FlatWorld Acquisition 10Q 2014 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014


q	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number:000-54173

FLATWORLD ACQUISITION CORP.

(Exact name of registrant as specified in its charter)


British Virgin Island	98-0666872
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)


Palm Grove House, Road Town
Tortola, British Virgin Islands	VG1110
(Address of principal executive offices)	(Zip Code)

+1 (284) 545 6127

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Title of each Class

Ordinary Shares, no par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes q No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes q No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No q

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer q		Accelerated filer q
Non-accelerated filer q		Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No q

The aggregate market value of the outstanding ordinary shares, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing sales price for the Registrant’s Ordinary shares on March 31, 2014, as reported on the OTC Bulletin Board, was approximately $134,730.

As of May 15, 2014, there were 2,869,375 ordinary shares, no par value per share, of the registrant outstanding.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesþ No q

FLATWORLD ACQUISITION CORP.

TABLE OF CONTENTS


INTRODUCTION
PART I.	Financial Information
Item 1.	Condensed Consolidated Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	19

Part II.	Other Information
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	20

INTRODUCTION

Unless otherwise indicated and except where the context otherwise requires,

· references to “we,” “us,” “our,” “company” or “our company” are to FlatWorld Acquisition Corp., a company organized under the laws of the British Virgin Islands;

· references to “Securities Act” are to the United States Securities Act of 1933, as amended and references to the “Exchange Act” are to the United States Securities Exchange Act of 1934, as amended;

· references to a ‘FPI” or “FPI status” are references to a foreign private issuer as defined by and determined pursuant to Rule 3b-4 of the Exchange Act;

· references to “initial business transaction” and to “business transaction” are to our initial acquisition, share exchange, share reconstruction and amalgamation or contractual control arrangement with, or purchase of, all or substantially all of the assets of, or engaging in any other similar business transaction with, an unidentified operating business or assets;

· references to “initial shares” are to the 573,875 ordinary shares (net of 58,625 ordinary shares which were redeemed on January 25, 2011 by us as a result of partial exercise of underwriter’s over-allotment option) owned by our sponsor and purchased in a private placement prior to our initial public offering;

· references to the “Companies Act” or the “Act” mean the BVI Business Companies Act of 2004, as amended, of the British Virgin Islands;

· references to “insider warrants” are to the warrants to purchase an aggregate of 2,000,000 ordinary shares for the purchase price of $1,500,000, in a private placement that occurred on December 9, 2010;

· references to “public shares” are to ordinary shares sold as part of the units in the initial public offering (whether they were purchased in the offering or thereafter in the open market) and pursuant to exercise of underwriter’s over-allotment option;

· references to “public shareholders” are to holders of public shares, including shares purchased by insiders;

· references to our “sponsor” are to FWAC Holdings Limited, a British Virgin Islands business company with limited liability which is owned by our officers, directors, advisors, their respective affiliates and other non-affiliates;

· references to a “prospectus” are to the Company’s initial public offering prospectus dated December 9, 2010 filed with Securities and Exchange Commission;

· references to a “target business” are to one or more operating businesses or assets which, we may target for an initial business transaction; and

· all dollar amounts in are in U.S. dollars unless otherwise indicated

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to, our:

· our status as a shell company;

· our selection of a prospective target business or asset;

· our issuance of our capital shares or incurrence of debt to complete a business transaction;

· our ability to consummate an attractive business transaction due to our limited resources and the significant competition for business transaction opportunities;

· conflicts of interest of our officers and directors;

· potential current or future affiliations of our officers and directors with competing businesses;

· our ability to obtain additional financing if necessary;

· our sponsor’s ability to control or influence the outcome of matters requiring shareholder approval due to its substantial interest in us;

· the adverse effect on the market price our ordinary shares due to the existence of registration rights with respect to the securities owned by our sponsor;

· the lack of a market for our securities;

· our being deemed an investment company;

· our dependence on our key personnel;

· our dependence on a single company after our business transaction;

· environmental, permitting and other regulatory risks;

· foreign currency fluctuations and overall political risk in foreign jurisdictions;

· our operating and capital expenditures;

· our competitive position; and

· expected results of operations and/or financial position.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.

These forward-looking statements are subject to numerous risks, uncertainties and assumptions about us described in our filings with the Securities and Exchange Commission. The forward-looking events we discuss in this Quarterly Report on Form 10-Q speak only as of the date of such statement and might not occur in light of these risks, uncertainties and assumptions. Except as required by applicable law, we undertake no obligation and disclaim any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I.FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS