As
filed with the Securities and Exchange Commission on September 7,
2007
File
No. 333 -
144871
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________________
Amendment
No. 1
to
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
NRDC
ACQUISITION CORP.
(Exact
name of Registrant as specified in its charter)
Delaware
(State
or other jurisdiction of
incorporation
or organization)
6770
(Primary
Standard Industrial
Classification
Code Number)
3
Manhattanville Road
Purchase,
New York 10577
(914)
272-8067
26-0500600
(I.R.S.
Employer
Identification
Number)
(Address,
including zip code and telephone number, including area code, of registrant’s
principal executive offices)
____________________________
Richard
A. Baker, Chief Executive Officer
3
Manhattanville Road
Purchase,
New York 10577
(914)
272-8067
(Name,
address, including zip code and telephone number, including area code, of agent
for service)
____________________________
Copies
to:
Jack
I. Kantrowitz, Esq.
Samir
A. Gandhi, Esq.
Floyd
I. Wittlin, Esq.
Sidley
Austin LLP
Bingham
McCutchen LLP
787
Seventh Avenue
399
Park Avenue
New
York, New York 10019
New
York, New York 10022
(212)
839-5300
(212)
705-7000
(212)
839-5599—Facsimile
(212)
702-3625—Facsimile
________________________________
Approximate
date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If
any of
the securities being registered on this Form are being offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check
the
following box. ý
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If
this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of
Security
to be Registered
Amount
being
Registered
Proposed
Maximum
Offering
Price
per Security(1)
Proposed
Maximum
Aggregate
Offering
Price(1)
Amount
of
Registration
Fee
Units,
each consisting of one share of Common
Stock, $.0001 par value, and one Warrant(2)
34,500,000
Units
$10.00
$345,000,000
$10,592
Shares
of Common stock included as part of the Units
34,500,000
Shares
---
---
---
(3)
Warrants
included as part of the Units
34,500,000
Warrants
---
---
---
(3)
Shares
of Common Stock underlying the Warrants included in the Units(4)
34,500,000
Shares
$7.50
$258,750,000
$7,944
Total
$603,750,000
$18,536(5)
(1)
Estimated
solely for the purpose of calculating the registration
fee.
(2)
Includes
4,500,000 Units and 4,500,000 shares of Common Stock and 4,500,000
Warrants underlying such Units which may be issued on exercise of
a 30-day
option granted to the Underwriters to cover over-allotments, if
any.
(3)
No
fee required pursuant to Rule
457(g).
(4)
Pursuant
to Rule 416, there are also being registered such additional securities
as
may be issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions as a result of the anti-dilution
provisions contained in the
Warrants.
(5)
$12,372
of which was previously paid.
__________________
The
Registrant hereby amends this Registration Statement on such date or dates
as
may be necessary to delay its effective date until the Registrant shall file
a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the Registration Statement shall become effective
on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
The
Information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is declared
effective. This preliminary prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any
state
where the offer or sale is not permitted.
Subject
to Completion, dated September 7,
2007
PROSPECTUS
$300,000,000
NRDC
ACQUISITION CORP.
30,000,000
Units
___________________________________
NRDC
Acquisition Corp. is a recently organized blank check company formed to acquire
one or more operating businesses through a merger, capital stock exchange,
stock
purchase, asset acquisition or similar business combination. Our
efforts in identifying a prospective target business will not be limited to
a
particular industry or geographic location. We do not have any
specific business combination under consideration or
contemplation. We have not, nor has anyone on our behalf, contacted
or been contacted by, any potential target business or had any discussions,
formal or otherwise, with respect to such a transaction.
This
is
an initial public offering of our securities. Each unit will be
offered at a price of $10.00 per unit and will consist of:
• one
share of our common stock; and
• one
warrant.
Each
warrant entitles the holder to purchase one share of our common stock at a
price
of $7.50. Each warrant will become exercisable on the later of our
consummation of an initial business combination or ___________, 2008 and will
expire on _________, 2011 or earlier upon redemption of the warrants by
us.
