Delaware | 6770 | 46-5723951 | ||||||||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
David Alan Miller, Esq. Jeffrey M. Gallant, Esq. Graubard Miller The Chrysler Building 405 Lexington Avenue New York, New York 10174 (212) 818-8800 (212) 818-8881 — Facsimile | Douglas S. Ellenoff, Esq. Stuart Neuhauser, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, NY 10105 (212) 370-1300 (212) 370-7889 — Facsimile |
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Large accelerated filero | Accelerated filero | |||||
Non-accelerated filerþ (Do not check if a smaller reporting company) | Smaller reporting companyo |
Title of each Class of Security being registered | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Units, each consisting of one share of common stock, par value $0.0001, and one Right entitling the holder to receive one-tenth (1/10) of a share of common stock(2) | $ | 115,000,000 | $ | 14,812 | ||||||||||||||||
Units, each consisting of one share of common stock, par value $0.0001, and one Redeemable Warrant to purchase one share of common stock(2)(4) | $ | 115,000,000 | $ | 14,812 | ||||||||||||||||
Common Stock included as part of the Units | — | — | — | — | ||||||||||||||||
Rights included as part of the Units(2) | — | — | ||||||||||||||||||
Common Stock underlying Rights included as part of the Units | — | — | ||||||||||||||||||
Redeemable Warrants included as part of the Units(2)(4) | — | — | ||||||||||||||||||
Total | $ | 115,000,000 | $ | 14,812 | $ | 115,000,000 | $ | 14,812 | (3) |
(1) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). |
(2) | Includes Units and shares of Common Stock and |
(3) | The filing fee has previously been paid. |
(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, dividends or similar transactions. |
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION, |
Public Offering Price | Underwriting Discount and Commissions(1) | Proceeds, Before Expenses, to Us | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Per unit | $ | 10.00 | $ | 0.55 | $ | 9.45 | ||||||||
Total | $ | 100,000,000 | $ | 5,500,000 | $ | 94,500,000 |
(1) | Includes up to |
Page | ||||||
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1 | ||||||
F-1 |
• | “we,” “us” or “our company” refers to Harmony Merger Corp.; |
• | “initial stockholders” refer to all of our stockholders immediately prior to the date of this prospectus, including all of our officers and directors to the extent they hold such insider shares; |
• | “insider shares” refer to the |
• | “management team” or “our management” refer to our officers and directors; |
• | “private units” refer to the units we are selling privately to our initial stockholders and Cantor Fitzgerald & Co. (or its designees) upon consummation of this offering and references to “private shares” |
• | the term “public stockholders” means the holders of the shares of common stock which are being sold as part of the units in this public offering, or “public shares” (whether they are purchased in the public offering or in the aftermarket), including any of our initial stockholders to the extent that they purchase such shares; and |
• | the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. |
Securities offered | 10,000,000 units, at $10.00 per unit, each unit consisting of one share of common stock and one | |||||
Listing of our securities and proposed symbols | We anticipate the units, and the common stock and | |||||
We have agreed with Cantor Fitzgerald & Co. that each of the shares of common stock and |
Once the common stock and | ||||||
We will file a Current Report on Form 8-K with the SEC, including an audited balance sheet, promptly after the consummation of this offering, which is anticipated to take place three business days from the date the units commence trading. The audited balance sheet will reflect our receipt of the proceeds from the exercise of the over-allotment option if the over-allotment option is exercised on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus, we will file an amendment to the Form 8-K or a new Form 8-K to provide updated financial information to reflect the exercise of the over-allotment option. We will also include in the Form 8-K, or amendment thereto, or in a subsequent Form 8-K, information relating to the separate trading of the common stock and | ||||||
Common Stock: | ||||||
Number outstanding before this offering | ||||||
Number to be outstanding after this offering and sale of private units | ||||||
Number outstanding before this offering | 0 | |||||
Number to be outstanding after this offering and sale of private units | ||||||
Each | ||||||
Exercise price | $11.50 per share. Except as described elsewhere in this prospectus, 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 |
1 | This number includes an aggregate of up to |
2 | Assumes the over-allotment option has not been exercised and an aggregate of |
Exercise period | The warrants will become exercisable on the later of 30 days after the completion of an initial business combination and 12 months from the date of this prospectus. The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an initial business combination, or earlier upon redemption. | |||||
Redemption | We may redeem the outstanding warrants (excluding the warrants underlying the private units so long as they are held by the initial purchasers or their permitted transferees), in whole and not in part, at a price of $0.01 per warrant: | |||||
• at any time while the warrants are exercisable, | ||||||
• upon a minimum of 30 days’ prior written notice of redemption, | ||||||
• if, and only if, the last sales price of our shares of common stock equals or exceeds $17.50 per share for any 20 trading days within a 30 trading day period ending three business days before we send the notice of redemption, and | ||||||
• if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. | ||||||
If the foregoing conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the shares of common stock may fall below the $17.50 trigger price as well as the $11.50 warrant exercise price after the redemption notice is issued. | ||||||
The redemption criteria for our warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants. | ||||||
If we call the warrants for redemption as described above, we will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing |
(x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether we will exercise our option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety of factors including the price of our common stock at the time the warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances. | ||||||
Amendment | The warrant agreement governing the warrants provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. Additionally, the warrants may be amended, by written consent or vote, of the holders of 65% of the then outstanding warrants (including the warrants underlying the private units and any other warrants we may issue after the date of this prospectus) in order to make any change that adversely affects the interests of the warrant holders. | |||||
Offering proceeds to be held in trust | $ | |||||
Except as set forth below, the proceeds in the trust account will not be released until the earlier of the completion of an initial business combination within the required time period or our entry into liquidation if we have not completed a business combination in the required time period. Therefore, unless and until an initial business combination is consummated, the proceeds held in the trust account will not be available for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the negotiation of an agreement to acquire a target business. | ||||||
Notwithstanding the foregoing, there can be released to us from the trust account |
Limited payments to insiders | Prior to the consummation of a business combination, there will be no fees, reimbursements or other cash payments paid to our initial stockholders, officers, directors or their affiliates prior to, or for any services they render in order to effectuate, the consummation of a business combination (regardless of the type of transaction that it is) other than: | |||||
• repayment at the closing of this offering of a $50,000 non-interest loan made by Eric S. Rosenfeld, our chairman and chief executive officer; | ||||||
• payment of $12,500 per month to Crescendo Advisors II, LLC, an entity controlled by Mr. Rosenfeld, for office space and related services; and | ||||||
• reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations. | ||||||
There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account, |
stockholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our Board of Directors, with any interested director abstaining from such review and approval. | ||||||
Stockholder approval of initial business combination | In connection with any proposed initial business combination, we will seek stockholder approval of such initial business combination at a meeting called for such purpose at which stockholders may seek to have their shares converted, regardless of whether they vote for or against the proposed business combination, for a pro rata share of the aggregate amount then on deposit in the trust |
account less any taxes then due but not yet paid (such conversion amount initially anticipated to be | ||||||
We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. We have determined not to consummate any business combination unless we have net tangible assets of at least $5,000,001 upon such consummation in order to avoid being subject to Rule 419 promulgated under the Securities Act. | ||||||
Our initial stockholders have agreed (i) to vote their insider shares, private shares and any public shares purchased in or after this offering in favor of any proposed business combination and (ii) not to convert any insider shares |
buyback shares purchased by Mr. Rosenfeld pursuant to this arrangement will be voted in favor of the | ||||||
Conversion rights | In connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will have the right, regardless of whether he is voting for or against such proposed business combination, to have his shares converted into a pro rata share of the trust account upon consummation of the business combination. However, we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation. As a result, we will not be able to consummate an initial business combination if the value of the shares being sought to be converted reduces our net tangible value below $5,000,001. Additionally, in connection with any proposed business combination, a target business could impose a working capital closing condition or require us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination. As a result, this may limit the number of shares that we can have converted and still consummate such business combination. | |||||
As indicated above, our initial stockholders have agreed not to convert any insider shares or private shares for a pro rata portion of the funds in the trust account in connection with a stockholder vote to approve a proposed initial business combination. Additionally, each initial stockholder other than NPIC Limited, DKU 2013 LLC, The K2 Principal Fund L.P., Covalent Capital Partners Master Fund, L.P. and Halcyon Master Fund L.P. has agreed not to convert any public shares (including in the case of Mr. Rosenfeld, any buyback shares he purchases) they hold for a pro rata portion of the funds in the trust account in connection with a stockholder vote to approve a proposed initial business combination. NPIC Limited, |
DKU 2013 LLC, The K2 Principal Fund L.P., Covalent Capital Partners Master Fund, L.P. and Halcyon Master Fund L.P. would be allowed to convert any public shares they purchase in this offering or in the aftermarket for a pro rata portion of the funds in the trust account in connection with a stockholder vote to approve a proposed initial business combination. | ||||||
Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the shares of common stock sold in this offering. Accordingly, all shares purchased by a holder in |
excess of 20% of the shares sold in this offering will not be converted for cash. We believe this restriction will prevent an individual stockholder or “group” from accumulating large blocks of shares before the vote held to approve a proposed business combination and attempt to use the redemption right as a means to force us or our management to purchase its shares at a significant premium to the then current market price. By restricting a stockholder’s ability to convert more than 20% of the shares of common stock sold in this offering, we believe we have limited the ability of a small group of stockholders to unreasonably attempt to block a transaction which is favored by our other public stockholders. | ||||||
We may also require public stockholders, whether they are a record holder or hold their shares in “street name,” to either tender their certificates to our transfer agent at any time through the vote on the business combination or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s | ||||||
If the business combination is not consummated for any reason, public stockholders will not be entitled to have their shares converted. Public stockholders who convert their shares will continue to have the right to | ||||||
Liquidation if no business combination | If we are unable to complete our initial business combination within 24 months from the consummation of this offering, 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 100% of the 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 holders of common stock and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. |
In connection with our redemption of 100% of our outstanding public shares for a portion of the funds held in the trust account, each holder will receive a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not previously released to us | ||||||
We may not have funds sufficient to pay or provide for all creditors’ claims. Although we will seek to have all third parties (including any vendors or other entities we engage after this offering) and any prospective target businesses enter into valid and enforceable agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. In the event that a potential contracted party was to refuse to execute such a waiver, we will execute an agreement with that entity only if our management first determines that we would be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing to execute such a waiver. Examples of instances where we may engage a third party that refused to execute a waiver would be the engagement of a third party consultant who cannot sign such an agreement due to regulatory restrictions, such as our auditors who are unable to sign due to independence requirements, the underwriters, who have not waived their rights to indemnification provided by us under the underwriting agreement, or other third parties whose particular expertise or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or a situation in which |
management does not believe it would be able to find a provider of required services willing to provide the waiver. There is also no guarantee that the third parties would not challenge the enforceability of these waivers and bring claims against the trust account for monies owed them. | ||||||
The holders of the insider shares and private units will not participate in any redemption distribution with respect to their insider shares, private shares or warrants underlying the private | ||||||
