Delaware | 6770 | 46-2891139 | ||||||||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Douglas S. Ellenoff, Esq. Stuart Neuhauser, Esq. Ellenoff Grossman & Schole LLP 150 East 42nd Street New York, New York 10017 (212) 370-1300 (212) 370-7889 — Facsimile | Mitchell S. Nussbaum, Esq. Giovanni Caruso, Esq. Loeb & Loeb LLP 345 Park Avenue New York, NY 10154 (212) 407-4866 (212) 937-3943 — Facsimile |
Large accelerated filero | Accelerated filero | Non-accelerated filer [X] (Do not check if a smaller reporting company) | Smaller reporting companyo |
Title of Each Class of Securities to be Registered | Amount to be Registered (1) | Proposed Maximum Offering Price per Unit (1) | Proposed Maximum Aggregate Offering Price (1) | Amount of Registration Fee | Amount to be Registered (1) | Proposed Maximum Offering Price per Unit (1) | Proposed Maximum Aggregate Offering Price (1) | Amount of Registration Fee | ||||||||||||||||||||||||||||
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Units, each consisting of one share of Common Stock, $.0001 par value, and one Warrant (2)(4) | 17,250,000 | $ | 10.00 | $ | 172,500,000 | $ | 23,529 | 17,250,000 | $ | 10.00 | $ | 172,500,000 | $ | 23,529 | ||||||||||||||||||||||
Shares of Common Stock included as part of the Units (2)(4) | 17,250,000 | — | — | — | (3) | 17,250,000 | — | — | — | (3) | ||||||||||||||||||||||||||
Warrants included as part of the Units (2)(4) | 17,250,000 | — | — | — | (3) | 17,250,000 | — | — | — | (3) | ||||||||||||||||||||||||||
Total | $ | 172,500,000 | $ | 23,529 | $ | 172,500,000 | $ | 23,529 | (5) |
(1) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). |
(2) | Includes 2,250,000 units, 2,250,000 shares of common stock and 2,250,000 warrants underlying such units, which may be issued on exercise of a 45-day option granted to the underwriters to cover overallotments, if any. |
(3) | No fee pursuant to Rule 457(g). |
(4) | Pursuant to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(5) | Previously paid. |
PRELIMINARY PROSPECTUS (Subject to Completion) | Dated |
Per Unit | Total | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Public offering price | $ | 10.00 | $ | 150,000,000 | ||||||||
Underwriting discount(1) | $ | 0.60 | $ | 9,000,000 | ||||||||
Proceeds, before expenses, to Quinpario Acquisition Corp. | $ | 9.40 | $ | 141,000,000 |
(1) | Includes $0.30 per unit, or approximately $4.5 million in the aggregate (approximately $5.175 million if the underwriters’ overallotment option is exercised in full), payable to C&Co/PrinceRidge LLC and Cantor Fitzgerald & Co. for deferred underwriting commissions to be placed in the trust account described below. Such funds will be released to C&Co/PrinceRidge LLC and Cantor Fitzgerald & Co. only on completion of an initial business combination, as described in this prospectus. See “Underwriting” beginning on page __. |
C&Co/PrinceRidge | |||
Cantor Fitzgerald & Co. |
Page | ||||||
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1 | ||||||
F-1 |
• | references to “we,” “us,” “company” or “our company” refer to Quinpario Acquisition Corp.; |
• | references to our “sponsor” refer to Quinpario Partners I, LLC, a Delaware limited liability company formed for the express purpose of acting as the sponsor of this offering. The managing member of our sponsor is Quinpario Partners LLC, and the managing member of Quinpario Partners LLC is our Chairman and Chief Executive Officer, Jeffry N. Quinn; |
• | references to “extension units” are to an aggregate of up to 225,000 extension units which may be purchased separately by our sponsor or its affiliates or designees in the event we are unable to consummate our initial business combination within 16 months of the date of this offering, each extension unit consisting of one extension share and one extension warrant; |
• | references to “founder shares” are to 6,208,333 shares of our common stock sold by us to our sponsor, which includes an aggregate of 750,000 founder shares that are subject to forfeiture to the extent that the overallotment option is not exercised by the underwriters, and up to 75,000 founder shares which are subject to forfeiture in the event that the extension units are not purchased; |
• | references to “initial holder” are to our sponsor, who is purchasing placement units in the private placement; |
• | references to our “initial stockholders” refer to our sponsor, our officers and, directors and certain of their respective affiliates that hold founder shares; |
• | references to our “management” or our “management team” refer to our officers and certain of our directors; |
• | references to our “public shares” are to shares of our common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); |
• | references to “public stockholders” refer to the holders of our public shares, which may include our initial stockholders and members of our management team if and to the extent our initial stockholders and/or members of our management team purchase public shares, provided that any of our initial stockholders’ and a member of management’s status as a “public stockholder” shall only exist with respect to such public shares; |
• | references to “private placement” refer to the private placement of 1,150,000 placement units being purchased by our sponsor, that will occur simultaneously with the consummation of this offering for a purchase price of $10.00 per placement unit for a total purchase price of $11,500,000; |
• | references to “placement units” are to an aggregate of 1,150,000 units being purchased separately by our sponsor in the private placement, each placement unit consisting of one placement share and one placement warrant; |
• | references to “placement shares” are to an aggregate of 1,150,000 shares of our common stock included within the placement units being purchased separately by our sponsor; and |
• | references to “placement warrants” are to warrants to purchase an aggregate of 1,150,000 shares of our common stock included within the placement units being purchased separately by our sponsor in the private placement. |
• | Opportunities for Platform Growth: We will seek to acquire one or more businesses or assets that we can grow both organically and through acquisitions. Particularly in regard to the specialty chemicals and performance materials industries, we may initially consider those sectors that complement our management team’s background, such as composites and carbon fibers, filtration and biomaterials, alternative energy and storage, specialty films and packaging, ceramics and inorganics, plastics and compounds, electronic chemicals and materials, specialty resins and plastics, chemicals and additives, and specialty fluids and lubricants. |
• | History of and Potential for Strong Free Cash Flow Generation: We will seek to acquire one or more businesses that have the potential to generate strong free cash flow (i.e., companies that typically generate cash in excess of that required to maintain or expand the business’s asset base). We will focus on one or more businesses that have recurring revenue streams and low working capital and capital expenditure requirements. We may also seek to prudently leverage this cash flow in order to enhance stockholder value. |
• | Established Companies with Proven Track Records: We will seek to acquire established companies, particularly those focused on industries connected to the specialty chemicals and performance materials industries with sound historical financial performance. We will typically focus on companies with a history of strong operating and financial results. Although we are not restricted from doing so, we do not intend to acquire start-up companies. |
• | Experienced and Motivated Management Teams: We will seek to acquire businesses that have strong, experienced management teams with a substantial personal economic stake in the performance of the acquired business. We will focus on management teams with a proven track record of driving revenue growth, enhancing profitability and generating strong free cash flow. We will focus on companies where we expect that the operating expertise of our officers and directors will complement the target’s management team. |
• | Strong Competitive Industry Position: We will seek to acquire businesses focused on the specialty chemicals and performance materials industries that have strong fundamentals, although we may acquire businesses in other industries. The factors we will consider include growth prospects, competitive dynamics and position, level of consolidation, need for capital investment, potential for improvement and barriers to entry. We will focus on companies that have a leading or niche market position. We will analyze the strengths and weaknesses of target businesses relative to their competitors, focusing on technology, global positioning, product quality and services, customer loyalty, cost impediments associated with customers switching to competitors, intellectual property protection and brand positioning. We will seek to acquire one or more businesses that demonstrate advantages or have the potential to become advantaged when compared to their competitors, which may help to protect their market position and profitability. |
Securities offered | 15,000,000 units, at $10.00 per unit, each unit consisting of: | |||||
• one share of common stock; and | ||||||
• one warrant. | ||||||
Proposed NASDAQ Capital Market symbols | Units: | |||||
Common Stock: | ||||||
Warrants: | ||||||
Trading commencement and separation of common stock and warrants | We anticipate the units will begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless C&Co/PrinceRidge, acting as representative of the underwriters, informs us of its decision to allow earlier separate trading, subject, in each case, to our having filed the Current Report on Form 8-K as described below and having issued a press release announcing when such separate trading will begin. | |||||
Separate trading of the common stock and warrants is prohibited until we have filed a Current Report on Form 8-K | In no event will our common stock and warrants be traded separately until we have filed a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds at the consummation of this offering. We will file the Current Report on Form 8-K promptly after the consummation of this offering, which is anticipated to take place four business days from the date of this prospectus. If the underwriters’ overallotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ overallotment option. | |||||
Units: | ||||||
Number of placement units outstanding before this offering | 0 | |||||
Number of placement units to be sold simultaneously with this offering | 1,150,000 | |||||
Number of units to be outstanding after this offering and the private placement | 16,150,000 |
Common stock: | ||||||
Number outstanding before this offering | 6,208,333(1)(2) | |||||
Number outstanding after this offering and private placement | 21,533,333(2)(3) | |||||
Warrants: | ||||||
Number of warrants outstanding before this offering | 0 | |||||
Number of warrants outstanding after this offering and private placement | 16,150,000(3)(4) | |||||
Exercisability | Each warrant offered in this offering is exercisable to purchase one share of our common stock. | |||||
Exercise price | $12.00 per share, subject to adjustments as described herein. | |||||
