11, 2016. At the option of our Sponsor, any amounts outstanding under the Convertible Note may be converted into warrants to purchase shares of our common stock at a conversion price of $0.60 per warrant. Each warrant will entitle our Sponsor to purchase one-half of one share of our common stock at an exercise price of $5.75 per half share ($11.50 per whole share). Each warrant will contain other terms identical to the terms contained in the Private Placement Warrants previously issued to our Sponsor. On April 16, 2015 we borrowed the total proceeds of $300,000 from the Convertible Note entered with our Sponsor. For the three months ended March 31, 2016, the Company incurred $3,830 of interest expense, which under the terms of the Convertible Note has been added to the principal amount. As of March 31, 2016, the outstanding balance of the Convertible Note was $314,474. As of December 31, 2015, the outstanding balance of the Convertible Note was $310,644.

On January 5, 2016, we issued a convertible promissory note (the “Second Convertible Note”) to our Sponsor that provides for our Sponsor to loan us up to $425,000 for ongoing expenses. The Second Convertible Note is interest bearing at 5% per annum and is due and payable on June 11, 2016. At the option of our Sponsor, any amounts outstanding under the Second Convertible Note may be converted into warrants to purchase shares of Common Stock at a conversion price of $0.50 per warrant. Each warrant will entitle our Sponsor to purchase one-half of one share of Common Stock at an exercise price of $5.75 per half share ($11.50 per whole share). Each warrant will contain other terms identical to the terms contained in the Private Placement Warrants. On January 5, 2016, we borrowed the total proceeds of $425,000 from the Second Convertible Note entered with our Sponsor. For the three months ended March 31, 2016, the Company incurred $5,240 of interest expense, which under the terms of the Convertible Note has been added to the principal amount. As of March 31, 2016, the outstanding balance of the Convertible Note was $430,240.

On March 31, 2016, we issued a promissory note (the “March 2016 Note”) to our Sponsor pursuant to which we may borrow up to $750,000. The March 2016 Note is interest bearing at 5% per annum and is due and payable on the first to occur of (1) the consummation of the Proposed Nexeo Business Combination or (2) June 11, 2016 (or such later or such later date as may be approved by our stockholders by amendment of our charter to complete an initial Business Combination). As of March 31, 2016, the outstanding balance of the March 2016 Note was $235,032, including $32 of accrued interest.

In connection with the Proposed Nexeo Business Combination, we entered into a subscription agreement, dated May 9, 2016, with Fidelity Select Portfolios: Chemicals Portfolio, Fidelity Advisor Series I: Fidelity Advisor Value Fund, Fidelity Capital Trust: Fidelity Value Fund, Fidelity Select Portfolios: Materials Portfolio, Fidelity Central Investment Portfolios LLC: Fidelity Materials Central Fund and Variable Insurance Products Fund IV: Materials Portfolio, which funds we collectively refer to as “Fidelity” and which subscription agreement we refer to as the “Fidelity Subscription Agreement”, pursuant to which Fidelity has agreed to purchase up to approximately 3.86 million shares, or $38.6 million, of shares of Common Stock on a private placement basis immediately prior to the closing of the Business Combination.

Also in connection with the Proposed Nexeo Business Combination, we entered into a subscription agreement, dated May 6, 2016, with MFS Series Trust X on behalf of MFS Global Alternative Strategy Fund, MFS Series Trust I on behalf of MFS New Discovery Fund and MFS Variable Insurance Trust on behalf of MFS New Discovery Series, which funds we collectively refer to as “MFS” and which subscription agreement we refer to as the “MFS Subscription Agreement” and, together with the Fidelity Subscription Agreement, the “Subscription Agreements”, pursuant to which MFS has agreed to purchase up to approximately 0.37 million shares, or $3.7 million, of shares of Common Stock on a private placement basis immediately prior to the closing of the Business Combination.

Pursuant to the Subscription Agreements, we have agreed to register the shares sold in the private placement under the Securities Act by filing with the SEC a registration statement registering the resale of such shares by Fidelity and MFS, subject to customary terms and conditions. Copies of the Subscription Agreements are filed with this Quarterly Report on Form 10-Q as Exhibit 10.6 and Exhibit 10.7, and are incorporated herein by reference, and the foregoing description of the Subscription Agreements are qualified in their entirety by reference thereto.

The sale of the above securities were deemed to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

Use of Proceeds

On June 5, 2014, our registration statement on Form S-1 (File No. 333-195854) was declared effective by the SEC and also on June 5, 2014 our subsequent registration statement on Form S-1 (File No. 333-196547) became effective upon filing with the SEC in accordance with Rule 462(b) under the Securities Act, for our Public Offering. In our Public Offering, we sold an aggregate 50,025,000 units at an offering price to the public of $10.00 per unit for an aggregate offering price of $500,250,000, with each unit consisting of one share of common stock and one Warrant. Each Warrant entitles the holder thereof to purchase one-half of one share of our common stock at a price of $5.75 per half share. Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as book runners (the “Underwriters”). The Public Offering commenced as of June 6, 2014 and did not terminate before all of the securities registered in the registration statement were sold. On June 11, 2014, we closed the sale of such units, resulting in net proceeds to us of $500,250,000.

We paid a total of approximately $9,204,600 in underwriting discounts and commissions and approximately $960,000 for other costs and expenses related to the Public Offering. In addition, the Underwriters agreed to defer up to approximately $18,309,150 in underwriting discounts and commissions, which amount will be payable upon consummation of an initial Business Combination, if consummated. We also repaid the $350,000 in loans made to us by our Sponsor to cover expenses related to the Public Offering. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates. There has been no material change in the planned use of proceeds from the Public Offering as described in our final prospectus filed with the SEC on June 5, 2014.

Net proceeds of $500,250,000 from the Public Offering and simultaneous sale of the Private Placement Warrants including $18,309,150 of deferred underwriting commissions are being held in our Trust Account, invested in U.S. “government securities,” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 (the “1940 Act”) with a maturity of 180 days or less or in any open ended investment company that holds itself out as a money market fund selected by us meeting the conditions of paragraphs (e)(2), (e)(3) and (e)(4) of Rule 2a 7 of the 1940 Act, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of our Trust Account as described below.

The amount of proceeds not deposited in our Trust Account was $1,095,400. In addition, interest income on the funds held in our Trust Account may be released to us to pay our franchise and income tax obligations.

None.

Item 3. Defaults Upon Senior Securities

None.

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~

~~None.~~

~~ITEM~~

Item 4. ~~MINE SAFETY DISCLOSURES~~

Mine Safety Disclosures

Not applicable.

~~ITEM~~

Item 5. ~~OTHER INFORMATION~~

On January 11, 2016, we entered into a letter agreement with Robert C. Dinerstein which contains certain rights and obligations with respect of us, including, but not limited to, certain voting obligations and transfer restrictions in respect of our capital stock that may be owned by Mr. Dinerstein, and restrictions on Mr. Dinerstein’s involvement with other blank check companies. Each of our other directors and executive officers had previously executed a substantially similar letter agreement. The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Letter Agreement, dated January 11, 2016, between the Company and Robert C. Dinerstein, which is filed as Exhibit 10.8 hereto and incorporated by reference herein.

Also on January 11, 2016, we entered into an indemnity agreement with Mr. Dinerstein. Each of our other directors had previously executed a substantially similar agreement. The indemnity agreement provides Mr. Dinerstein, as a director of the Company, with contractual indemnification in addition to the indemnifications provided for in our amended and restated certificate of incorporation. The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Indemnity Agreement, dated January 11, 2016, between the Company and Robert C. Dinerstein, which is filed as Exhibit 10.9 hereto and incorporated by reference herein.