If we are unable to conclude our initial business combination and we expend all of the net proceeds of this offering not deposited in the trust account, without taking into account any interest earned on the trust account, we expect that the initial per-share redemption price will be approximately | ||||||
We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, Eric S. Rosenfeld, our Chairman and Chief Executive Officer, has agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to seek repayment for such expenses. | ||||||
Insider Indemnification | Eric S. Rosenfeld has agreed that he will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduces the amount of funds in the trust account to below $10.20 per public share, except as to any claims by a third party who executed a waiver of |
any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Mr. Rosenfeld will not be responsible to the extent of any liability for such third party claims. Furthermore, he will not be personally liable to our public stockholders and instead will only have liability to us. We have not independently verified whether Mr. Rosenfeld has sufficient funds to satisfy his indemnity obligations and, therefore, Mr. Rosenfeld may not be able to satisfy those obligations. We have not asked Mr. Rosenfeld to reserve for such eventuality. We believe the likelihood of Mr. Rosenfeld having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Nevertheless, if we liquidate, the per-share distribution from the trust account could be less than approximately $10.20 due to claims or potential claims of creditors. |
May 31, 2014 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual | As Adjusted(1) | ||||||||||
Balance Sheet Data: | |||||||||||
Working capital | $ | 2,007 | $ | 97,774,507 | (2) | ||||||
Total assets | 97,485 | 100,774,507 | (3) | ||||||||
Total liabilities | 72,978 | 3,000,000 | (4) | ||||||||
Value of common stock subject to possible conversion | 0 | 91,999,990 | (5) | ||||||||
Stockholders’ equity | 24,507 | 5,774,517 |
December 31, 2014 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual | As Adjusted(1) | |||||||||||||
Balance Sheet Data: | ||||||||||||||
Working capital (deficiency) | $ | (92,093 | ) | $2) | 99,173,677 | (2) | ||||||||
Total assets | 116,885 | 102,673,677 | (3) | |||||||||||
Total liabilities | 93,208 | 3,500,000 | (4) | |||||||||||
Value of common stock subject to possible conversion | 0 | 93,499,993 | (5) | |||||||||||
Stockholders’ equity | 23,677 | 5,673,684 |
December 31, 2014 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual | As Adjusted | |||||||||||||
Income Statement Data: | ||||||||||||||
Revenue | $ | 0 | $ | 0 | ||||||||||
Net loss | (1,323 | ) | (1,323 | ) | ||||||||||
Basic and diluted net loss per share | (0.00 | ) | (0.00 | ) |
(1) | Includes the |
(2) | The “as adjusted” working capital is derived by adding total stockholders’ equity and the value of the common stock subject to possible conversion less up to |
(3) | The “as adjusted” total assets is derived by adding total stockholders’ equity and the value of common stock subject to possible conversion. |
(4) | The “as adjusted” liabilities represents up to |
(5) | The “as adjusted” value of common stock subject to possible conversion is derived by taking |
• | may significantly reduce the equity interest of investors in this offering; |
• | may subordinate the rights of holders of common stock if we issue preferred stock with rights senior to those afforded to our common stock; |
• | may cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our shares of common stock. |
• | default and foreclosure on our assets if our profits after a 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; and |
• | 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. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity with respect to our securities; |
• | a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock; |
• | a limited amount of news and analyst coverage for our company; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | solely dependent upon the performance of a single business, or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | 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, compliance policies and procedures and disclosure requirements and other rules and regulations. |
• | the history and prospects of companies whose principal business is the acquisition of other companies; |
• | prior offerings of those companies; |
• | our prospects for acquiring an operating business at attractive values; |
• | our capital structure; |
• | an assessment of our management and their experience in identifying operating companies; and |
• | general conditions of the securities markets at the time of the offering. |
• | rules and regulations or currency redemption or corporate withholding taxes on individuals; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | longer payment cycles; |
• | inflation; |
• | economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | challenges in managing and staffing international operations; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | protection of intellectual property; and |
• | employment regulations. |
• | ability to complete our initial business combination; |
• | limited operating history; |
• | success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• | potential ability to obtain additional financing to complete a business combination; |
• | pool of prospective target businesses; |
• | the ability of our officers and directors to generate a number of potential investment opportunities; |
• | potential change in control if we acquire one or more target businesses for shares; |
• | our public securities’ potential liquidity and trading; |
• | regulatory or operational risks associated with acquiring a target business; |
• | use of proceeds not held in the trust |
• | financial performance following this offering; or |
• | listing or delisting of our securities from Nasdaq or the ability to have our securities listed on Nasdaq following our initial business combination. |
Without Over-Allotment Option | Over-Allotment Option Exercised | Without Over-Allotment Option | Over-Allotment Option Exercised | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross proceeds | ||||||||||||||||||||
From offering | $ | 100,000,000 | $ | 115,000,000 | $ | 100,000,000 | $ | 115,000,000 | ||||||||||||
From private placement | 3,750,000 | 4,125,000 | 5,285,000 | 5,585,000 | ||||||||||||||||
Total gross proceeds | 103,750,000 | 119,125,000 | 105,285,000 | 120,585,000 | ||||||||||||||||
Offering expenses(1) | ||||||||||||||||||||
Underwriting discount (2.5% of gross proceeds from offering, excluding deferred fee of up to 3.0% of gross proceeds from offering) | 2,500,000 | (2) | 2,875,000 | (2) | ||||||||||||||||
Underwriting discount (2.0% of gross proceeds from offering) | 2,000,000 | (2) | 2,000,000 | (2) | ||||||||||||||||
Financial advisor fee | 135,000 | 135,000 | ||||||||||||||||||
Legal fees and expenses | 250,000 | 250,000 | 250,000 | 250,000 | ||||||||||||||||
Nasdaq listing fee | 50,000 | 50,000 | 75,000 | 75,000 | ||||||||||||||||
Printing and engraving expenses | 45,000 | 45,000 | 45,000 | 45,000 | ||||||||||||||||
Accounting fees and expenses | 40,000 | 40,000 | 40,000 | 40,000 | ||||||||||||||||
FINRA filing fee | 18,000 | 18,000 | 18,000 | 18,000 | ||||||||||||||||
SEC registration fee | 15,000 | 15,000 | 15,000 | 15,000 | ||||||||||||||||
Miscellaneous expenses | 82,000 | 82,000 | 57,000 | 57,000 | ||||||||||||||||
Total offering expenses | 3,000,000 | 3,375,000 | 2,635,000 | 2,635,000 | ||||||||||||||||
Net proceeds | ||||||||||||||||||||
Held in trust | 100,000,000 | 115,000,000 | 102,000,000 | 117,300,000 | ||||||||||||||||