NRDC
Capital Management, LLC, an entity indirectly owned and controlled by our
executive officers, has agreed to purchase an aggregate of 8,000,000 warrants
from us at a price of $1.00 per warrant for an aggregate purchase price of
$8,000,000 in a private placement immediately prior to the completion of this
offering. All of the proceeds we receive from this purchase will be
placed in the trust account described below. The “private placement
warrants” to be purchased will be identical to the warrants underlying the units
being offered by this prospectus except that the private placement warrants
are
exercisable on a cashless basis so long as they are held by the original
purchaser or its permitted transferees. NRDC Capital Management, LLC
has agreed that, with certain exceptions, the private placement warrants will
not be sold or transferred until after we have consummated our initial business
combination. None of the shares purchased by NRDC Capital Management,
LLC prior to the completion of this offering will have any right to liquidating
distributions in the event we fail to consummate a business
combination. The holders of our common stock on the date of this
prospectus, whom we refer to as our existing stockholders, including our
executive officers and directors, have agreed that they will vote all shares
of
common stock owned by them prior to the completion of this offering with respect
to a business combination in the same manner that the majority of the shares
of
common stock offered hereby are voted by our public stockholders, other than
our
existing stockholders, and they will not have any conversion rights with respect
to such shares.
In
addition, NRDC Capital Management, LLC has agreed to purchase from us an
aggregate of 2,000,000 of our units, which we refer to as the co-investment,
at
a price of $10.00 per unit for an aggregate purchase price of $20,000,000
in a
private placement that will occur immediately prior to our consummation of
our
initial business combination. These co-investment units will be
identical to the units sold in this offering except that the common
stock and the warrants included in the co-investment units, and the common
stock
issuable upon exercise of those warrants, with certain limited exceptions,
may
not be transferred or sold for one year after the consummation of our initial
business combination. Additionally, the warrants included in the
co-investment units are (1) exercisable only after the date on which the
last sales price of our common stock on the American Stock Exchange, or other
national securities exchange on which our common stock may be traded, equals
or
exceeds $14.25 per share for any 20 trading days within any 30-trading-day
period beginning at least 90 calendar days after the consummation of our
initial
business combination, (2) exercisable on a cashless basis so long as they
are
held by the original purchaser or its permitted transferees and (3) not subject
to redemption by us.
NRDC
Capital Management, LLC, NRDC Real Estate Advisors, LLC and NRDC Equity Partners
and our executive officers and directors have also entered into a right of
first
offer agreement under the terms of which they have agreed, subject to their
pre-existing fiduciary responsibilities, if any, to submit opportunities
to
enter into a business combination with an operating business to us before
any
other entity.
We
have
granted the underwriters a 30-day option to purchase up to 4,500,000 additional
units solely to cover over-allotments, if any. The over-allotment
option will be used only to cover the net short position resulting from the
initial distribution.
There
is
currently no public market for our units, common stock or
warrants. We anticipate that the units will be listed on the American
Stock Exchange under the symbol NAQ.U on or promptly after the date of
this
prospectus. The
common stock and warrants each will begin separate trading five trading days
after the earlier to occur of the termination of the underwriters’
over-allotment option or the exercise in full by the underwriters of that
option. Once the securities comprising the units begin separate
trading, we anticipate that the common stock and warrants will be listed on
the
American Stock Exchange under the symbols NAQ and NAQ.WS,
respectively. We cannot assure you, however, that our securities will
be or will continue to be listed on the American Stock Exchange.
___________________________________
Investing
in our securities involves a high degree of risk. See “Risk Factors”
beginning on page 20 of this prospectus for a discussion of information that
should be considered in connection with an investment in our
securities.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a
criminal offense.
Per
Unit
Total(1)
Public
Offering Price
$ 10.00
$300,000,000
Underwriting
Discounts and Commissions(2)(3)
$ 0.70
$21,000,000
Proceeds,
Before Expenses, to Us
$ 9.30
$279,000,000
(1)
The
underwriters have an option to purchase up to an additional 4,500,000
units at the public offering price, less underwriting discounts
and
commissions, within 30 days of the date of this prospectus to cover
any
over-allotments. If the underwriters exercise this option in
full, the total public offering price, underwriting discounts and
commissions and proceeds, before expenses, to us, will be $345,000,000,
$24,150,000 and $320,850,000, respectively. See the section
entitled “Underwriting” on page 104 of this
prospectus.