~~ITEM 6. EXHIBITS~~

~~The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.~~

~~Exhibit~~ ~~Number~~		~~Description~~
~~2.1~~		Agreement and Plan of Merger, dated March 21, 2016, by and among the Company, Neon Acquisition Company LLC, Neon Holding Company LLC, TPG Accolade Delaware, LP, Nexeo Solutions Holdings, LLC and Nexeo Holdco, LLC (incorporated by reference to the document previously filed to the Form 8-K filed by the Company on March 22, 2016).
~~3.1~~		~~Amended and Restated Certificate of Incorporation (incorporated by reference to the document previously filed with Amendment No. 3 to the Form S-1 filed by the Company on June 4, 2014).~~
~~3.2~~		~~Bylaws (incorporated by reference to the document previously filed to the Form S-1 filed by the Company on May 9, 2014).~~
~~4.1~~		~~Specimen Common Stock Certificate (incorporated by reference to the document previously filed with Amendment No. 1 to the Form S-1 filed by the Company on May 30, 2014).~~
~~4.2~~		~~Warrant Agreement (incorporated by reference to the document previously filed to the Form 8-K filed by the Company on June 16, 2014).~~
~~10.1~~		Shareholders’ and Registration Rights Agreement, dated March 21, 2016, by and among the Company, TPG Capital LLC and WL Ross Sponsor LLC (incorporated by reference to the document previously filed to the Form 8-K filed by the Company on March 22, 2016).
~~10.2~~		Form of Tax Receivable Agreement by and among the Company and the other parties thereto (incorporated by reference to the document previously filed to the Form 8-K filed by the Company on March 22, 2016).
~~10.3~~		Private Placement Warranty Exchange Letter Agreement, dated March 21, 2016, by and among the Company, WL Ross Sponsor LLC and Nexeo Solutions Holdings, LLC (incorporated by reference to the document previously filed to the Form 8-K filed by the Company on March 22, 2016).
~~10.4~~		Founder Share Transfer Letter Agreement, dated March 21, 2016, by and among the Company, WL Ross Sponsor LLC and Nexeo Holdco, LLC (incorporated by reference to the document previously filed to the Form 8-K filed by the Company on March 22, 2016).
~~10.5~~		~~Promissory Note, dated March 31, 2016, issued to WL Ross Sponsor LLC (incorporated by reference to the document previously filed to the Form 8-K filed by the Company on April 5, 2016).~~
10.6*		Fidelity Subscription Agreement, dated May 9, 2016, by and between the Company and Fidelity Select Portfolios: Chemicals Portfolio, Fidelity Advisor Series I: Fidelity Advisor Value Fund, Fidelity Capital Trust: Fidelity Value Fund, Fidelity Select Portfolios: Materials Portfolio, Fidelity Central Investment Portfolios LLC: Fidelity Materials Central Fund and Variable Insurance Products Fund IV: Materials Portfolio.
~~10.7~~*		MFS Subscription Agreement, dated May 6, 2016, by and between the Company and MFS Series Trust X on behalf of MFS Global Alternative Strategy Fund, MFS Series Trust I on behalf of MFS New Discovery Fund and MFS Variable Insurance Trust on behalf of MFS New Discovery Series.
~~10.8~~*		~~Letter Agreement, dated January 11, 2016, between the Company and Robert C. Dinerstein.~~
~~10.9~~*		~~Indemnity Agreement between the Company and Robert C. Dinerstein.~~
31.1*		~~Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).~~
31.2*		~~Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).~~
32.1**		~~Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.~~
32.2**		~~Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.~~
101.INS*		~~XBRL Instance Document~~
101.SCH*		~~XBRL Taxonomy Extension Schema~~
101.CAL*		~~XBRL Taxonomy Extension Calculation Linkbase~~
101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase~~
101.LAB*		~~XBRL Taxonomy Extension Label Linkbase~~
101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase~~

~~Filed herewith~~

The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of WL Ross Holding Corp. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q irrespective of any general incorporation language contained in such filing.

Other Information

None.

~~SIGNATURES~~

Table of Contents

SIGNATURE

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



	~~WL ROSS HOLDING CORP.~~Nexeo Solutions, Inc.

~~Date:~~ May 10, ~~2016~~2017	By:	/s/ ~~Wilbur L.~~ Ross ~~Jr.~~
	~~Name:~~	~~Wilbur L. Ross, Jr.~~
	~~Title:~~	~~Chief Executive Officer (Principal Executive Officer)~~

~~Date: May 10, 2016~~	~~/s/ Michael~~ J. ~~Gibbons~~
	~~Name:~~	~~Michael J. Gibbons~~
	~~Title:~~	~~Chief Financial Officer and Secretary~~Crane
		(Ross J. Crane
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Table of Contents

Exhibit Index



Exhibit Number		Description

2.1		Stock Purchase Agreement, dated March 9, 2017, by and among Nexeo Solutions, LLC, Nexeo Solutions Mexico Holdings, LLC and the shareholders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36477) filed with the SEC on April 1, 2017.

10.1		Amendment No. 1, dated March 22, 2017, among Nexeo Solutions Holdings, LLC, Nexeo Solutions, LLC, Nexeo Solutions Sub Holdings Corp., the other Loan Parties identified therein, Bank of America, N.A., as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36477) filed with the SEC on March 22, 2017

31.1†		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2†		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1††		Certifications of Principal Executive Officer and ~~Accounting Officer)~~Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		Interactive data files pursuant to Rule 405 of Regulation S-T.

†Filed herewith.

††Furnished herewith.

*Pursuant to Rule 406T of Regulation S-T, the interactive data files included in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.



Delaware		46-5188282
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification ~~Number)~~
~~or organization)~~		No.)

~~1166 Avenue of the Americas~~ 3 Waterway Square Place, Suite 1000 The Woodlands, Texas
~~New York, New York~~		~~10036~~77380
(Address of principal executive offices)		(Zip Code)



Large accelerated filer o		Accelerated filer x

Non-accelerated filer o	~~Smaller reporting company~~ o
(Do not check if a smaller reporting company)		Smaller reporting company o
		Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

	i Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Operations	8
	Condensed Consolidated Statements of Comprehensive Income (Loss)	9
	Condensed Consolidated Statement of Equity	10
	Condensed Consolidated Statements of Cash Flows	11
	Notes to Condensed Consolidated Financial Statements	12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		39
Item 3. Quantitative and Qualitative Disclosures About Market Risk		55
Item 4. Controls and Procedures		57