Exercise period | The warrants will become exercisable on the later of: | |||||
• 30 days after the consummation of our initial business combination, or | ||||||
• 12 months from the closing of this offering; | ||||||
provided that no warrants will be exercisable for cash unless we have an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock is available, and such shares are registered, qualified or exempt from registration under the securities laws of |
(1) | This number includes an aggregate of 750,000 founder shares that are subject to forfeiture to the extent that the overallotment option is not exercised by the underwriters, and up to 75,000 shares of common stock that are subject to forfeiture in the event that the extension units are not purchased. |
(2) | This number includes all founder shares in an aggregate amount equal to 25% of our issued and outstanding shares after this offering and the expiration of the underwriters’ overallotment option without exercise. The founder shares will not be released from transfer restrictions until the date (i) with respect to 20% of such shares, upon consummation of our initial business combination, (ii) with respect to 20% of such shares, when the closing price of our common stock exceeds $12.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination, (iii) with respect to 20% of such shares, when the closing price of our common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination, (iv) with respect to 20% of such shares, when the closing price of our common stock exceeds $15.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination and (v) with respect to 20% of such shares, when the closing price of our common stock exceeds $17.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination or earlier, in any case, if, following a business combination, we engage in a subsequent transaction (1) resulting in our shareholders having the right to exchange their shares for cash or other securities or (2) involving a consolidation, merger or other change in the majority of our board of directors or management team in which the company is the surviving entity. |
(3) | Assumes no exercise of the underwriters’ overallotment option and the resulting forfeiture of 750,000 founder shares as described in footnote (1), and assumes up to 75,000 shares of common stock are forfeited due to non-purchase of extension units. Our sponsor, Quinpario Partners I, LLC, has committed to purchase, simultaneously with the consummation of this offering, an aggregate of 1,150,000 private placement units, each unit consisting of one placement share and one placement warrant. Our initial stockholders and sponsor will hold 30.6% of the outstanding common stock following this offering and the expiration of the underwriters’ overallotment option. The placement units are not subject to forfeiture but will be subject to transfer restrictions as described in “Principal Stockholders — Transfers of Founder Shares, Placement Units and Extension Units (including securities contained therein)”). |
(4) | Includes 1,150,000 placement warrants included in the placement units. |
the state of residence of the holder. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants has not been declared effective by the 60th business day following the closing of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act. | ||||||
We are not registering the shares of common stock issuable upon exercise of the warrants at this time. However, we have agreed to use our best efforts to file and have an effective registration statement covering the shares of common stock issuable upon exercise of the warrants, to maintain a current prospectus relating to those shares of common stock until the earlier of the date the warrants expire or are redeemed and, the date on which all of the warrants have been exercised and to qualify the resale of such shares under state blue sky laws, to the extent an exemption is not available. | ||||||
The warrants will expire at 5:00 p.m., New York time, five years after the consummation of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account. | ||||||
Redemption of warrants | Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the placement 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, or the 30-day redemption period; and | ||||||
• if, and only if, the last sale price of our common stock (or the closing bid price of our common stock in the event the shares of common stock are not traded on any specific trading day) equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before we send the notice of redemption to the warrant holders. |
We will not redeem the warrants unless an effective registration statement covering the shares of common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares is available throughout the 30-day redemption period. | ||||||
None of the placement warrants will be redeemable by us so long as they are held by the initial holder, or their permitted transferees. | ||||||
Founder shares | Our sponsor purchased an aggregate of 6,208,333 founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. | |||||
The founder shares include an aggregate of 750,000 shares subject to forfeiture by our initial stockholders to the extent that the underwriters’ overallotment option is not exercised in full, and up to 75,000 shares of common stock that are subject to forfeiture in the event that the extension units are not purchased (or 37,500 founders shares per extension), so that our initial stockholders will own in the aggregate a number of shares equal to 25% of our issued and outstanding shares of common stock after this offering. | ||||||
The founder shares are identical to the shares of common stock included in the units being sold in this offering, except that: | ||||||
• the founder shares are subject to certain transfer restrictions, as described in more detail below, and | ||||||
• our initial stockholders have agreed: (i) to waive their redemption rights with respect to their founder shares, placement shares and public shares in connection with the consummation of a business combination and (ii) to waive their redemption rights with respect to their founder shares and placement shares if we fail to consummate a business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions). However, our initial stockholders will be entitled to redemption rights with respect to any public shares held by them if we fail to consummate a business combination within such time period. | ||||||
If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares, placement shares and any public shares held by them in favor of our initial business combination. |
Transfer restrictions on founder shares | Each of our initial stockholders have agreed, pursuant to letter agreements, not to transfer, assign or sell any of its founder shares (except to permitted transferees, as described herein under “Principal Stockholders — Transfers of Founders Shares, Placement Units and Extension Units (including securities contained therein)” until (i) with respect to 20% of such shares, upon consummation of our initial business combination, (ii) with respect to 20% of such shares, when the closing price of our common stock exceeds $12.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination, (iii) with respect to 20% of such shares, when the closing price of our common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination, (iv) with respect to 20% of such shares, when the closing price of our common stock exceeds $15.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination and (v) with respect to 20% of such shares, when the closing price of our common stock exceeds $17.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination or earlier, in any case, if, following a business combination, we engage in a subsequent transaction (1) resulting in our shareholders having the right to exchange their shares for cash or other securities or (2) involving a consolidation, merger or other change in the majority of our board of directors or management team in which the company is the surviving entity. | |||||
Placement Units and Extension Units | Our sponsor, Quinpario Partners I, LLC, has committed to purchase 1,150,000 placement units, each consisting of one share of common stock and one warrant to purchase one share of our common stock exercisable at $12.00, at a price of $10.00 per unit ($11.5 million in the aggregate) in a private placement that will occur simultaneously with the consummation of this offering. The purchase price of the placement units will be added to the proceeds from this offering to be held in the trust account. If we do not complete a business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), the proceeds from the sale of the placement units held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law). There will be no redemption rights or liquidating distributions with respect to our founder shares, placement shares, extension shares, if any, or warrants, which will expire worthless. |
In addition, if we anticipate that we may not be able to consummate our initial business combination within 16 months, we may extend the period of time to consummate a business combination twice, each by an additional four months, for an aggregate of eight additional months. In return, the sponsor would receive 112,500 extension units ($10.00 per unit), on the same terms as in the private placement that will occur simultaneously with the consummation of this offering. An aggregate of 225,000 extension units could be issued in connection with the two extensions. Neither our sponsor, nor any of its affiliates or designees, is obligated to purchase such units in order to extend the time for us to complete our initial business combination. The purchase price of the extension units will be added to the proceeds from this offering to be held in the trust account. If we do not complete a business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), the proceeds from the sale of the extension units held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law). There will be no redemption rights or liquidating distributions with respect to our founder shares, placement shares, extension shares, if any, or warrants, which will expire worthless. | ||||||
Transfer restrictions on placement units and extension units | The placement units, the extension units and the component securities contained therein will not be transferable, assignable or salable until 30 days after the consummation of our initial business combination and the placement warrants and the extension warrants will be non-redeemable so long as they are held by our sponsor or their affiliates or designees. If the placement units or extension units are held by someone other than the initial holder, or its permitted transferees, the placement warrants or extension warrants will be redeemable by us and exercisable by such holders on the same basis as the warrants included in the units being sold in this offering. |
Proceeds to be held in trust account | $155.25 million, or $10.35 per public share of the proceeds of this offering together with all the proceeds of the private placement of the placement units (approximately $177.075 million, or approximately $10.26 per share, if the underwriters’ overallotment option is exercised in full) will be placed in a segregated trust account at | |||||
