Mintz Levin Cohn Ferris Glovsky and Popeo PC | Boston Washington Reston New York New Haven Los Angeles London | Chrysler Center 666 Third Avenue New York, New York 10017 212 935 3000 212 983 3115 fax www.mintz.com |
Fax Cover Sheet
Date: | October 16, 2007 |
From: | Jeffrey P. Schultz Direct Dial 212 692 6732 jschultz@mintz.com |
To:
Name | Company | Business # | Fax # |
| Brian Bandari | Securities and Exchange Commission | (202) 551-3390 | (202) 772-9206 |
| | | | |
Message:
Re: Secure America Acquisition Corp. Form S-1/A Attached is the revised analysis for previous comment #5 resulting from the change in the warrant exercise price. Please let us know if this is acceptable to you. Thanks and regards, Jeff |
| |
We are sending a total of 3 pages, including this cover sheet.
Please call us at 212.692.6826, if you experience any problems.
STATEMENT OF CONFIDENTIALITY
THE INFORMATION CONTAINED IN THIS FAX IS INTENDED FOR THE EXCLUSIVE USE OF THE ADDRESSEE AND MAY CONTAIN CONFIDENTIAL OR PRIVILEGED INFORMATION. IF YOU ARE NOT THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY FORM OR DISSEMINATION OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF THIS FAX WAS SENT IN ERROR, PLEASE IMMEDIATELY NOTIFY US BY PHONE.
The Company has concluded the warrants to be sold in the private placement to management for $1.00 per warrant will not result in a compensation expense because the $1.00 sales price equals at least the fair value of the warrants. The Company has calculated the fair value of the warrants largely taking into consideration the trading history of warrants of similar-type transactions (subsequent to the separation of the components to the units) and to a smaller extent various features applicable to the private placement warrants that support the $1.00 purchase price per warrant. In determining the market value of the warrant, the Company has analyzed a sample of similar-type transactions consummated during the last six months and in doing so reviewed the trading price of the public warrants. The average trading price on the first day of trading following separation of the units for public warrants of special purpose acquisition companies with a Unit offering price of $8.00 and a warrant exercise price of $6.00 is $0.84. The average trading price on the first day of trading following separation of the units for public warrants of special purpose acquisition companies with a Unit offering price of $8.00 and a warrant exercise price of either $5.00 or $5.50 is $0.94. The Company has concluded that since the lowering of the warrant exercise price of $0.75 has had a minimal impact on the trading price of the public warrants of such special purpose acquisition companies, then the Company’s public warrants, with an exercise price of $5.25, can be reasonably valued at $1.00 or less. Attached hereto is a schedule of the companies analyzed and their closing prices on the first day of trading after separation of the units.
In addition, it should also be recognized in determining the fair value of the private placement warrants that one must consider certain features that actually support the application of a discount to fair market value. Neither these warrants, nor the underlying shares of common stock, are transferable until consummation of a business combination and they cannot be transferred in the public market unless registered under the Securities Act of 1933, as amended ("Act"). This is in contrast to the public warrants, which are transferable by the holders immediately upon separation of the units, the result of which is that such holders will have the opportunity to trade such warrants in the public market prior to the consummation of the business combination and realize a profit during such period, which the holders of the private placement warrants will not have. The illiquid founders' warrants are not worth more than the publicly registered warrants.
Secure America Acquisition Corporation
Comparison of Similar Blank Check Company Warrant Closing Price
Based on First Day of Trading
| | | | | Unit | | Strike | | First Trade | | Closing | |
Company | | Symbol | | Price | | Price | | Date | | Price | |
| | | | | | | | | | | | |
| MBF Healthcare | | | MBH.WS | | $ | 8.00 | | $ | 6.00 | | | 7/2/2007 | | $ | 0.90 | |
| Advanced Technology | | | AXC.WS | | $ | 8.00 | | $ | 6.00 | | | 7/11/2007 | | $ | 0.78 | |
| KBL Healthcare III | | | KHA.WS | | $ | 8.00 | | $ | 6.00 | | | 8/1/2007 | | $ | 0.75 | |
| Santa Monica Media Corp | | | MEJ.WS | | $ | 8.00 | | $ | 6.00 | | | 4/18/2007 | | $ | 0.64 | |
| Tailwind Financial | | | TNF.WS | | $ | 8.00 | | $ | 6.00 | | | 5/16/2007 | | $ | 0.85 | |
| Columbus Acquisition | | | BUS.WS | | $ | 8.00 | | $ | 6.00 | | | 5/30/2007 | | $ | 0.85 | |
| China Fortune | | | CFAWF | | $ | 8.00 | | $ | 6.00 | | | 8/9/2007 | | $ | 1.05 | |
| Arcade | | | ACDQW | | $ | 8.00 | | $ | 6.00 | | | 6/14/2007 | | $ | 0.90 | |
| Apex Bioventures | | | PEX.WS | | $ | 8.00 | | $ | 6.00 | | | 6/20/2007 | | $ | 0.80 | |
| | | | | | | | | | | | | | | | | |
| | | | High | | | Low | | | | | | | | | Average | |
Range | | $ | 1.05 | | $ | 0.64 | | | | | | | | $ | 0.84 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | Unit | | | Strike | | | First Trade | | | Closing | |
Company | | | Symbol | | | Price | | | Price | | | Date | | | Price | |
| | | | | | | | | | | | | | | | | |
| Media and Entertainment | | | TVHWS | | $ | 8.00 | | $ | 5.00 | | | 4/9/2007 | | $ | 0.82 | |
| Vector Intersect Security | | | VTRQW | | $ | 8.00 | | $ | 5.00 | | | 8/20/2007 | | $ | 0.95 | |
| Trans Tech Services | | | TTSPW | | $ | 8.00 | | $ | 5.00 | | | 7/3/2007 | | $ | 1.02 | |
| Stone Leigh Partners | | | SOCWS | | $ | 8.00 | | $ | 5.50 | | | 6/26/2007 | | $ | 0.92 | |
| Alyst Acquisition | | | AYAWS | | $ | 8.00 | | $ | 5.00 | | | 7/16/2007 | | $ | 0.82 | |
| InterAmerican | | | IAQGW | | $ | 8.00 | | $ | 5.00 | | | 9/20/2007 | | $ | 1.10 | |
| | | | | | | | | | | | | | | | | |
| | | | High | | | Low | | | | | | | | | Average | |
Range | | $ | 1.10 | | $ | 0.82 | | | | | | | | $ | 0.94 | |