PART II—OTHER INFORMATION		58
Item 1. Legal Proceedings		58
Item 1A. Risk Factors		59
Item 2. Unregistered Sales of Equity Securities And Use of Proceeds		59
Item 3. Defaults Upon Senior Securities		59
Item 4. Mine Safety Disclosures		59
Item 5. Other Information		59
Item 6. Exhibits		61

	March 31, 2016			December 31, 2015
	(unaudited)			(audited)
ASSETS:
Current assets:
Cash	$	187		$	10,000
Prepaid expenses		58,670			48,654
Total current assets		58,857			58,654
Noncurrent assets:
Investments and cash held in trust account		501,023,695			500,647,797

Total assets	$	501,082,552		$	500,706,451

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accrued expenses	$	1,619,413		$	386,811
Sponsor convertible note		744,714			310,644
Sponsor promissory note		235,032			-
State franchise tax accrual		45,000			68,294
Total current liabilities		2,644,159			765,749

Other liabilities:
Deferred underwriting compensation		18,309,150			18,309,150

Total liabilities		20,953,309			19,074,899

Common stock subject to possible redemption; 47,512,924 and 47,663,155 shares at March 31, 2016 and December 31, 2015, respectively (at redemption value of $10.00 per share)		475,129,240			476,631,550

Stockholders' equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding		-			-
Common stock, $0.0001 par value; 200,000,000 shares authorized, 15,018,326 and 14,868,095 shares issued and outstanding (excluding 47,512,924 and 47,663,155 subject to possible redemption) at March 31, 2016 and December 31, 2015, respectively		1,501			1,486
Additional paid-in-capital		7,870,509			6,368,214
Accumulated deficit		(2,872,007	)		(1,369,698	)
Total stockholders' equity		5,000,003			5,000,002
Total liabilities and stockholders' equity	$	501,082,552		$	500,706,451

	For the Three Months Ended March 31, 2016			For the Three Months Ended March 31, 2015

Revenue	$	-		$	-
Professional fees and other expenses		(1,823,998	)		(165,820	)
State franchise taxes, other than income tax		(45,107	)		(43,890	)
Interest on Sponsor convertible note		(9,070	)		-
Interest on Sponsor promissory note		(32	)		-
Loss from operations		(1,878,207	)		(209,710	)
Other income - Interest income		375,898			83,095
Net loss attributable to common shares	$	(1,502,309	)	$	(126,615	)

Weighted average common shares outstanding, basic and
diluted (excluding shares subject to possible redemption)		14,869,747			14,834,975

Net loss per common share:	$	(0.10	)	$	(0.01	)
Basic and diluted

	Common Stock				Additional
					Paid-in		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balances, January 1, 2016		14,868,095	$	1,486	$	6,368,214	$	(1,369,698	)	$	5,000,002

Change in shares subject to possible redemption		150,231		15		1,502,295		—			1,502,310

Net loss for the period ended March 31, 2016		—		—		—		(1,502,309	)		(1,502,309	)
Balances, March 31, 2016		15,018,326	$	1,501	$	7,870,509	$	(2,872,007	)	$	5,000,003

	For the Three Months Ended March 31, 2016			For the Three Months Ended March 31, 2015
Cash flows from operating activities:
Net loss	$	(1,502,309	)	$	(126,615	)
Adjustments to reconcile net loss to net cash used in operations:
Increase in prepaid expenses		(10,016	)		(5,199	)
Decrease in accrued state franchise tax		(23,294	)		(95,722	)
Increase in accrued expenses		1,232,602			123,550
Accrued interest on Sponsor convertible note		9,070			-
Accrued interest on Sponsor promissory note		32			-
Amortization of original issue discount		(303,932	)		(83,081	)
Interest on investments		(71,966	)		(14	)
Net cash used in operating activities		(669,813	)		(187,081	)

Cash flows from financing activities:
Proceeds from Sponsor convertible note		425,000			-
Proceeds from Sponsor promissory note		235,000			-
Net cash provided by financing activities		660,000			-
Decrease in cash		(9,813	)		(187,081	)
Cash at beginning the period		10,000			801,415
Cash at end of the period	$	187		$	614,334

Supplemental disclosure of cash flow information
Cash paid for state franchise taxes	$	(68,401	)	$	(139,612	)

			Gross
	Carrying Amount		Unrealized
	March 31, 2016		Holding Gains		Fair Value
Held-to-maturity:
U.S. Treasury Securities (Maturity dates range from 4/28/16 to 5/19/16)	$	312,597,363	$	94,477	$	312,691,840

			Quoted Prices in		Significant Other		Significant Other
			Active Markets		Observable		Unobservable
Description	March 31, 2016		(Level 1)		Inputs (Level 2)		Inputs (Level 3)
Investments in treasury bills held in trust account		312,691,840		312,691,840		-		-
Investments in money market fund held in trust account		188,426,332		188,426,332		-		-
Total	$	501,118,172	$	501,118,172	$	-	$	-