We may increase the initial amount held in the trust account from approximately $10.35 per public share prior to the effectiveness of the registration statement of which this prospectus forms a part. In such case, we expect that the increase would be funded by an increase in the amount of the deferral by the underwriters of the underwriting commissions payable in connection with this offering, an increase in the number of placement units to be purchased by our sponsor at $10.00 per unit and/or a reduction from $1,100,000 of the amount initially available to us for working capital that is not held in the trust account. Public stockholders would own a smaller percentage of our outstanding common stock on a fully diluted basis to the extent that our sponsor purchases additional placement units. We do not intend to reduce the initial amount to be held in the trust account. |
Except for any interest income released to us for working capital purposes and to pay taxes or dissolution expenses, none of the funds held in trust will be released from the trust account until the earlier of (i) the consummation of our initial business combination; (ii) the expiration or termination of any tender offer conducted by us in connection with a proposed business combination not otherwise withdrawn; (iii) the redemption of our public shares if we are unable to consummate a business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), subject to applicable law; or (iv) otherwise upon our liquidation or in the event our board of directors resolves to liquidate the trust account and ceases to pursue the consummation of a business combination prior to the expiration of the 16 month (or extended) period (our board of directors may determine to liquidate the trust account prior to such expiration if it determines, in its business judgment, that it is improbable within the remaining time to identify an attractive business combination or satisfy regulatory and other business and legal requirements to consummate a business combination). The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders. | ||||||
Anticipated expenses and funding sources | Unless and until we complete our initial business combination, no proceeds held in the trust account, other than the interest earned on the funds held in the trust account, will be available for our use. We may pay our expenses only from: | |||||
• interest earned on the funds held in the trust account; and | ||||||
• the net proceeds of this offering not held in the trust account, which will be $1,100,000 in working capital after the payment of approximately $650,000 in expenses relating to this offering (not including underwriting discounts). |
Conditions to consummating our initial business combination | There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Subject to the Nasdaq requirement that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. We intend to consummate our initial business combination only if we (or any entity that is a successor to us in a business combination) will acquire a majority of the outstanding voting securities or assets of the target with the objective of making sure that we are not required to register as an investment company under the Investment Company Act, based on the fact that less than 40% of our assets will be defined as investment securities under the provisions of that statute. Even though we (or our stockholders, if we are not the surviving corporation) will own a majority interest in the target, our stockholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. |
Permitted purchases of public shares by us or our affiliates | If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, we may enter into privately negotiated transactions to purchase public shares from stockholders following consummation of the initial business combination with proceeds released to us from the trust account immediately following consummation of the initial business combination. Our initial stockholders, directors, officers or their affiliates may also purchase shares in privately negotiated transactions either prior to or following the consummation of our initial business combination. Neither we nor our directors, officers, advisors or their affiliates will make any such purchases when we or they are in possession of any material nonpublic information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act or in transactions which would violate Section 9(a)(2) or Rule 10(b)-5 under the Exchange Act. Although neither we nor they currently anticipate paying any premium purchase price for such public shares, in the event we or they do, the payment of a premium may not be in the best interest of those stockholders not receiving any such additional consideration. In addition, the payment of a premium by us after the consummation of our initial business combination may not be in the best interest of the remaining stockholders who do not redeem their shares, because such stockholders will experience a reduction in book value per share compared to the value received by stockholders that have their shares purchased by us at a premium. Except for the limitations described above on use of trust proceeds released to us prior to consummating our initial business combination, there is no limit on the number of shares that could be acquired by us or our affiliates, or the price we or they may pay, if we hold a stockholder vote. However, we will not make any such purchase if the effect thereof would reduce the per share amount in the trust account to less than $10.35 per share ($10.26 if the underwriters’ overallotment option is exercised in full). |
Redemption rights for public stockholders upon consummation of our initial business combination | We will provide our stockholders with the opportunity to redeem their shares of common stock upon the consummation of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes or the payment of taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.35 per public share (or approximately $10.26 per public share if the underwriters’ overallotment option is exercised in full). There will be no redemption rights upon the consummation of our initial business combination with respect to our warrants. Our initial stockholders have agreed to waive their redemption rights with respect to any public shares they may acquire following this offering, in connection with a tender offer or stockholder vote. Each of our initial stockholders have agreed to waive its redemption rights with respect to the founder shares and placement shares (i) in connection with the consummation of a business combination, (ii) if we fail to consummate our initial business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), (iii) in connection with an expired or unwithdrawn tender offer, and (iv) upon our liquidation prior to the expiration of the 16 month (or extended) period. | |||||
Manner of conducting redemptions | Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and related redemptions of public shares for cash upon consummation of such initial business combinations, even when a vote is not required by law or Nasdaq, if a stockholder vote is not required by law or Nasdaq and we do not decide to hold a stockholder vote for business or other reasons, we may, pursuant to our amended and restated certificate of incorporation: | |||||
• conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of the proposed business combination, and |
• file tender offer documents with the SEC prior to consummating our initial business combination that contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. | ||||||
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem shall remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to consummate our initial business combination until the expiration of the tender offer period. | ||||||
If, however, stockholder approval of the transaction is required by law or Nasdaq, or we decide to obtain stockholder approval for business or other reasons, we will: | ||||||
• conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and | ||||||
• file proxy materials with the SEC. | ||||||
If we seek stockholder approval, we will consummate our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. In such case, our initial stockholders have agreed to vote their founder shares, placement shares and any public shares held by them in favor of our initial business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses, and subject to certain volume limitations described herein. |
Many blank check companies would not be able to consummate a business combination if the holders of the company’s public shares voted against a proposed business combination and elected to redeem or convert more than a specified percentage of the shares sold in such company’s initial public offering, which percentage threshold has typically been between 19.99% and 39.99%. As a result, many blank check companies have been unable to complete business combinations because the number of shares voted against the initial business combination by their public stockholders electing conversion exceeded the maximum conversion threshold pursuant to which such company could proceed with a business combination. Since we have no specified maximum percentage threshold for redemption in our amended and restated certificate of incorporation and since even those public stockholders who vote in favor of our initial business combination have the right to redeem their public shares, our structure is different in this respect from the structure that has been used by many blank check companies. This may make it easier for us to consummate our initial business combination. However, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 and the terms of the proposed business combination may require our net tangible assets to be greater than $5,000,001. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or members of its management team, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the allocation of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly tendered plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not consummate the business combination and any shares of common stock tendered pursuant to the tender offer will be returned to the holders thereof following the expiration of the tender offer. Additionally, since we are required to maintain net tangible assets of at least $5,000,001 (which may be substantially higher depending on the terms of our potential business combination), the chance that the holders of our common stock electing to redeem in connection with a redemption conducted pursuant to the proxy rules will cause us to fall below such minimum requirement is increased. |
Limitation on redemption rights of stockholders holding | Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of | |||||
We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of |
