ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) FINANCIAL STATEMENTS 1 ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 3 FINANCIAL STATEMENTS Balance Sheets 4 Statements of Operations 5 Statements of Stockholders' Equity 6 Statements of Cash Flows 7 NOTES TO FINANCIAL STATEMENTS 8-11 2 ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors Aldabra Acquisition Corporation We have audited the accompanying balance sheets of Aldabra Acquisition Corporation (a corporation in the development stage) as of December 31, 2004 and February 24, 2005, and the related statements of operations, stockholders' equity and cash flows for the periods from November 22, 2004 (inception) to December 31, 2004, January 1, 2005 to February 24, 2005 and November 22, 2004 (inception) to February 24, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Aldabra Acquisition Corporation as of December 31, 2004 and February 24, 2005, and the results of its operations and its cash flows for the periods from November 22, 2004 (inception) to December 31, 2004, January 1, 2005 to February 24, 2005 and November 22, 2004 (inception) to February 24, 2005 in conformity with United States generally accepted accounting principles. /s/ Goldstein Golub Kessler LLP GOLDSTEIN GOLUB KESSLER LLP New York, New York February 24, 2005 3 ALDABRA ACQUISITION CORPORATION (a corporation in the development stage) BALANCE SHEETS December 31, 2004 February 24, 2005 ----------------- ----------------- ASSETS Cash and cash equivalents $ 11,095 $ 1,680,931 Cash held in Trust Fund -- 42,640,000 Prepaid expenses -- 12,713 Deferred offerring costs 83,905 -- ------------ ------------ Total Assets $ 95,000 $ 44,333,644 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accrued Expenses $ 1,100 $ 104,034 Notes payable, stockholders 70,000 70,000 ------------ ------------ Total liabilities 71,100 174,034 ------------ ------------ Common stock, subject to possible redemption, 1,599,200 shares at conversion value (Note 1) -- 8,523,736 ------------ ------------ Commitment Stockholders' Equity Preferred stock, $.0001 par value, authorized 1,000,000 shares, none issued Common stock, $.0001 par value, 35,000,000 shares authorized; issued and outstanding 2,000,000 shares and 10,000,000 shares (which includes 1,599,200 shares subject to possible conversion) respectively 200 1,000 Additional paid-in capital 24,800 35,638,688 Deficit accumulated during the development stage (1,100) (3,814) ------------ ------------ Total stockholders' equity 23,900 35,635,874 ------------ ------------ Total liabilities and stockholders' equity $ 95,000 $ 44,333,644 ============ ============ See accompanying notes to financial statements 4 ALDABRA ACQUISITION CORPORATION (a corporation in the development stage) STATEMENTS OF OPERATIONS - -------------------------------------------------------------------------------- For the period from For the period from For the period from November 22, 2004 (inception) January 1, 2005 November 22, 2004 (inception) to December 31, 2004 to February 24, 2005 to February 24, 2005 -------------------- -------------------- -------------------- Formation and operating costs $ 1,100 $ 2,714 $ 3,814 ----------- ----------- ----------- Net loss $ (1,100) $ (2,714) $ (3,814) =========== =========== =========== Weighted average shares outstanding 2,000,000 3,163,636 2,673,684 =========== =========== =========== Net loss per share - basic and diluted $ (0.00) $ (0.00) $ (0.00) =========== =========== =========== See accompanying notes to financial statements 5 ALDABRA ACQUISITION CORPORATION (a corporation in the development stage) STATEMENTS OF STOCKHOLDERS' EQUITY - -------------------------------------------------------------------------------- Deficit Accumulated Common Stock Additional During the Stockholders' Shares Amount paid-in capital Development Stage Equity ------ ------ --------------- ----------------- ------ Common shares issued November 22, 2004 at $.025 per share 1,000,000 $ 100 $ 24,900 $ 25,000 Effect of stock dividend 1,000,000 100 (100) 0 Net loss (1,100) (1,100) ---------- ------- ----------- -------- ----------- Balance at December 31, 2004 2,000,000 200 24,800 (1,100) 23,900 ---------- ------- ----------- -------- ----------- Sales of 8,000,000 units, net of underwriters' discount and offering expenses (includes 1,599,200 shares subject to possible conversion) 8,000,000 800 44,137,624 44,138,424 Proceeds subject to possible conversion of 1,599,200 shares (8,523,736) (8,523,736) Net loss (2,714) (2,714) ---------- ------- ----------- -------- ----------- Balance at February 24, 2005 10,000,000 $ 1,000 $35,638,688 $ (3,814) $35,635,874 ========== ======= =========== ======== =========== See accompanying notes to financial statements 6 ALDABRA ACQUISITION CORPORATION (a corporation in the development stage) STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------- For the period from For the period from For the period from November 22, 2004 (inception) January 1, 2005 November 22, 2004 (inception) to December 31, 2004 to February 24, 2005 