(2)
Includes
deferred underwriting discounts and commissions equal to 3.0% of
the gross
proceeds, or $9,000,000 ($10,350,000 if the underwriters’ over-allotment
option is exercised in full), or $0.30 per unit, which will be
deposited
in a trust account at JPMorgan Chase Bank, N.A., maintained by
Continental Stock Transfer & Trust Company, as trustee, and which the
underwriters have agreed to defer until the consummation of our
initial
business combination. However, the underwriters have waived
their right to the deferred discounts and commissions with respect
to
those units as to which the component shares have been converted
into cash
by public stockholders who voted against the business combination
and
exercised their conversion rights. See “Underwriting—Discounts
and Commissions.”
(3)
Of
the net proceeds we receive from this offering and in the private
placement, including deferred underwriting discounts and commissions
of
$9,000,000 ($10,350,000, if the underwriters’ over-allotment option is
exercised in full), or $0.30 per unit, $294,950,589 ($338,150,589
if the
underwriters’ over-allotment option is exercised in full), or
approximately $9.83 per unit, will be deposited in a trust account
at
JPMorgan Chase Bank, N.A., maintained by Continental Stock Transfer
& Trust Company, as trustee. The underwriters are not
receiving any discounts or commissions with respect to the warrants
to be
purchased in the private
placement.
We
are
offering the units for sale on a firm-commitment basis. Banc of
America Securities LLC is acting as the sole manager of this offering and
expects to deliver our securities to investors in the offering on or about
_________, 2007.
Banc
of America Securities LLC
The
date
of this prospectus is _____________, 2007.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
53
PROPOSED
BUSINESS
56
MANAGEMENT
79
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
84
PRINCIPAL
STOCKHOLDERS
88
DESCRIPTION
OF SECURITIES
90
UNITED
STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS
98
UNDERWRITING
104
LEGAL
MATTERS
109
EXPERTS
110
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
110
You
should rely only on the information contained in this prospectus. We
have not, and the underwriters have not, authorized anyone to provide you with
different information. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front cover
of
this prospectus, as our business financial condition, results of operation
and
prospects may have changed since that date.
PROSPECTUS
SUMMARY
This
summary highlights certain information appearing elsewhere in this
prospectus. For a more complete understanding of this offering you
should read the entire prospectus carefully including the risk factors and
the
financial statements and the related notes and schedules
thereto. Unless we tell you otherwise, the information in this
prospectus assumes that the underwriters have not exercised their over-allotment
option. In making your decision whether to invest in our securities,
you should take into account not only the backgrounds of the members of our
management team, but also the special risks we face as a blank check company
and
the fact that this offering is not being conducted in compliance with Rule
419
promulgated under the Securities Act of 1933, as amended, which we refer
to as
the Securities Act. You will not be entitled to protection normally
afforded to investors in Rule 419 blank check offerings. You should
carefully consider these and the other risks set forth in the section below
entitled “Risk Factors” beginning on page 20 of this prospectus. Unless
otherwise stated in this prospectus,
•
references
to “we,” “us,” or “our” refer to NRDC Acquisition
Corp.;
•
the
term “business combination” as used in this prospectus means an
acquisition by us through a merger, capital stock exchange, stock
purchase, asset acquisition, or other similar business combination
with one or more operating
businesses;
•
the
term “existing stockholders” refers to those persons who owned shares of
our common stock immediately prior to the completion of this offering
and
includes all of our executive officers and
directors;
•
the
term “sponsor” refers to NRDC Capital Management, LLC, one of our existing
stockholders;
•
the
term “public stockholder” refers to those persons who purchase securities
offered by this prospectus in this offering or in the secondary market,
including any of our existing stockholders;
and
•
the
information in this prospectus reflects a 6 for 5 stock split of
our
common stock to be effected prior to this
offering.
However,
our existing stockholders’ status as a “public stockholder” shall exist only
with respect to those securities offered pursuant to this
prospectus.