Release of funds in trust account on closing of our initial business combination | On the closing of our initial business combination, all amounts held in the trust account will be released to us. We will use these funds to pay amounts due to any public stockholders who exercise their redemption rights as described above under “Redemption rights for public stockholders upon consummation of our initial business combination” and to pay C&Co/PrinceRidge LLC and Cantor Fitzgerald & Co. their deferred underwriting discounts. Funds released from the trust account to us can be used to pay all or a portion of the purchase price of the business or businesses we acquire in our initial business combination. If our initial business combination is paid for using stock or debt securities, or not all of the funds released from the trust account are used for payment of the purchase price in connection with our business combination, we may apply the cash released to us from the trust account that is not applied to the purchase price as described above and for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating the initial business combination, to fund the purchase of other companies or for working capital. |
Redemption of public shares and distribution and liquidation if no initial business combination | Our initial stockholders, officers and directors have agreed that we will have only 16 months from the consummation of this offering to consummate our initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 16 months, we may extend the period of time to consummate a business combination twice, each by an additional four months, for an aggregate of eight additional months. In order to extend the time available for us to consummate our initial business combination, our sponsor, or its affiliates or designees, would deposit an aggregate of $1.125 million (or approximately $0.075 per public share, or $0.065 per public share if the overallotment is exercised in full) for each four month extension into the trust account prior to the applicable deadline. In return, they would receive 112,500 extension units ($10.00 per unit), on the same terms as in the private placement that will occur simultaneously with the consummation of this offering. An aggregate of 225,000 extension units could be issued in connection with the two extensions. Neither our sponsor, nor any of its affiliates or designees, is obligated to purchase such units in order to allow us to extend the time for us to complete our initial business combination. If we are unable to consummate our initial business combination within the above time periods, we will distribute the aggregate amount then on deposit in the trust account, pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. If we have not consummated a business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), or earlier, at the discretion of our board pursuant to the expiration of a tender offer conducted in connection with a failed business combination, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem all public shares then outstanding at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses (although we expect all or substantially all of such interest to be used for working capital purposes), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable |
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our founder shares, placement shares, extension shares, if any, or warrants, which will expire worthless if we fail to consummate our initial business combination within the 16 month (or extended) time period. | ||||||
Each of our initial stockholders and initial holder has agreed to waive its redemption rights with respect to the founder shares and placement shares (i) in connection with the consummation of a business combination, (ii) if we fail to consummate our initial business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), (iii) in connection with an expired or unwithdrawn tender offer, and (iv) upon our liquidation prior to the expiration of the 16 month (or extended) period. However, if our initial stockholders should acquire public shares, they will be entitled to redemption rights with respect to such public shares if we fail to consummate a business combination within the required time period. C&Co/PrinceRidge LLC and Cantor Fitzgerald & Co. have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate a business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions) and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares. | ||||||
Limited payments to insiders | There will be no finder’s fees, reimbursements or cash payments made to our initial stockholders, officers, directors, or our or their affiliates for services rendered to us prior to or in connection with the consummation of our initial business combination, other than: | |||||
• Repayment of up to $250,000 in loans made to us by Quinpario Partners LLC, an affiliate of our sponsor to cover offering-related and organizational expenses; | ||||||
• A payment of an aggregate of $10,000 per month to Quinpario Partners LLC, an affiliate of our sponsor, for office space, secretarial and administrative services; |
• Reimbursement for any out-of-pocket expenses related to identifying, investigating and consummating an initial business combination, provided that no proceeds of this offering held in the trust account may be applied to the payment of such expenses prior to the consummation of a business combination; and | ||||||
• Repayment of incremental loans made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, provided that if we do not consummate an initial business combination, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. | ||||||
Our independent directors will approve all payments in excess of $5,000 to be made to our initial stockholders, officers, directors or our or their affiliates. | ||||||
Audit Committee | Effective on the consummation of this offering, we will have an audit committee which will be composed of three independent directors to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information see the section entitled “Management — Committees of the Board of Directors — Audit Committee.” |
As of June 4, 2013 | As of June 4, 2013 | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual | As Adjusted | Actual | As Adjusted | |||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||
Working capital (deficiency) | $ | (51,379 | ) | $ | 151,861,121 | $ | (51,379 | ) | $ | 151,861,121 | (1) | |||||||||||
Total assets | 87,500 | 156,361,121 | 87,500 | 156,361,121 | (2) | |||||||||||||||||
Total liabilities | 76,379 | 4,500,000 | 76,379 | 4,500,000 | (3) | |||||||||||||||||
Value of common stock that may be redeemed in connection with our initial business combination (approximately $10.35 per share) | — | 146,861,108 | — | 146,861,108 | (4) | |||||||||||||||||
Stockholders’ equity | 11,121 | 5,000,013 | 11,121 | 5,000,013 | (5) |
(1) | The “as adjusted” calculation includes $155,250,000 cash held in trust from the proceeds of this offering plus $1,100,000 in cash held outside the trust account, plus $11,121 of actual shareholder’s equity at June 4, 2013, less $4,500,000 of deferred underwriting commissions. |
(2) | The “as adjusted” calculation equals $155,250,000 cash held in trust from the proceeds of this offering, plus $1,100,000 in cash held outside the trust account, plus $11,121 of actual shareholder’s equity at June 4, 2013. |
(3) | The “as adjusted” calculation includes $4,500,000 of deferred underwriting commissions. |
(4) | The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the “as adjusted” stockholders’ equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001. |
(5) | Excludes 14,189,479 shares of common stock purchased in the public market which are subject to redemption in connection with our initial business combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of common stock that may be redeemed in connection with our initial business combination (approximately $10.35 per share). |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, |
• | registration as an investment company; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
• | may significantly dilute the equity interest of investors in this offering; |
• | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change in control if a substantial number of shares of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our units, common stock and/or warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
• | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | solely dependent upon the performance of a single business, property or asset, or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | rules and regulations or currency conversion or corporate withholding taxes on individuals; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | crime, strikes, riots, civil disturbances, terrorist attacks and wars; and |
• | deterioration of political relations with the United States. |
• | the history and prospects of companies whose principal business is the acquisition of other companies; |
• | prior offerings of those companies; |
• | our prospects for acquiring an operating business at attractive values; |
• | a review of debt to equity ratios in leveraged transactions; |
• | our capital structure; |
• | an assessment of our management and their experience in identifying operating companies; |
• | general conditions of the securities markets at the time of this offering; and |
• | other factors as were deemed relevant. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | our ability to complete our initial business combination; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
• | our potential ability to obtain additional financing to complete our initial business combination; |
• | our pool of prospective target businesses; |
• | failure to maintain the listing on, or the delisting of our securities from, Nasdaq or an inability to have our securities listed on Nasdaq or another national securities exchange following our initial business combination; |
• | the ability of our officers and directors to generate a number of potential investment opportunities; |
• | our public securities’ potential liquidity and trading; |
• | the lack of a market for our securities; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or |
• | our financial performance following this offering. |
Without Overallotment Option | Overallotment Option Exercised in Full | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Gross proceeds | ||||||||||
Proceeds from units offered to the public | $ | 150,000,000 | $ | 172,500,000 | ||||||
Proceeds from private placement | 11,500,000 | 11,500,000 | ||||||||
Total gross proceeds | $ | 161,500,000 | $ | 184,000,000 | ||||||
Estimated offering expenses(1) | ||||||||||
Underwriting commissions (3.0% of gross proceeds from units offered to public, excluding deferred portion)(2) | $ | 4,500,000 | $ | 5,175,000 | ||||||
Legal fees and expenses | 200,000 | 200,000 | ||||||||
Printing and engraving expenses | 45,000 | 45,000 | ||||||||
Accounting fees and expenses | 45,000 | 45,000 | ||||||||
SEC fees | 23,529 | 23,529 | ||||||||
FINRA fees | 26,375 | 26,375 | ||||||||
Nasdaq Capital Market Listing Fees | 75,000 | 75,000 | ||||||||
Travel and roadshow | 30,000 | 30,000 | ||||||||
Directors and officers insurance | 175,000 | 175,000 | ||||||||
Miscellaneous expenses | 30,096 | 30,096 | ||||||||
Total offering expenses | $ | 5,150,000 | $ | 5,825,000 | ||||||
Proceeds after offering expenses | 156,350,000 | 178,175,000 | ||||||||
Held in trust account | $ | 155,250,000 | $ | 177,075,000 | ||||||
% of public offering proceeds held in trust(3) | 103.5 | % | 102.6 | % | ||||||
Not held in trust account | $ | 1,100,000 | $ | 1,100,000 |
Amount | Percentage | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Use of net proceeds not held in trust and approximate amounts available from interest income earned on the trust account(4) | ||||||||||
Due diligence (excluding accounting and legal due diligence) of prospective target(s) | $ | 150,000 | 13 | % | ||||||
Legal and accounting expenses attendant to the due diligence investigations, structuring and negotiations of an initial business combination | 500,000 | 44 | % | |||||||
Legal and accounting fees relating to SEC reporting obligations | 150,000 | 13 | % | |||||||
Administrative services and support payable to an affiliate of our sponsor (up to $10,000 per month for up to 16 months) | 160,000 | 14 | % | |||||||
Reserve for liquidation expenses | 30,000 | 3 | % | |||||||
Nasdaq continued listing fees | 64,000 | 6 | % | |||||||
Other miscellaneous expenses | 76,000 | 7 | % | |||||||
Total | $ | 1,130,000 | 100 | % |
(1) | In addition, a portion of the offering expenses have been prepaid from the proceeds of up to $250,000 of loans from Quinpario Partners LLC, an affiliate of our sponsor, as described in this prospectus. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses. |
(2) | C&Co/PrinceRidge LLC and Cantor Fitzgerald & Co. have agreed to defer approximately $4.5 million of their underwriting commissions (or approximately $5.175 million if the underwriters’ overallotment option is exercised in full), which equals 3.0% of the gross proceeds from the units offered to the public, until consummation of our initial business combination. Upon consummation of our initial business combination, approximately $4.5 million, which constitutes the underwriters’ deferred commissions (or approximately $5.175 million if the underwriters’ overallotment option is exercised in full) will be paid to C&Co/PrinceRidge LLC and Cantor Fitzgerald & Co. from the funds held in the trust account, and the remaining funds will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. |
(3) | All of the proceeds of the private placement and a portion of the net proceeds of the offering (being $155,250,000 of the net proceeds from this offering, including deferred underwriting commissions of approximately $4.5 million (or $177,075,000 of the net proceeds from this offering, including deferred underwriting commissions of approximately $5.175 million, if the underwriters’ overallotment option is exercised in full)), will be placed in a trust account at |
(4) | These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount of interest available to us from the trust account may be less than expected as a result of the current interest rate environment. Based on the current interest rate environment, we would expect approximately $30,000 (after payment of taxes owed on such interest income) to be available to us from interest earned on the funds held in the trust account over 16 months following the closing of this offering; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.02% per annum based upon current yields of securities in which the trust account may be invested. |
Public offering price | $ | 10.00 | ||||||||
Net tangible book value before this offering | $ | (0.01 | ) | |||||||
Increase attributable to new investors | 0.69 | |||||||||
Pro forma net tangible book value after this offering | .68 | |||||||||
Dilution to new investors | $ | 9.32 |
Total shares(1) | Total consideration | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number | % | Amount | % | Average price per share(1) | ||||||||||||||||||
Initial stockholders (founder shares) | 5,383,333 | 25 | % | $ | 25,000 | 0 | % | $ | .005 | |||||||||||||
Placement shares | 1,150,000 | 5 | % | 11,500,000 | 7 | % | $ | 10.00 | ||||||||||||||
Public stockholders | 15,000,000 | 70 | % | 150,000,000 | 93 | % | $ | 10.00 | ||||||||||||||
Total | 21,533,333 | 100 | % | $ | 161,525,000 | 100 | % |
(1) | Assumes no exercise of the underwriters’ overallotment option and corresponding forfeiture of 750,000 founder shares by our initial stockholders as a result thereof, and assumes forfeiture of up to 75,000 shares of common stock due to non-purchase of the extension units. |
(2) | Assumes no value is attributed to the placement warrants contained in the placement units. |
Numerator: | ||||||
Net tangible book value before this offering | $ | (51,379 | ) | |||
Net proceeds from this offering and sale of placement units | 156,350,000 | |||||
Offering costs incurred in advance that are reflected to derive at net proceeds from this offering and sale of placement units and excluded from net tangible book value before this offering | 62,500 | |||||
Less: Deferred underwriting commission | (4,500,000 | ) | ||||
Less: Proceeds held in the trust account which may be redeemed for cash | (146,861,108 | ) | ||||
$ | 5,000,013 | (2) | ||||
Denominator: | ||||||
Shares of common stock outstanding prior to this offering | 6,208,333 | |||||
Less: Shares subject to forfeiture assuming no overallotment option exercised and extension units not purchased(1) | (825,000 | ) | ||||
Shares of common stock included in the units offered | 15,000,000 | |||||
Placement units issued | 1,150,000 | |||||
Less: Shares subject to redemption to maintain net tangible assets of $5,000,001(2) | (14,189,479 | ) | ||||
7,343,854 |
(1) | Assumes no exercise of the underwriters’ overallotment option and that 750,000 shares of common stock have been forfeited by our initial stockholders as a result thereof, and assumes forfeiture of up to 75,000 shares of common stock due to non-purchase of the extension units. |
(2) | Assumes no value is attributed to the placement warrants contained in the placement units. |
June 4, 2013 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual | As Adjusted(1) | ||||||||||
Deferred underwriting commissions | $ | — | $ | 4,500,000 | |||||||
Notes payable(2) | 51,379 | — | |||||||||
Common stock, subject to redemption(3) | — | 146,861,108 | |||||||||
Stockholder’s equity (deficit): | |||||||||||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued or outstanding | — | — | |||||||||
Common stock, $0.0001 par value, 43,000,000 shares authorized; 6,208,333 shares issued and outstanding; 7,343,854 shares issued and outstanding (excluding 14,189,479 shares subject to redemption), as adjusted | 621 | 734 | |||||||||
Additional paid-in capital | 24,379 | 4,999,279 | |||||||||
Deficit accumulated during the development stage | (13,879 | ) | — | ||||||||
Total stockholders’ equity | 11,121 | 5,000,013 | |||||||||
Total capitalization | $ | 62,500 | $ | 156,361,121 |
(1) | Includes the $11.5 million we will receive from the sale of the placement units. |
(2) | Notes payable collectively reflect advances in the amount shown in the table as of June 4, 2013 to an affiliate of our sponsor. The note is non-interest bearing and is payable on the earlier of December 31, 2013 or the consummation of this offering. |
(3) | Upon the consummation of our initial business combination, we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes or the payment of taxes, subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 and any limitations (including but not limited to cash requirements) created by the terms of the proposed business combination. Each of our initial stockholders and our initial holder has agreed with respect to the founder shares and the placement shares contained within the placement units to waive their respective redemption rights (i) in connection with the consummation of our initial business combination, (ii) if we fail to consummate our initial business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), (iii) in connection with an expired or unwithdrawn tender offer, and (iv) upon our liquidation prior to the expiration of the 16 month (or extended) period. |
(4) | Assumes the overallotment option has not been exercised and a corresponding forfeiture of an aggregate of 750,000 founder shares held by our initial stockholders, and assumes up to 75,000 shares of common stock are forfeited due to non-purchase of the extension units. |
• | may significantly dilute the equity interest of investors in this offering; |
• | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights or a person seeking to obtain control of us; and |
• | may adversely affect prevailing market prices for our common stock and/or warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
• | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | staffing for financial, accounting and external reporting areas, including segregation of duties; |
• | reconciliation of accounts; |
• | proper recording of expenses and liabilities in the period to which they relate; |
• | evidence of internal review and approval of accounting transactions; |
• | documentation of processes, assumptions and conclusions underlying significant estimates; and |
• | documentation of accounting policies and procedures. |
• | Opportunities for Platform Growth: We will seek to acquire one or more businesses or assets that we can grow both organically and through acquisitions. Particularly in regard to the specialty chemicals and performance materials industries, we may initially consider those sectors that complement our management team’s background, such as composites and carbon fibers, filtration and biomaterials, alternative energy and storage, specialty films and packaging, ceramics and inorganics, plastics and compounds, electronic chemicals and materials, specialty resins and plastics, chemicals and additives, and specialty fluids and lubricants. |
• | History of and Potential for Strong Free Cash Flow Generation: We will seek to acquire one or more businesses that have the potential to generate strong free cash flow (i.e., companies that typically generate cash in excess of that required to maintain or expand the business’s asset base). We will focus on one or more businesses that have recurring revenue streams and low working capital and capital expenditure requirements. We may also seek to prudently leverage this cash flow in order to enhance stockholder value. |
• | Established Companies with Proven Track Records: We will seek to acquire established companies, particularly those focused on industries connected to the specialty chemicals and performance materials industries with sound historical financial performance. We will typically focus on companies with a history of strong operating and financial results. Although we are not restricted from doing so, we do not intend to acquire start-up companies. |
• | Experienced and Motivated Management Teams: We will seek to acquire businesses that have strong, experienced management teams with a substantial personal economic stake in the performance of the acquired business. We will focus on management teams with a proven track record of driving revenue growth, enhancing profitability and generating strong free cash flow. We will focus on companies where we expect that the operating expertise of our officers and directors will complement the target’s management team. |