to February 24, 2005 -------------------- -------------------- -------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (1,100) $ (2,714) $ (3,814) Increase in prepaid expenses (12,713) (12,713) Increase in accrued expenses 1,100 775 1,875 -------- ----------- ----------- Net cash used in operating activities - (14,652) (14,652) -------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Cash held in Trust Fund - (42,640,000) (42,640,000) -------- ----------- ----------- Net cash used in investing activities - (42,640,000) (42,640,000) -------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable, stockholders 70,000 70,000 Proceeds from sale of common stock 25,000 48,000,000 48,025,000 Payment of costs of public offering (83,905) (3,675,512) (3,759,417) -------- ----------- ----------- Net cash provided by financing activities 11,095 44,324,488 44,335,583 -------- ----------- ----------- Net increase in cash 11,095 1,669,836 1,680,931 Cash and cash equivalents, beginning of period - 11,095 - -------- ----------- ----------- Cash and cash equivalents, end of period $ 11,095 $ 1,680,931 $ 1,680,931 ======== =========== =========== Supplemental Schedule of non-cash financing activity: Accrued costs of public offering $ - $ 102,159 $ 102,159 ======== =========== =========== See accompanying notes to financial statements 7 ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- ORGANIZATION Aldabra Acquisition Corporation (the 1. AND "Company") was incorporated in Delaware on BUSINESS November 22, 2004 as a blank check company OPERATIONS whose objective is to acquire an operating business. All activity from November 22, 2004 (inception) through February 24, 2005 relates to the Company's formation and initial public offering described below. The Company has selected December 31 as its fiscal year-end. The registration statement for the Company's initial public offering ("Offering") was declared effective February 17, 2005. The Company consummated the offering on February 24, 2005 and received net proceeds of approximately $44,138,000 (Note 2). The Company's management has broad discretion with respect to the specific application of the net proceeds of this Offering, although substantially all of the net proceeds of this Offering are intended to be generally applied toward consummating a business combination with an operating business ("Business Combination"). Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. An amount of $42,640,000 of the net proceeds is being held in an interest-bearing trust account ("Trust Account") until the earlier of (i) the consummation of a Business Combination or (ii) liquidation of the Company. Under the agreement governing the Trust Account, funds will only be invested in United States government securities (Treasury Bills) with a maturity of 180 days or less. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. The Company, after signing a definitive agreement for the acquisition of a target business, will submit such transaction for stockholder approval. In the event that stockholders owning 20% or more of the shares sold in the Offering vote against the Business Combination and exercise their conversion rights described below, the Business Combination will not be consummated. 8 ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- All of the Company's stockholders prior to the Offering, including all of the officers and directors of the Company ("Initial Stockholders"), have agreed to vote their 2,000,000 founding shares of common stock in accordance with the vote of the majority in interest of all other stockholders of the Company ("Public Stockholders") with respect to any Business Combination. After consummation of the a Business Combination, these voting safeguards will no longer be applicable. With respect to a Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company convert his shares. The per share conversion price will equal the amount in the Trust Account, calculated as of two business days prior to the consummation of the proposed Business Combination, divided by the number of shares of common stock held by Public Stockholders at the consummation of the Proposed Offering. Accordingly, Public Stockholders holding 19.99% of the aggregate number of shares owned by all Public Stockholders may seek conversion of their shares in the event of a Business Combination. Such Public Stockholders are entitled to receive their per share interest in the Trust Account computed without regard to the shares held by Initial Stockholders. Accordingly, a portion of the net proceeds from the offering (19.99% of the amount held in the Trust Account) has been classified as common stock subject to possible conversion in the accompanying February 24, 2005 balance sheet. The Company's Amended and Restated Certificate of Incorporation provides for mandatory liquidation of the Company in the event that the Company does not consummate a Business Combination within 18 months from the date of the consummation of the Offering, or 24 months from the consummation of the Offering if certain extension criteria have been satisfied. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per share in the Offering due to costs related to the Offering and since no value would be attributed to the Warrants contained in the Units sold (Note 2). Deferred income taxes are provided for the differences between the bases of assets and liabilities for financial reporting and income tax purposes. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recorded a deferred income tax asset for the tax effect of net operating loss carryforwards and temporary differences, aggregating approximately $375 and $1,100 at December 31, 2004 and February 24, 2005 9 ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- respectively. In recognition of the uncertainty regarding the ultimate amount of income tax benefits to be derived, the Company has recorded a full valuation allowance at December 31, 2004 and February 24, 2005. The effective tax rate differs from the statutory rate of 34% due to the increase in the valuation allowance. Loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. 2. INITIAL PUBLIC OFFERING On February 24, 2005, the Company sold 8,000,000 units ("Units") in the Offering. Each Unit consists of one share of the Company's common stock, $.0001 par value, and two Redeemable Common Stock Purchase Warrants ("Warrants"). Each Warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $5.00 commencing the later of the completion of a Business Combination or one year from the effective date of the Offering and expiring four years from the effective date of the Offering. The Warrants will be redeemable at a price of $.01 per Warrant upon 30 days' notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $8.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given. 3. NOTES PAYABLE, The Company issued an aggregate of $70,000 of STOCKHOLDERS unsecured promissory notes to two Initial Stockholders, who are also officers. The notes are non interest-bearing and will be paid following the consummation of the Offering from the net proceeds of such Offering. 10 ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 4. COMMITMENT The Company utilizes certain administrative, technology and secretarial services, as well as certain limited office space provided by an affiliate of two Initial Stockholders. Such affiliate has agreed that, until the acquisition of a target business by the Company, it will make such services available to the Company, as may be required by the Company from time to time. The Company has agreed to pay such affiliate $7,500 per month for such services commencing on the effective date of the Offering. The statement of operations for the periods ended February 24, 2005 includes $1,875 related to this agreement. The Company has engaged Morgan Joseph & Co. Inc. to act as its investment banker in connection with a Business Combination. The Company has agreed to pay Morgan Joseph & Co. a cash fee at the closing of the Business Combination for assisting the Company in structuring and negotiating the terms of the transaction equal to 2.15% of the gross proceeds raised in the Offering, including any proceeds the Company receives as a result of the exercise of the underwriters' over-allotment option. The Company has further engaged Morgan Joseph & Co., on a non-exclusive basis, as agent for the solicitation of the exercise of the Warrants. To the extent not inconsistent with the guidelines of the NASD and the rules and regulations of the SEC, the Company has agreed to pay Morgan Joseph & Co., for bona fide services rendered, a commission equal to 5% of the exercise price for each Warrant exercised more than one year after the effective date of the Proposed Offering if the exercise was solicited by the underwriters. Two Initial Stockholders, who are also officers, have agreed with Morgan Joseph & Co. that after consummation of the Offering and within the first forty trading days after separate trading of the Warrants has commenced, that they or certain of their affiliates or designees will collectively purchase up to 1,571,429 Warrants in the public marketplace at prices not to exceed $0.70 per Warrant. 5. PREFERRED STOCK The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. 6. COMMON STOCK On January 27, 2005, the Company's Board of Directors authorized a stock dividend of one share of common stock for each outstanding share of common stock outstanding. In addition, on January 27, 2005, the Company's Board of Directors approved an amendment to the Company's Certificate of Incorporation to increase the number of 11 ALDABRA ACQUISITION CORPORATION (A CORPORATION IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- authorized shares of common stock to 35,000,000. All references in the accompanying financial statements to the number of shares of stock have been retroactively restated to reflect these transactions. At February 24, 2005, 16,000,000 shares of common stock were reserved for issuance upon exercise of redeemable warrants. 12
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Filed: 24 Feb 05, 12:00am