Not held in trust | 750,000 | 750,000 | 650,000 | 650,000 | ||||||||||||||||
Total net proceeds | $ | 100,750,000 | $ | 115,750,000 | $ | 102,650,000 | $ | 117,950,000 | ||||||||||||
Use of net proceeds not held in trust and amounts available from interest income earned on the trust account(3)(4) | ||||||||||||||||||||
Legal, accounting and other third party expenses attendant to the search for target businesses and to the due diligence investigation, structuring and negotiation of a business combination | $ | 200,000 | (23.5%) | $ | 150,000 | (18.8%) | ||||||||||||||
Due diligence of prospective target businesses by officers, directors and initial stockholders | 50,000 | (3.5%) | 25,000 | (3.1%) | ||||||||||||||||
Legal and accounting fees relating to SEC reporting obligations | 100,000 | (11.8%) | 100,000 | (12.5%) | ||||||||||||||||
Payment of administrative fee to Crescendo Advisors II, LLC ($12,500 per month for up to 24 months) | 300,000 | (35.3%) | 300,000 | (37.5%) | ||||||||||||||||
Corporate and franchise taxes | 100,000 | (11.8%) | ||||||||||||||||||
Working capital to cover miscellaneous expenses, D&O insurance, general corporate purposes, liquidation obligations and reserves | 100,000 | (11.8%) | ||||||||||||||||||
Income and franchise taxes | 150,000 | (18.8%) | ||||||||||||||||||
Working capital to cover miscellaneous expenses, D&O insurance, general corporate purposes, Nasdaq continued listing fees, liquidation obligations and reserves | 75,000 | (9.3%) | ||||||||||||||||||
Total | $ | 850,000 | (100.0%) | $ | 800,000 | (100.0%) |
(1) | A portion of the offering expenses, including the SEC registration fee, the FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees, have been paid from the funds we received from Eric S. Rosenfeld described below. These funds will be repaid out of the proceeds of this offering available to us. |
(2) | The underwriting discount of |
(3) | The amount of proceeds not held in trust will remain constant at |
(4) | These 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 our initial business combination based upon the level of complexity of that business combination. 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 be deducted from our excess working capital. |
Public offering price | $ | |||||||||
Net tangible book value before this offering | $ | ) | ||||||||
Increase attributable to new investors and private sales | ||||||||||
Pro forma net tangible book value after this offering | ||||||||||
Dilution to new investors | $ | |||||||||
Percentage of dilution to new investors | % |
Shares Purchased | Total Consideration | Average Price per Share | Shares Purchased | Total Consideration | Average Price per Share | |||||||||||||||||||||||||||||||||||||||||
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Number | Percentage | Amount | Percentage | Number | Percentage | Amount | Percentage | |||||||||||||||||||||||||||||||||||||||
Initial stockholders | 2,912,500 | (1) | 20.9 | % | $ | 3,775,000 | 3.6 | % | $ | 1.30 | ||||||||||||||||||||||||||||||||||||
Initial stockholders and purchasers of private units | 3,172,250 | (1) | 24.1 | % | $ | 5,310,000 | 5.0 | % | $ | 1.67 | ||||||||||||||||||||||||||||||||||||
New investors | 11,000,000 | (2) | 79.1 | % | 100,000,000 | 96.4 | % | $ | 9.09 | 10,000,000 | 75.9 | % | 100,000,000 | 95.0 | % | $ | 10.00 | |||||||||||||||||||||||||||||
13,912,500 | 100.0 | % | $ | 103,775,000 | 100.0 | % | 13,172,250 | 100.0 | % | $ | 105,310,000 | 100.0 | % |
(1) | Assumes the over-allotment option has not been exercised and an aggregate of |
Numerator: | ||||||
Net tangible book value before the offering | $ | ) | ||||
Net proceeds from this offering and private placement of private units | ||||||
Offering costs excluded from net tangible book value before this offering | 115,770 | |||||
Less: Deferred underwriters’ commission | ( | ) | ||||
Less: Proceeds held in trust subject to possible conversion | ( | ) | ||||
$ | ||||||
Denominator: | ||||||
Shares of common stock outstanding prior to this offering | (1) | |||||
Shares of common stock included in the units offered | 10,000,000 | |||||
Shares of common stock to be sold in private placement | ||||||
Less: Shares subject to possible conversion | ( | ) | ||||
(1) | Assumes the over-allotment option has not been exercised and an aggregate of |
May 31, 2014 | December 31, 2014 | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual | As Adjusted(1) | Actual | As Adjusted(1) | |||||||||||||||||||
Note payable to related party(2) | $ | 50,000 | $ | — | $ | 50,000 | $ | — | ||||||||||||||
Deferred underwriting commissions | — | 3,000,000 | — | 3,500,000 | ||||||||||||||||||
Shares of common stock, par value $0.0001 per share, -0- and 9,199,999 shares which are subject to possible conversion | — | 91,999,990 | (4) | |||||||||||||||||||
Shares of common stock, par value $0.0001 per share, -0- and 9,166,666 shares which are subject to possible conversion | — | 93,499,993 | (4) | |||||||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||||
Shares of preferred stock, par value $0.0001 per share, 1,000,000 shares authorized; none issued or outstanding | — | — | — | — | ||||||||||||||||||
Shares of common stock, par value $0.0001 per share, 16,000,000 shares authorized; 2,875,000 shares issued and outstanding, actual; 3,675,001 shares issued and outstanding(3) (excluding 9,199,999 shares subject to possible conversion), as adjusted | 288 | 368 | ||||||||||||||||||||
Shares of common stock, par value $0.0001 per share, 16,000,000 shares authorized(5); 3,026,250 shares issued and outstanding, actual; 4,005,584 shares issued and outstanding(3) (excluding 9,166,666 shares subject to possible conversion), as adjusted | 303 | 401 | ||||||||||||||||||||
Additional paid-in capital | 24,712 | 5,774,642 | 24,697 | 5,674,606 | ||||||||||||||||||
Deficit accumulated during the development stage | (493 | ) | (493 | ) | ||||||||||||||||||
Accumulated deficit | (1,323 | ) | (1,323 | ) | ||||||||||||||||||
Total stockholders’ equity: | $ | 24,507 | $ | 5,774,517 | $ | 23,677 | $ | 5,673,684 | ||||||||||||||
Total capitalization | $ | 74,507 | $ | 100,774,507 | (5) | $ | 73,677 | $ | 102,673,677 |
(1) | Includes the |
(2) | Note payable to related party is a promissory note issued in the aggregate amount of $50,000 to Eric S. Rosenfeld. The note is non-interest bearing and is payable on the earliest to occur of (i) May 31, 2015, (ii) the consummation of this offering or (iii) the date on which we determine not to proceed with this offering. |
(3) | Assumes the over-allotment option has not been exercised and an aggregate of |
(4) | Derived by taking |
(5) |
• | may significantly reduce the equity interest of our stockholders; |
• | may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock; |
• | will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our securities. |
• | default and foreclosure on our assets if our operating revenues after a business combination are insufficient to pay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant 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; and |
• | our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding. |
• | $ |
• | $ |
• | $100,000 of expenses in legal and accounting fees relating to our SEC reporting obligations; |
• | $300,000 for the payment of the administrative fee to Crescendo Advisors II, LLC (of $12,500 per month for up to 24 months); |
• | $ |
• | $ |
TableWe are also obligated to pay Canaccord Genuity Inc., of Contents
which Mr. Rosenfeld’s son is an employee, a fee of $135,000 upon consummation of this offering for agreeing to provide us with certain financial advisory services in connection with a preliminary review of potential merger and acquisition opportunities.