• | Strong Competitive Industry Position: We will seek to acquire businesses focused on the specialty chemicals and performance materials industries that have strong fundamentals, although we may acquire businesses in other industries. The factors we will consider include growth prospects, competitive dynamics and position, level of consolidation, need for capital investment, potential for improvement and barriers to entry. We will focus on companies that have a leading or niche market position. We will analyze the strengths and weaknesses of target businesses relative to their competitors, focusing on technology, global positioning, product quality and services, customer loyalty, cost impediments associated with customers switching to competitors, intellectual property protection and brand positioning. We will seek to acquire one or more businesses that demonstrate advantages or have the potential to become advantaged when compared to their competitors, which may help to protect their market position and profitability. |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
Type of Transaction | Whether Stockholder Approval is Required | |||||
---|---|---|---|---|---|---|
Purchase of assets | No | |||||
Purchase of stock of target not involving a merger with the company | No |
Type of Transaction | Whether Stockholder Approval is Required | |||||
---|---|---|---|---|---|---|
Merger of target into a subsidiary of the company | No | |||||
Merger of the company with a target | Yes |
• | the funds in our trust account that are so used will not be available to us after the business combination; |
• | the public “float” of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to obtain the continued listing of our securities on Nasdaq or another national securities exchange in connection with our initial business combination; |
• | because the stockholders who sell their shares in a privately negotiated transaction may receive a per share purchase price payable from the trust account that is not reduced by a pro rata share of the |
deferred underwriting commissions or franchise or income taxes payable, our remaining stockholders may bear the entire payment of such deferred commissions and franchise or income taxes payable. That is, if we seek stockholder approval of our initial business combination, the redemption price per share payable to public stockholders who elect to have their shares redeemed will be reduced by a larger percentage of the franchise or income taxes payable than it would have been in the absence of such privately negotiated transactions, and stockholders who do not elect to have their shares redeemed and remain our stockholders after the business combination will bear the economic burden of the deferred commissions and franchise or income taxes payable because such amounts will be payable by us; and |
• | the payment of any premium would result in a reduction in book value per share for the remaining stockholders compared to the value received by stockholders that have their shares purchased by us at a premium. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of the proposed business combination, and |
• | file tender offer documents with the SEC prior to consummating our initial business combination that will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
• | file proxy materials with the SEC. |
Redemptions in Connection with our Initial Business Combination | Other Permitted Purchases of Public Shares by us or our Affiliates | Redemptions if we fail to Consummate an Initial Business Combination | ||||||||||||
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Calculation of redemption price | Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be approximately $10.35 per public share, or approximately $10.26 per public share if the underwriters’ overallotment option is exercised in full), including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes or the payment of taxes, divided by the number of then outstanding public shares; subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. | If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, we may enter into privately negotiated transactions to purchase public shares from stockholders following consummation of the initial business combination with proceeds released to us from the trust account immediately following consummation of the initial business combination. There is no limit to the prices that we or our initial stockholders, directors, officers or their affiliates may pay in these transactions. | If we are unable to consummate an initial business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be approximately $10.35 per public share, or approximately $10.26 per public share if the underwriters’ overallotment option is exercised in full), including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses divided by the number of then outstanding public shares. |
Redemptions in Connection with our Initial Business Combination | Redemptions if we fail to Consummate an Initial Business Combination | |||||||||||||
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In order to extend the time available for us to consummate our initial business combination, our sponsor, or its affiliates or designees, would deposit an aggregate of $1.125 million (or approximately $0.075 per public share, or $0.065 per public share if the overallotment is exercised in full) for each four month extension into the trust account prior to the applicable deadline. In return, they would receive 112,500 extension units ($10.00 per unit), on the same terms as in the private placement consummated that will occur simultaneously with the consummation of this offering. An aggregate of 225,000 extension units could be issued in connection with the two extensions. Neither our sponsor, nor any of its affiliates or designees, is obligated to purchase such units in order to allow us to extend the time for us to complete our initial business combination. | In order to extend the time available for us to consummate our initial business combination, our sponsor, or its affiliates or designees, would deposit an aggregate of $1.125 million (or approximately $0.075 per public share, or $0.065 per public share if the overallotment is exercised in full) for each four month extension into the trust account prior to the applicable deadline. In return, they would receive 112,500 extension units ($10.00 per unit), on the same terms as in the private placement consummated that will occur simultaneously with the consummation of this offering. An aggregate of 225,000 extension units could be issued in connection with the two extensions. Neither our sponsor, nor any of its affiliates or designees, is obligated to purchase such units in order to allow us to extend the time for us to complete our initial business combination. |
Redemptions in Connection with our Initial Business Combination | Other Permitted Purchases of Public Shares by us or our Affiliates | Redemptions if we fail to Consummate an Initial Business Combination | ||||||||||||
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Impact to remaining stockholders | The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and franchise and income taxes payable. | If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, we may enter into privately negotiated transactions to purchase public shares from stockholders following consummation of the initial business combination. If the permitted purchases described above are made at prices not exceeding the per-share amount then held in the trust account, these purchases will reduce the book value per share for our remaining stockholders following a business combination, who will bear the burden of the deferred underwriting commissions and franchise and income taxes payable. If we make these purchases using funds released to us from the trust account following consummation of a business combination at prices that are at a premium to the per-share amount then held in the trust account, our remaining stockholders will also experience a reduction in book value per share to the extent of such premiums. | The redemption of our public shares if we fail to consummate a business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions. |
Terms of Our Offering | Terms Under a Rule 419 Offering | |||||||||
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Escrow of offering proceeds | Approximately $155.25 million of the net offering proceeds, which includes a portion of the approximately $11.5 million net proceeds from the sale of 1,150,000 placement units to the sponsor and approximately $4.5 million in deferred underwriting commissions (approximately $5.175 million if the underwriters’ overallotment option is exercised in full), will be deposited into a trust account in the United States with Continental Stock Transfer & Trust Company, acting as trustee. | Approximately $150.00 million of the offering proceeds, representing the gross proceeds of this offering, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account. | ||||||||
Investment of net proceeds | Approximately $155.25 million of the net offering proceeds, which includes a portion of the approximately $11.5 million net proceeds from the sale of 1,150,000 placement units and approximately $4.5 million in deferred underwriting commissions (approximately $5.175 million if the underwriters’ overallotment option is exercised in full) held in trust will be invested only in United States government treasury bills with a maturity of 180 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. | Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. | ||||||||
Receipt of interest on escrowed funds | We will be entitled to withdraw interest income earned on the funds in the escrow account for working capital purposes, the payment of franchise taxes, income taxes or dissolution expenses. Our stockholders will have no right to receive any pro-rata portion of interest income earned on the proceeds held in the trust account released to us. | Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our consummation of a business combination. |
Terms of Our Offering | Terms Under a Rule 419 Offering | |||||||||
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Trading of securities issued | The units will begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading on the 52 nd day following the date of this prospectus unless C&Co/PrinceRidge, acting as representative of the underwriters, informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the consummation of this offering, which is anticipated to take place four business days from the date of this prospectus. If the overallotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the overallotment option. | No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account. | ||||||||
Exercise of the warrants | The warrants cannot be exercised until the later of 30 days after the consummation of our initial business combination or 12 months from the consummation of this offering. | The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account. | ||||||||
Election to remain an investor | We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses, upon the consummation of our initial business combination, subject to the limitations described herein and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. We may not be required by law or Nasdaq to hold a stockholder vote. If we are not required by law or Nasdaq and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC | A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45 th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued. |
Terms of Our Offering | Terms Under a Rule 419 Offering | |||||||||
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which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will consummate our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest but less interest withdrawn for working capital purposes, to pay taxes or dissolution costs. In addition, our initial stockholders have agreed to waive their redemption rights with respect to their founder shares, placement shares and public shares in connection with the consummation of our initial business combination. Our initial stockholders and initial holder have each agreed to waive their redemption rights with respect to its placement shares in connection with the consummation of our initial business combination and if we fail to consummate our initial business combination within 16 months from date of this prospectus (or up to 24 months in the event of extensions). | ||||||||||
Business combination deadline | If we are unable to complete a business combination within 16 months from date of this prospectus (or up to 24 months in the event of extensions), we shall: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses, divided by the number of then outstanding public | If an acquisition has not been consummated within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors. |
Terms of Our Offering | Terms Under a Rule 419 Offering | |||||||||
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shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. | ||||||||||
Release of funds | Except for interest income earned on the trust account balance that is released to us, none of the funds held in trust will be released from the trust account until the earlier of (i) the consummation of our initial business combination; (ii) the expiration or termination of any tender offer conducted by us in connection with a proposed business combination not otherwise withdrawn; (iii) the redemption of our public shares if we are unable to consummate a business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), subject to applicable law; or (iv) otherwise upon our liquidation or in the event our board of directors resolves to liquidate the trust account and ceases to pursue the consummation of a business combination prior to the expiration of the 16 month (or up to 24 months if extended) period. | The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time. |
Name | Age | Title | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jeffry N. Quinn | 54 | President, Chief Executive Officer and Chairman of the Board of Directors | ||||||||
Paul J. Berra III | 44 | Vice President, General Counsel and Secretary | ||||||||
A. Craig Ivey | 55 | Vice President, Operations | ||||||||
Nadim Z. Qureshi | 38 | Vice President and Chief Strategy Officer | ||||||||
D. John Srivisal | 34 | Vice President and Chief Financial Officer | ||||||||
James P. Heffernan | 67 | Director* | ||||||||
Edgar G. Hotard | 69 | Director* | ||||||||
Walter Thomas Jagodinski | 56 | Director* | ||||||||
Dr. John Rutledge | 64 | Director* | ||||||||
Ilan Kaufthal | 65 | Director* |
* | This individual has indicated his assent to occupy such position upon the closing of this offering. |
• | reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K; |
• | discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
• | discussing with management major risk assessment and risk management policies; |
• | monitoring the independence of the independent auditor; |
• | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
• | reviewing and approving all related-party transactions; |
• | inquiring and discussing with management our compliance with applicable laws and regulations; |
• | pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; |
• | appointing or replacing the independent auditor; |
• | determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and |
• | approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
• | the corporation could financially undertake the opportunity; |
• | the opportunity is within the corporation’s line of business; and |
• | it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Individual | Entity | Affiliation | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jeffry N. Quinn | Tronox Limited | Director | ||||||||
Ferro Corporation | Director | |||||||||
W.R. Grace & Co. | Director |
James P. Heffernan | United Natural Foods, Inc. | Director | |||||||||
Command Security Corp. | Director | ||||||||||
Edgar G. Hotard | HAO Capital | Operating Partner | |||||||||
ARCH Venture Partners | Venture Partner | ||||||||||
SIAD Engineering (Hangzhou) Co. Ltd. | Executive Chairman | ||||||||||
Baosteel Metals | Director | ||||||||||
SIAD Macchine Impianti S.p.A. | Director | ||||||||||
Walter Thomas Jagodinski | Lindsay Corporation | Director | |||||||||
Phosphate Holdings, Inc. | Chairman | ||||||||||
Dr. John Rutledge | Rutledge Capital | Chairman | |||||||||
Safanad SA | Chief Investment Strategist | ||||||||||
Ilan Kaufthal | East Wind Advisors | Chairman | |||||||||
Irving Place Capital | Senior Advisor | ||||||||||
Cambrex Corporation | Director | ||||||||||
Blythe, Inc. | Director | ||||||||||
Tronox Limited | Director |
• | None of our officers and directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. |
• | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management’s other affiliations, see “— Directors and Executive Officers.” |
• | Our sponsor, Quinpario Partners I, LLC, has committed to purchase 1,150,000 placement units at the price of $10.00 per unit, in a private placement that will occur simultaneously with the consummation of this offering, and may purchase up to an addition 225,000 extension units in the event we do not consummate our initial business combination within 16 months of this offering. Each of holders of the founder shares, placement shares and extension shares have agreed in letter agreements that such shares will be subject to |
limited exceptions (as described in more detail below under “Principal Stockholders — Transfers of Founder Shares, Placement Units and Extension Units (including securities contained therein) ”), the founder shares, placement units, extension units and their underlying securities will not be transferable, assignable or salable (i) in the case of the founder shares, until the date (x) with respect to 20% of such shares, upon consummation of our initial business combination, (y) with respect to 20% of such shares, when the closing price of our common stock exceeds $12.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination, (z) with respect to 20% of such shares, when the closing price of our common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination, (xx) with respect to 20% of such shares, when the closing price of our common stock exceeds $15.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination and (yy) with respect to 20% of such shares, when the closing price of our common stock exceeds $17.00 for any 20 trading days within a 30-trading day period following the consummation of our initial business combination or earlier, in any case, if, following a business combination, we engage in a subsequent transaction (1) resulting in our shareholders having the right to exchange their shares for cash or other securities or (2) involving a consolidation, merger or other change in the majority of our board of directors or management team in which the company is the surviving entity, and (ii) in the case of the placement units and extension units and the component securities therein, by our sponsor until 30 days after the consummation of our initial business combination. |
• | Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. |
• | each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
• | each of our officers, directors and director nominees that beneficially owns shares of our common stock; and |
• | all our officers and directors as a group. |
Prior to the Offering | After the Offering(2)(3) | Prior to the Offering | After the Offering(2)(3) | |||||||||||||||||||||||||||||||||||
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Name and Address of Beneficial Owners(1) | Amount and nature of beneficial ownership | Percentage of outstanding common stock | Amount and nature of beneficial ownership | Percentage of outstanding common stock | Amount and nature of beneficial ownership | Percentage of outstanding common stock | Amount and nature of beneficial ownership | Percentage of outstanding common stock | ||||||||||||||||||||||||||||||
Quinpario Partners I, LLC(4) | 6,208,333 | 100 | % | 6,608,333 | 30.6 | % | 6,208,333 | 100 | % | 6,608,333 | 30.6 | % | ||||||||||||||||||||||||||
Jeffry N. Quinn(4) | 6,208,333 | 100 | % | 6,608,333 | 30.6 | % | 6,208,333 | 100 | % | 6,608,333 | 30.6 | % | ||||||||||||||||||||||||||
Paul J. Berra III | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
A. Craig Ivey | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Nadim Z. Qureshi | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
D. John Srivisal | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
James P. Heffernan(5) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Edgar G. Hotard(5) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Walter Thomas Jagodinski(5) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Dr. John Rutledge(5) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
All directors and officers as a group (5 persons) | 6,280,333 | 100 | % | 6,608,333 | 30.6 | % | ||||||||||||||||||||||||||||||||
Ilan Kaufthal(5) | — | — | — | — | ||||||||||||||||||||||||||||||||||
All directors and officers as a group (10 persons) | 6,280,333 | 100 | % | 6,608,333 | 30.6 | % |
* | Less than 1 percent. |
1 | Unless otherwise noted, the business address of each of the persons and entities listed above is 12935 N. Forty Drive, Suite 201, St. Louis, Missouri 63141. |
2 | Includes 6,208,333 founder shares and includes the sale of 1,150,000 placement units subject to subscription agreements in a private placement to be completed simultaneously with this offering. |
3 | Assumes the underwriters’ overallotment option has not been exercised and as a result, an aggregate of 750,000 founder shares have been forfeited, and assumes that no extension event has occurred and no extension units have yet been issued or related founders shares forfeited as a result. |
4 | Quinpario Partners LLC is the managing member of Quinpario Partners I, LLC. Jeffry N. Quinn, our Chairman, Chief Executive Officer and President, is the sole managing member of Quinpario Partners LLC. Consequently, Mr. Quinn may be deemed the beneficial owner of the founder shares and placement units held by our sponsor. Mr. Quinn disclaims beneficial ownership over any securities owned by our sponsor in which he does not have any pecuniary interest. |
5 | Will commence service as director upon the closing date of this offering. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period” to each warrant holder; and |
• | if, and only if, the reported last sale price of the common stock (or the closing bid price of our common stock in the event shares of our common stock are not traded on any specific day) equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending three business days before we send the notice of redemption to the warrant holders. |
• | if we are unable to consummate our initial business combination within 16 months from the consummation of this offering (or up to 24 months in case of extensions), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses (although, we expect all or substantially all of such interest released to be used for working capital purposes), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In order to extend the time available for us to consummate our initial business combination, our sponsor, or its affiliates or designees, would deposit an aggregate of $1.125 million (or approximately $0.075 per public share, or $0.065 per public share if the overallotment is exercised |
in full) for each four month extension into the trust account prior to the applicable deadline. In return, they would receive 112,500 extension units ($10.00 per unit), on the same terms as in the private placement that will occur simultaneously with the consummation of this offering. An aggregate of 225,000 extension units could be issued in connection with the two extensions; |
• | after the consummation of this offering and prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination; |
• | although we do not currently intend to enter into a business combination with a target business that is affiliated with our initial stockholders, our directors or officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA that such a business combination is fair to our stockholders from a financial point of view; |
• | if a stockholder vote on our initial business combination is not required by law or Nasdaq and we do not decide to hold a stockholder vote for business or other reasons, we may offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to consummating our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; and |
• | we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
• | a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”); |
• | an affiliate of an interested stockholder; or |
• | an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. |
• | A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if: |
our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction; |
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or |
on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an |
affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | 1% of the total number of shares of common stock then outstanding, which will equal 216,083 shares immediately after this offering (or 246,083 if the underwriters exercise their overallotment option); or |
• | the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
Underwriter | Number of Units | |||||
---|---|---|---|---|---|---|
C&Co/PrinceRidge LLC | ||||||
Cantor Fitzgerald & Co. | ||||||
Total | 15,000,000 |
• | the information presented in this prospectus and otherwise available to the underwriter; |
• | the history of and prospects of other companies whose principal business is the acquisition of other companies; |
• | prior offerings of those other companies; |
• | the ability of our management and their experience in identifying operating companies; |
• | our prospects for acquiring an operating business at attractive values; |
• | the present state of our development and our current financial condition and capital structure; |
• | the recent market prices of, and the demand for, publicly traded securities of generally comparable companies; |
• | general conditions of the securities markets at the time of the offering; and |
• | other factors as were deemed relevant. |
• | Stabilizing Transactions. The underwriter may make bids or purchases for the purpose of pegging, fixing or maintaining the price of our securities. |
• | Over-Allotments and Syndicate Coverage Transactions. The underwriter may create a short position in our securities by selling more of our securities than are set forth on the cover page of this prospectus. If the underwriter creates a short position during the offering, the underwriter may engage in syndicate covering transactions by purchasing our securities in the open market. The underwriter may also elect to reduce any short position by exercising all or part of the over-allotment option. |
• | Penalty Bids. The underwriter may reclaim a selling concession from a selected dealer when the units originally sold by the selected dealer is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
Fees | Fee per Unit | Without Exercise of the Over-allotment Option | With Exercise of Over-allotment Option | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Public offering price | $ | 10.00 | $ | 150,000,000 | $ | 172,500,000 | ||||||||
Underwriting discount(1) | $ | 0.30 | $ | 4,500,000 | $ | 5,175,000 | ||||||||
Deferred underwriting discount(2) | $ | 0.30 | $ | 4,500,000 | $ | 5,175,000 | ||||||||
Proceeds before expenses | $ | 9.40 | $ | 141,000,000 | $ | 162,150,000 |
(1) | Based on the underwriter’s discount equal to 3.0% of the gross proceeds from the sale of units offered to the public. |
(2) | Based on the deferred underwriting discount payable to C&Co/PrinceRidge LLC and Cantor Fitzgerald & Co. equal to 3.0% of the gross proceeds from the sale of the units offered to the public that will become payable from the amounts held in the trust account solely in the event we consummate our initial business combination. |
• | to any legal entity that is authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; |
• | to any legal entity that has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; |
• | to fewer than 100 natural or legal persons (other than qualified investors as defined below) subject to obtaining the prior consent of the underwriter for any such offer; or |
• | in any other circumstances that do not require the publication of a prospectus pursuant to Article 3 of the Prospectus Directive. |
F-2 | ||||||
Financial Statements | ||||||
F-3 | ||||||
F-4 | ||||||
F-5 | ||||||
F-6 | ||||||
F-7 – F-13 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 25,000 | |||||
Deferred offering costs | 62,500 | ||||||
Total assets | $ | 87,500 | |||||
LIABILITIES AND STOCKHOLDER’S EQUITY | |||||||
Current liabilities: | |||||||
Accrued offering costs | $ | 25,000 | |||||
Due to affiliate | 51,379 | ||||||
Total liabilities | 76,379 | ||||||
Stockholder’s equity | |||||||
Preferred stock, $.0001 par value, 1,000,000 shares authorized: none issued and outstanding | — | ||||||
Common stock, $.0001 par value, 43,000,000 shares authorized; 6,208,333 shares issued and outstanding | 621 | ||||||
Additional paid-in capital | 24,379 | ||||||
Deficit accumulated during the development stage | (13,879 | ) | |||||
Total stockholder’s equity | 11,121 | ||||||
Total liabilities and stockholder’s equity | $ | 87,500 |
Formation, general & administrative costs | $ | 13,879 | ||||
Net loss attributable to common shares | (13,879 | ) | ||||
Weighted average number of common shares outstanding — basic and diluted | 6,208,333 | |||||
Net loss per common share — basic and diluted | $ | (0.00 | ) |
Common Stock | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares | Amount | Additional Paid-in Capital | Deficit Accumulated During the Development Stage | Total Stockholder’s Equity | ||||||||||||||||||
Sale of common stock issued to initial stockholder on May 31, 2013 at approximately $0.004 per share | 6,208,333 | $ | 621 | $ | 24,379 | $ | — | $ | 25,000 | |||||||||||||
Net loss attributable to common shares | (13,879 | ) | (13,879 | ) | ||||||||||||||||||
Balances at June 4, 2013 | 6,208,333 | $ | 621 | $ | 24,379 | $ | (13,879 | ) | $ | 11,121 |
Cash flows from operating activities: | ||||||
Net loss attributable to common shares | $ | (13,879 | ) | |||
Changes in operating assets and liabilities | ||||||
Due to affiliate | 51,379 | |||||
Net cash provided by operating activities | 37,500 | |||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of common stock to initial stockholder | 25,000 | |||||
Payment of deferred offering costs | (37,500 | ) | ||||
Net cash used in financing activities | (12,500 | ) | ||||
Net increase in cash | 25,000 | |||||
Cash at beginning of the period | — | |||||
Cash at end of the period | $ | 25,000 | ||||
Supplemental disclosure of non-cash financing activities: | ||||||
Deferred offering costs included in accrued offering costs | $ | 25,000 |
C&Co/PrinceRidge | |||
Cantor Fitzgerald & Co. |
SEC filing fee | 23,529 | |||||
FINRA filing fee | 26,375 | |||||
Accounting fees and expenses | 45,000 | |||||
Printing and engraving expenses | 45,000 | |||||
Legal fees and expenses | 200,000 | |||||
NASDAQ Capital Market fees | 75,000 | |||||
Travel and roadshow | 30,000 | |||||
Directors and officers insurance | 175,000 | |||||
Miscellaneous expenses(1) | 30,096 | |||||
Total | 650,000 |
(1) | This amount represents additional expenses that may be incurred by us in connection with the offering over and above those specifically listed above, including distribution and mailing costs, transfer agent fees, warrant agent fees and trustee fees. |
Stockholders | Number of Shares | |||||
---|---|---|---|---|---|---|
Quinpario Partners I, LLC | 6,208,333 | |||||
Total |
Name: Jeffry N. Quinn Title: President and Chief Executive Officer |
Name | Position | Date | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ Jeffry N. Quinn | President, Chief Executive Officer, | |||||||||
Jeffry N. Quinn | Chairman of the Board of Directors (Principal Executive Officer) | |||||||||
/s/ D. John Srivisal | Vice President and Chief Financial Officer | |||||||||
D. John Srivisal | (Principal Financial and Accounting Officer) |
Exhibit No. | Description | |||||
---|---|---|---|---|---|---|
1.1 | Form of Underwriting Agreement. | |||||
3.1 | Certificate of incorporation. * | |||||
3.2 | Amended and restated certificate of incorporation. | |||||
3.3 | Bylaws. | |||||
4.1 | Specimen Unit Certificate.* * | |||||
4.2 | Specimen Common Stock Certificate.* * | |||||
4.3 | Specimen Warrant Certificate (included in Exhibit 4.4). | |||||
4.4 | Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant. | |||||
5.1 | Opinion of Ellenoff Grossman & Schole LLP.* * | |||||
10.1 | Form of Investment Management Trust Account Agreement between Continental Stock Transfer & Trust Company and the Registrant. | |||||
10.2 | Form of Registration Rights Agreement among the Registrant and security holders. | |||||
10.3 | Form of Letter Agreement | |||||
10.4 | Securities Purchase Agreement dated May 31, 2013 between the Registrant and Quinpario Partners I, LLC. * | |||||
10.5 | Promissory Note in the amount of $250,000 dated June 14, 2013 and issued to Quinpario Partners I, LLC. * | |||||
10.6 | Placement Unit Subscription Agreement between the Registrant and Sponsor. | |||||
10.7 | Form of Letter Agreement by and between | |||||
10.8 | Form of Indemnity Agreement. | |||||
14.1 | Code of Business and Ethics.* * | |||||
23.1 | Consent of Rothstein Kass. | |||||
23.2 | Consent of Ellenoff Grossman & Schole LLP (included in Exhibit 5.1).* * | |||||
99.1 | Consent of Ilan Kaufthal. | |||||
99.2 | Consent of James P. Heffernan. * | |||||
99.3 | Consent of Edgar G. Hotard. * | |||||
99.4 | Consent of Walter Thomas Jagodinski. * | |||||
99.5 | Consent of Dr. John Rutledge. * | |||||
99.6 | Audit Committee Charter** |
* | Previously filed. |
** | To be filed by amendment. |