We
were
organized and are sponsored by NRDC Capital Management, LLC, a recently
organized Delaware limited liability company. All of the interests in
our sponsor are owned by NRDC Real Estate Advisors, LLC, which, in turn,
is
wholly-owned by William L. Mack, Robert C. Baker, Richard A. Baker and Lee
Neibart, our four executive officers. NRDC Real Estate Advisors, LLC
and its affiliate, NRDC Equity Partners, which also is wholly-owned by
our four executive officers, are referred to herein, collectively, as
NRDC. Our sponsor will provide administrative services to us, but
otherwise has no business activities other than sponsoring
us.
We
are a
recently organized blank check company formed to complete a business combination
with one or more operating businesses. Our efforts in identifying a
prospective target business will not be limited to a particular industry or
geographic location, but will focus on those opportunities that our management
believes provide opportunities for growth. We intend to initially
focus our search on businesses in the United States, but will also explore
opportunities internationally.
We
do not
have any specific business combination under consideration and we have not,
nor
has anyone on our behalf, contacted any prospective target business or had
any
discussions, formal or otherwise,
1
with
respect to such a transaction. We have not, nor have any of our
agents or affiliates, been approached by any prospective target business, or
representatives of any prospective target business, with respect to a possible
business combination with us. Additionally, we have not, nor has
anyone on our behalf, taken any action, directly or indirectly, to identify
or
locate a specific target business, and we have not engaged or retained any
agent
or representative to identify or locate a specific target business.
Given
our
management team’s expertise in the real estate sector, we will initially focus
our search for an initial business combination on operating businesses
where we
believe we can increase the value of the overall enterprise by altering
the
structure of or relationship between the operating business and its real
estate
and/or improving, expanding or repositioning the real estate underlying
the
operating business. We believe we can benefit from the expertise of
the members of our management team in investing in and managing operating
companies and that their skills in valuation, financial structuring, due
diligence, governance and financial and management oversight will be valuable
in
our efforts to identify a business target.
We
intend
to use some or all of the following criteria to evaluate acquisition
opportunities. However, we may enter into a business combination with
a target business that does not meet any or all of these criteria if we
believe
such target business has the potential to create significant shareholder
value.
•
An
Established Business with a Proven Operating Track
Record. We will seek established businesses with records
of strong financial performance and sound operating results,
or ones which
our management team believes have the potential for positive
operating
cash flow. It is not our intention to acquire a start-up
company.
•
Strong
Industry Position. We will seek to acquire strong
competitors in industries with appealing prospects for future
growth and
profitability. We will examine the ability of these target businesses
to
defend and improve their advantages in areas such as customer
base,
branding, intellectual property, vendor relationships, working
capital and
capital investments.
•
Experienced
Management Team. We will concentrate on target businesses
with an experienced management team that has created an effective
corporate culture and utilized best business practices in areas
such as
customer service, vendor relationships, recruiting and
retention.
•
Ability
For Us To Add Value. We will seek a target company where
our management team has identified opportunities to improve the
operating
business through the implementation of marketing, operational,
growth and
management strategies to augment the company’s existing
capabilities.
•
Underlying
Real Estate Value. Given the inherent skills and
experience of our management team, we will focus initially on
operating
businesses where we have the opportunity to create value from
the real
estate underlying the
business.
We
believe that the skills and experience of our management team will be crucial
to
consummating a successful business combination. Our executive
officers and directors have built and maintain extensive networks of
relationships that we plan to use to identify and generate acquisition
opportunities. These relationships include, among other sources,
executives and board members at public and private companies, brokers, private
equity and venture capital firms, consultants, investment bankers, attorneys
and
accountants. Our executive officers and directors have an average of
over 30 years of experience acquiring, building, operating, advising and
selling
public and private companies. Our management team
includes:
William
L. Mack – Chairman. Mr. Mack is a founder of NRDC Real
Estate Advisors, LLC and NRDC Equity Partners. He is also a founder
and Senior Partner of Apollo Real Estate Advisors and is the President of the
corporate general partners of the Apollo real estate funds. Mr. Mack
is also a Senior Partner of the Mack Organization, a national owner of
industrial buildings and other income-producing real estate
2
investments. Mr.
Mack serves as non-executive Chairman of the Board of Directors of Mack-Cali
Realty Corporation, a publicly traded real estate investment trust.