• | 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. |
• | financial condition and results of operation; |
• | growth potential; |
• | brand recognition and potential; |
• | return on equity or invested capital; |
• | market capitalization or enterprise value; |
• | experience and skill of management and availability of additional personnel; |
• | capital requirements; |
• | competitive position; |
• | barriers to entry; |
• | stage of development of its products, processes or services; |
• | existing distribution and potential for expansion; |
• | degree of current or potential market acceptance of the products, processes or services; |
• | proprietary aspects of products and the extent of intellectual property or other protection for its products, processes, formulas or services; |
• | impact of regulation on the business; |
• | regulatory environment of the industry; |
• | costs associated with effecting the business combination; |
• | industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates; and |
• | macro competitive dynamics in the industry within which the company competes. |
• | subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and |
• | result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services. |
• | prior to the consummation of our initial business combination, we shall seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares of common stock, regardless of whether they vote for or against the proposed business combination, into a portion of the aggregate amount then on deposit in the trust account, subject to the limitations described herein; |
• | we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination; |
• | if our initial business combination is not consummated within 24 months of the consummation of this offering, then our existence will terminate and we will distribute all amounts in the trust account and any net assets remaining outside the trust account to all of our public holders of shares of common stock; |
• | we may not consummate any other business combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination; and |
• | prior to our initial business combination, we may not issue (i) any shares of common stock or any securities convertible into common stock, or (ii) any securities that participate in any manner in the proceeds of the trust account, or that vote as a class with the common stock sold in this offering on our initial business combination. |
• | our obligation to seek stockholder approval of a business combination may delay the completion of a transaction; |
• | our obligation to convert public shares |
• | Nasdaq may require us to file a new listing application and meet its initial listing requirements to maintain the listing of our securities following a business combination; |
• | our outstanding |
• | our obligation to pay a deferred underwriting fee of up to 3.5% of the proceeds of this offering or 5.5% on any proceeds received from the exercise of the over-allotment option; |
• | our obligation to either repay or issue private units upon conversion of up to $500,000 of working capital loans that may be made to us by our initial stockholders, officers, directors or their affiliates; |
• | our obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any securities issued to our initial stockholders, officers, directors or their affiliates upon conversion of working capital loans; and |
• | the impact on the target business’ assets as a result of unknown liabilities under the securities laws or otherwise depending on developments involving us prior to the consummation of a business combination. |
Terms of the Offering | Terms Under a Rule 419 Offering | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Escrow of offering proceeds | $ | $87,750,000 of the offering proceeds 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 | The | Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940 or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. | ||||||||
Limitation on fair value or net assets of target business | The initial target business that we acquire must have a fair market value equal to at least 80% of the balance in our trust account at the time of the execution of a definitive agreement for our initial business combination. | We would be restricted from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the maximum offering proceeds. | ||||||||
Trading of securities issued | The units may commence trading on or promptly after the date of this prospectus. The shares of common stock and | No trading of the units or the underlying securities 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 completion of a business combination and, accordingly, will be exercised only after the trust account has been terminated and distributed. | 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. |
Terms of the Offering | Terms Under a Rule 419 Offering | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Election to remain an investor | We will give our stockholders the opportunity to vote on the business combination. We will send each stockholder a proxy statement containing information required by the SEC. Under Delaware law and our bylaws, we must provide at least 10 days advance notice of any meeting of stockholders. Accordingly, this is the minimum amount of time we would need to provide holders to determine whether to exercise their rights to convert their shares into cash or to remain an investor in our company. | A prospectus containing information 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 the post-effective amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account would automatically be returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all of the deposited funds in the escrow account must be returned to all investors and none of the securities will be issued. |
Business combination deadline | Pursuant to our amended and restated certificate of incorporation, if we do not complete an initial business combination within 24 months from the consummation of this offering, it will trigger our automatic winding up, dissolution and liquidation. | If an acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow account would be returned to investors. | |||||||||
Interest earned on the funds in the trust account | There can be released to us, from time to time, | All interest earned on the funds in the trust account will be held in trust for the benefit of public stockholders until the earlier of the completion of a business combination and our liquidation upon failure to effect a business combination within the allotted time. | |||||||||
Release of funds | Except for | The proceeds held in the escrow account would not be 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 | Position | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Eric S. Rosenfeld | Chairman of the Board and Chief Executive Officer | |||||||||
David D. Sgro | Chief Operating Officer and Director | |||||||||
Thomas Kobylarz | 37 | Chief Financial Officer | ||||||||
John P. Schauerman | 57 | Director | ||||||||
Adam J. Semler | 50 | Director | ||||||||
Leonard B. Schlemm | 61 | Director |
• | 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; |
• | 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. |
• | should have demonstrated notable or significant achievements in business, education or public service; |
• | should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and |
• | should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s based on such evaluation; |
• | reviewing and approving the compensation of all of our other executive officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
• | if required, producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their 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 our company as well as the other entities with which they are affiliated. Our management has pre-existing fiduciary duties and contractual obligations and may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
• | Our officers and directors are now, and may in the future become, affiliated with entities, including other blank check companies, engaged in business activities identical to those intended to be conducted by our company. |
• | The insider shares owned by our officers and directors will be released from escrow only if a business combination is successfully completed and subject to certain other limitations. Additionally, our officers and directors will not receive distributions from the trust account with respect to any of their insider shares if we do not complete a business combination. Furthermore, the initial stockholders have agreed that the private units (and underlying securities) will not be sold or transferred by them until after we have completed our initial business combination. In addition, our officers and directors may loan funds to us after this offering and may be owed reimbursement for expenses incurred in connection with certain activities on our behalf which would only be repaid if we complete an initial business combination. For the foregoing reasons, the personal and financial interests of our directors and executive officers may influence their motivation in identifying and selecting a target business, completing a business combination in a timely manner and securing the release of their shares. |
• | 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. |
Name of Affiliated Company | Name of Individual(s) | Priority/Preference relative to Harmony Merger Corp. | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
CPI Aerostructures, Inc. | Eric S. Rosenfeld | Mr. Rosenfeld will be required to present all business opportunities which are suitable for CPI Aerostructures to CPI Aerostructures prior to presenting them to us. CPI Aerostructures is engaged in the contract production of structural aircraft parts principally for the United States Air Force and other branches of the U.S. armed forces. | ||||||||
Absolute Software | Eric S. Rosenfeld | Mr. Rosenfeld will be required to present all business opportunities which are suitable for Absolute Software to Absolute Software provides persistent endpoint security and management for computers, laptops, tablets and smartphone devices. | ||||||||
COM DEV International | David D. Sgro | Mr. Sgro will be required to present all business opportunities which are suitable for COM DEV International to COM DEV International prior to presenting them to us. COM DEV International is a global designer and manufacturer of space hardware. | ||||||||
Cott Corporation | Eric S. Rosenfeld | Mr. Rosenfeld will be required to present all business opportunities which are suitable for the Cott Corporation to the Cott Corporation prior to presenting them to us. Cott Corporation is a private label beverage company. | ||||||||
SAExploration Holdings Inc. | Eric S. Rosenfeld David D. Sgro | Each of Messrs. Rosenfeld and Sgro will be required to present all business opportunities which are suitable for SAExploration Holdings Inc. to SAExploration Holdings Inc. prior to presenting them to us. SAE is a holding company of various subsidiaries which collectively form a geophysical services company offering seismic data acquisition services to the oil and gas industry in North America, South America, and Southeast Asia. |
Pangaea Logistics Solutions Ltd. | Eric S. Rosenfeld David D. Sgro |
Name of Affiliated Company | Name of Individual(s) | Priority/Preference relative to Harmony Merger Corp. | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
The Mansfield Clubs | Leonard B. Schlemm | Mr. Schlemm will be required to present all business opportunities which are suitable for The Mansfield Clubs to The Mansfield Clubs prior to presenting them to us. The Mansfield Clubs are three high-end fitness centers in the Montreal area. |
Myca Health Inc. | Leonard B. Schlemm | Mr. Schlemm will be required to present all business opportunities which are suitable for Myca Health Inc. to Myca Health Inc. prior to presenting them to us. Myca Health Inc. is a medical software company focused on primary care practices across the United States. | ||||||||
The Atwater Club | Leonard B. Schlemm | Mr. Schlemm will be required to present all business opportunities which are suitable for The Atwater Club to The Atwater Club prior to presenting them to us. The Atwater Club is a private racquet club in Montreal. |
• | 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 and directors; and |
• | all of our officers and directors as a group. |
Prior to Offering | After Offering(2) | Prior to Offering | After Offering(2) | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership | Approximate Percentage of Outstanding Shares of common stock | Amount and Nature of Beneficial Ownership(3) | Approximate Percentage of Outstanding Shares of common stock | Amount and Nature of Beneficial Ownership | Approximate Percentage of Outstanding Shares of common stock | Amount and Nature of Beneficial Ownership | Approximate Percentage of Outstanding Shares of common stock | ||||||||||||||||||||||||||||||
Eric S. Rosenfeld | 2,182,000 | 76.0 | % | 1,929,001 | 14.9 | % | 1,585,566 | (3) | 52.4 | % | 1,390,118 | (3)(4) | 10.6 | % | ||||||||||||||||||||||||
David D. Sgro | 0 | 0 | % | 0 | 0 | % | 310,956 | 10.3 | % | 259,475 | (5) | 1.9 | % | |||||||||||||||||||||||||
Thomas Kobylarz | 0 | 0 | % | 0 | 0 | % | 60,335 | 2.0 | % | 50,346 | (6) | * | ||||||||||||||||||||||||||
John P. Schauerman | 0 | 0 | % | 0 | 0 | % | 15,000 | * | 22,500 | (7) | * | |||||||||||||||||||||||||||
Adam J. Semler | 0 | 0 | % | 0 | 0 | % | 15,000 | * | 22,500 | (7) | * | |||||||||||||||||||||||||||
Leonard B. Schlemm | 0 | 0 | % | 0 | 0 | % | 119,800 | 4.0 | % | 202,500 | (8) | 1.5 | % | |||||||||||||||||||||||||
Polar Securities Inc.(4) | 231,000 | 8.0 | % | 315,333 | 2.4 | % | ||||||||||||||||||||||||||||||||
DKU 2013 LLC(5) | 231,000 | 8.0 | % | 315,333 | 2.4 | % | ||||||||||||||||||||||||||||||||
The K2 Principal Fund L.P.(6) | 231,000 | 8.0 | % | 315,333 | 2.4 | % | ||||||||||||||||||||||||||||||||
Halcyon Master Fund L.P.(9) | 215,000 | 7.1 | % | 285,000 | (10) | 2.2 | % | |||||||||||||||||||||||||||||||
DKU 2013 LLC(11) | 195,000 | 6.4 | % | 255,000 | (12) | 1.9 | % | |||||||||||||||||||||||||||||||
Covalent Capital Partners Master Fund, L.P.(13) | 180,000 | 5.9 | % | 270,000 | (14) | 2.0 | % | |||||||||||||||||||||||||||||||
All directors and executive officers as a group (six individuals) | 2,182,000 | 76.0 | % | 1,929,001 | 14.9 | % | 2,106,657 | 69.6 | % | 1,947,439 | (15) | 14.8 | % |
* | Less than 1%. |
(1) | Unless otherwise indicated, the business address of each of the individuals is c/o Harmony Merger Corp., 777 Third Avenue, 37th Floor, New York, New York 10017 |
(2) | Assumes no exercise of the over-allotment option and, therefore, the forfeiture of an aggregate of |
(3) |
(4) | Includes 34,371 private units to be held by Mr. Rosenfeld and 30,000 private units to be held by the Rosenfeld Children’s Successor Trust, which private units will be purchased simultaneously with the consummation of this offering, and assumes the forfeiture of an aggregate of 259,819 shares and the transfer of an aggregate of 15,200 shares to Mr. Schlemm, each as a result of the over-allotment option not being exercised. |
(5) | Includes 2,538 private units to be held by Mr. Sgro, which private units will be purchased simultaneously with the consummation of this offering, and assumes the forfeiture of an aggregate of 54,019 shares as a result of the over-allotment option not being exercised. |
(6) | Includes 492 private units to be held by Mr. Kobylarz, which private units will be purchased simultaneously with the consummation of this offering, and assumes the forfeiture of an aggregate of 10,481 shares as a result of the over-allotment option not being exercised. |
(7) | Includes 7,500 private units to be held by this individual, which private units will be purchased simultaneously with the consummation of this offering. |
(8) | Includes 67,500 private units to be held by Mr. Schlemm, which private units will be purchased simultaneously with the consummation of this offering, and assumes the receipt of an aggregate of 15,200 shares to be transferred from Mr. Rosenfeld as a result of the over-allotment option not being exercised. |
(9) | The business address of |
Includes 95,000 private units to be held by this entity, which private units will be purchased simultaneously with the consummation of this offering, and assumes the forfeiture of an aggregate of 25,000 shares as a result of the over-allotment option not being exercised. |
(11) | The business address of DKU 2013, LLC is 405 Park Avenue, 6th Floor, New York, NY 10022. Jeff Keswin has ultimate voting and dispositive power over the shares held by DKU 2013, LLC. |
Includes 85,000 private units to be held by this entity, which private units will be purchased simultaneously with the consummation of this offering and assumes the forfeiture of an aggregate of 25,000 shares as a result of the over-allotment option not being exercised. |
(13) | The business address of |
(14) | Includes 90,000 private units to be held by Covalent Capital Partners Master Fund, L.P., which private units will be purchased simultaneously with the |
(15) | Includes an aggregate of 149,901 private units to be held by our executive officers and directors, which private units will be purchased simultaneously with the consummation of this offering, and assumes the forfeiture of an aggregate of 389,519 shares as a result of the over-allotment option not being exercised. |
Tableoutstanding shares of Contents
Name | Number of Shares | Relationship to Us | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
231,000 | Initial Stockholder | |||||||||
DKU 2013 LLC | 231,000 | Initial Stockholder | ||||||||
The K2 Principal Fund L.P. | 231,000 | Initial Stockholder |
• | at any time while the warrants are exercisable, |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder, |
• | if, and only if, the reported last sale price of the shares of common stock equals or exceeds $17.50 per share, for any 20 trading days within a 30-day trading period ending on the third business day prior to the notice of redemption to warrant holders, and |
• | if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants commencing five business days prior to the 30-day trading period and continuing each day thereafter until the date of redemption. |
• | 1% of the number of shares of common stock then outstanding, which will equal |
• | the average weekly trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
Underwriters | Number of Units | |||||
---|---|---|---|---|---|---|
Cantor Fitzgerald & Co. | ||||||
Total | 10,000,000 |
• | receipt and acceptance of the units by the underwriters; and |
• | the underwriters’ right to reject orders in whole or in part. |
Per Unit | Without Over-allotment | With Over-allotment | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Public offering price | $ | 10.00 | $ | 100,000,000 | $ | 115,000,000 | ||||||||
Discount(1) | $ | 0.55 | $ | 5,500,000 | $ | 6,325,000 | ||||||||
Proceeds before expenses(2) | $ | 9.45 | $ | 94,500,000 | $ | 108,675,000 |
(1) | The underwriting discount of |
(2) | The offering expenses are estimated at |
• | the history and prospects of companies whose principal business is the acquisition of other companies; |
• | prior offerings of those companies; |
• | our prospects for acquiring an operating business at attractive values; |
• | our capital structure; |
• | the per share amount of net proceeds being placed into the trust account; |
• | an assessment of our management and their experience in identifying operating companies; |
• | general conditions of the securities markets at the time of the offering; and |
• | other factors as were deemed relevant. |
• | Stabilizing Transactions. The underwriters may make bids or purchases for the purpose of preventing or retarding a decline in the price of our units, as long as stabilizing bids do not exceed the offering price of $10.00 and the underwriters comply with all other applicable rules. |
• | Over-Allotments and Syndicate Coverage Transactions. The underwriters may create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus up to the amount of the over-allotment option. This is known as a covered short position. The underwriters may also create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus and the units allowed by the over-allotment option. This is known as a naked short position. If the underwriters create a short position during the offering, the representative may engage in syndicate covering transactions by purchasing our units in the open market. The representative may also elect to reduce any short position by exercising all or part of the over-allotment option. Determining what method to use in reducing the short position depends on how the units trade in the aftermarket following the offering. If the unit price drops following the offering, the short position is usually covered with shares purchased by the underwriters in the aftermarket. However, the underwriters may cover a short position by exercising the over-allotment option even if the unit price drops following the offering. If the unit price rises after the offering, then the over-allotment option is used to cover the short position. If the short position is more than the |
allotment option, the naked short must be covered by purchases in the aftermarket, which could be at prices above the offering price. |
• | Penalty Bids. The representative may reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
F-2 | ||||||
F-3 | ||||||
F-4 | ||||||
F-5 | ||||||
F-6 | ||||||
F-7 – |
ASSETS | ||||||
Current assets — Cash and cash equivalents | $ | |||||
Deferred offering costs associated with initial public offering | ||||||
Total assets | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Deferred offering costs payable | $ | |||||
Note payable to stockholder | 50,000 | |||||
Total current liabilities | $ | |||||
Commitments | ||||||
Stockholders’ equity | ||||||
Preferred stock, $.0001 par | ||||||
value; Authorized 1,000,000 shares; none issued | — | |||||
Common stock, $.0001 par | ||||||
value; Authorized 16,000,000 shares, | ||||||
Additional paid-in capital | ||||||
Accumulated deficit | ( | ) | ||||
Total stockholders’ equity | ||||||
Total liabilities and stockholders’ equity | $ |
(1) | Includes an aggregate of |
$ | ||||||
Operating loss | (1,324 | ) | ||||
Other income: | ||||||
Interest income | 1 | |||||
Net loss | $ | ( | ) | |||
Weighted average shares outstanding(1) | ||||||
Basic and diluted net loss per share | $ | (0.00 | ) |
(1) | Excludes an aggregate of |
Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares(1) | Amount | Additional Paid-In Capital | Accumulated deficit | Shareholders’ Equity | Shares(1) | Amount | Additional Paid-In Capital | Accumulated deficit | Shareholders’ Equity | |||||||||||||||||||||||||||||||||||
Common shares issued to initial stockholders | 2,875,000 | $ | 288 | $ | 24,712 | $ | — | $ | 25,000 | 3,026,250 | $ | 303 | $ | 24,697 | $ | — | $ | 25,000 | ||||||||||||||||||||||||||
Net Loss | — | — | — | (493 | ) | (493 | ) | — | — | — | (1,323 | ) | (1,323 | ) | ||||||||||||||||||||||||||||||
Balance at May 31, 2014 | 2,875,000 | $ | 288 | $ | 24,712 | $ | (493 | ) | $ | 24,507 | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | 3,026,250 | $ | 303 | $ | 24,697 | $ | (1,323 | ) | $ | 23,677 |
(1) | Includes an aggregate of |
Cash flow from operating activities | ||||||
Net loss | $ | ( | ) | |||
Net cash used in operating activities | ( | ) | ||||
Cash flows from financing activities | ||||||
Payment of deferred offering costs associated with inital public offering | (72,562 | ) | ||||
Proceeds from sale of shares of common stock to initial stockholders | 25,000 | |||||
Proceeds from note payable, stockholder | 50,000 | |||||
Net cash provided by financing activities | ||||||
Net increase in cash and cash equivalents | ||||||
Cash and cash equivalents at beginning of period | — | |||||
Cash and cash equivalents at end of period | $ | |||||
Non-cash | ||||||
Accrual of deferred offering costs | $ |
TableEffective November 7, 2014, the Company’s Board of Contents
Initial Trustees’ fee | $ | 1,000 | (1) | |||
SEC Registration Fee | 15,000 | |||||
FINRA filing fee | 18,000 | |||||
Accounting fees and expenses | 40,000 | |||||
Nasdaq listing fees | ||||||
Printing and engraving expenses | 45,000 | |||||
Directors & Officers liability insurance premiums | 75,000 | (2) | ||||
Legal fees and expenses | 250,000 | |||||
Miscellaneous | (3) | |||||
Total | $ | 575,000 |
(1) | In addition to the initial acceptance fee that is charged by Continental Stock Transfer & Trust Company, as trustee, the registrant will be required to pay to Continental Stock Transfer & Trust Company $16,100 for acting as trustee, as transfer agent of the registrant’s shares of common stock, as |
(2) | This amount represents the approximate amount of director and officer liability insurance premiums the registrant anticipates paying following the consummation of its initial public offering and until it consummates a business combination. |
(3) | This amount represents additional expenses that may be incurred by the Company in connection with the offering over and above those specifically listed above, including distribution and mailing costs. |
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 Share Certificate.** | |||||
4.3 | Specimen | |||||
4.4 | Form of | |||||
5.1 | Opinion of Graubard Miller. | |||||
10.1 | Form of Letter Agreement among the Registrant, Cantor Fitzgerald & Co. and the Company’s officers, directors and stockholders. | |||||
10.2 | Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.** | |||||
10.3 | Form of Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders.** | |||||
10.4 | Form of Promissory Note issued to Eric S. Rosenfeld.** | |||||
10.5 | Form of Registration Rights Agreement among the Registrant and the Initial Stockholders.** | |||||
10.6.2 | Subscription Agreement among the Registrant, Graubard Miller and David D. Sgro. | |||||
10.6.3 | Subscription Agreement among the Registrant, Graubard Miller and Greg Monahan. | |||||
10.6.4 | Subscription Agreement among the Registrant, Graubard Miller and Tom Kobylarz. |
Exhibit No. | Description | |||||
---|---|---|---|---|---|---|
10.6.5 | [Intentionally omitted]. | |||||
10.6.6 | Subscription Agreement among the Registrant, Graubard Miller and Joel Greenblatt. | |||||
10.6.7 | Subscription Agreement among the Registrant, Graubard Miller and Adam Semler. | |||||
10.6.8 | Subscription Agreement among the Registrant, Graubard Miller and John Schauerman. | |||||
10.6.9 | Subscription Agreement among the Registrant, Graubard Miller and Leonard Schlemm. ** | |||||
10.6.10 | Subscription Agreement among the Registrant, Graubard Miller and Jeff Hastings.** | |||||
10.6.11 | Subscription Agreement among the Registrant, Graubard Miller and DKU 2013 LLC.** | |||||
10.6.12 | Subscription Agreement among the Registrant, Graubard Miller and Halcyon Master Fund L.P., ** | |||||
10.6.13 | [Intentionally omitted] | |||||
10.6.14 | Subscription Agreement among the Registrant, Graubard Miller and Covalent Capital Partners Master Fund, L.P.** | |||||
10.6.15 | Subscription Agreement among the Registrant and Cantor Fitzgerald & Co.** | |||||
10.7 | Form of letter agreement between Crescendo Advisors II, LLC and the Registrant.** | |||||
10.8 | Financial Advisor Agreement. ** | |||||
10.9 | Form of confirmation letter from each Initial | |||||
14 | Form of Code of Ethics.** | |||||
23.1 | Consent of Marcum LLP. | |||||
23.2 | Consent of Graubard Miller (included in Exhibit 5.1).** | |||||
24 | Power of Attorney (included on signature page of this Registration Statement). | |||||
99.1 | Form of Audit Committee Charter.** |
99.2 | Form of Nominating Committee Charter.** | |||||
99.3 | Form of Compensation Committee Charter.** |
** |
(a) | The undersigned registrant hereby undertakes: |
HARMONY MERGER CORP. | ||||||||||
By: | /s/ Eric S. Rosenfeld | |||||||||
Name: | Eric S. Rosenfeld | |||||||||
Title: | Chief Executive Officer |
Name | Position | Date | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ Eric S. Rosenfeld Eric S. Rosenfeld | Chairman of the Board and Chief Executive Officer (Principal executive officer) | |||||||||
/s/ Thomas Kobylarz Thomas Kobylarz | Chief Financial Officer (Principal financial and accounting officer) | |||||||||
/s/ David D. Sgro David D. Sgro | Chief Operating Officer and Director | |||||||||
/s/ John P. Schauerman John P. Schauerman | Director | |||||||||
/s/ Adam J. Semler Adam J. Semler | Director | |||||||||
/s/ Leonard B. Schlemm Leonard B. Schlemm | Director |