Robert
C. Baker – Vice-Chairman.Mr. Baker
is a founder of NRDC Real Estate Advisors, LLC and NRDC Equity
Partners. He is also the founder, Chairman and CEO of National Realty
& Development Corporation, a private real estate development company owned
by him and Richard A. Baker. Since 1978, National Realty &
Development Corporation has amassed a property portfolio in excess of 18 million
square feet, consisting of shopping centers, corporate business centers and
residential communities in 20 states.
Richard
A. Baker – Chief Executive Officer. Mr. Baker is a
founder and President and Chief Executive Officer of NRDC Real Estate Advisors,
LLC and NRDC Equity Partners. Mr. Baker is also vice chairman of
National Realty & Development Corporation. Richard Baker is
Chairman of Lord & Taylor Holdings, LLC.
Lee
Neibart – President.Mr.
Neibart is a founder of NRDC Real Estate Advisors, LLC and NRDC Equity
Partners. He is also a Senior Partner of Apollo Real Estate Advisors,
where he has worked since 1993. Mr. Neibart oversees the global
day-to-day activities of Apollo Real Estate Advisors including portfolio company
and fund management, strategic planning and new business
development. From 1989 to 1993, Mr. Neibart worked at the Robert
Martin Company, a commercial real estate development management
firm.
For
additional information on the background of our executive officers and
directors, please see the sections in this prospectus entitled “Proposed
Business—Experienced Executive Management Team” and “Management”.
Our
executive officers currently intend to stay involved in our management following
our initial business combination. The roles that they will fulfill
will depend on the type of business with which we combine and the specific
skills and depth of the target’s management. If one or more of our
executive officers remain with us in a management role following our initial
business combination, we may enter into employment or other compensation
arrangements with them, the terms of which have not been determined.
We
have
entered into a business opportunity right of first offer agreement with
our
sponsor, NRDC Real Estate Advisors, LLC and NRDC Equity Partners and
with our
executive officers and directors. This right of first offer provides
that from the date of this prospectus until the earlier of the consummation
of
our initial business combination or our liquidation, we will have a right
of
first offer if any of these parties becomes aware of, or involved with,
a
business combination opportunity with any operating business. Subject
to their respective pre-existing fiduciary obligations, these parties
to the
right of first offer agreement will, and will cause companies or entities
under
their management or control, to first offer any such business opportunity
to us
and they will not, and will cause each other company or entity under
their
management or control not, to pursue any such business opportunity unless
and
until our board of directors, including a majority of our disinterested
independent directors, has determined that we will not pursue such
opportunity.
We
recognize that each of our executive officers and directors may be deemed
an
affiliate of any company for which such executive officer or director
serves as
an officer or director or for which such executive officer or director
otherwise
has a pre-existing fiduciary duty and that a conflict of interest could
arise if
an opportunity is appropriate for one of such companies. As part of
this right of first offer, we have established procedures with respect
to the
sourcing of a potential business combination by our executive officers
and
directors to eliminate such conflict for our executive officers and directors,
whereby a potential business combination that must be presented to
any company for which such executive officer or director, as the case may
be, serves as an officer or director or otherwise has a pre-existing
fiduciary
duty (other than our sponsor, NRDC Real Estate Advisors, LLC and NRDC
Equity
Partners) will not be presented to us until after such executive officer
or
director has presented the opportunity to such company and such company
has
determined not to proceed.
3
While
we
may seek to consummate business combinations with more than one target business,
our initial business combination must be with one or more operating businesses
whose fair market value is at least equal to 80% of the balance in the trust
account (less the deferred underwriting discounts and commissions and taxes
payable) at the time of such acquisition. As a result, we expect that
an initial public offering of $300,000,000
will enable us to consummate an initial business combination with a business
whose fair market value is at least $228,760,471. The actual amount
of consideration which we will be able to pay for the initial business
combination will depend on whether we choose, and are able, to pay a portion
of
the initial business combination consideration with shares of our common
stock
or to finance a portion of the consideration by issuing debt or equity
securities or increasing indebtedness. No financing arrangements have
been entered into or contemplated with any third parties to raise any additional
funds, whether through the sale of securities or otherwise, that we may need
if
we decide to consummate an initial business combination for consideration
in
excess of our available assets at the time of acquisition.
We
are a Delaware corporation formed on
July 10, 2007. Our offices are located at 3 Manhattanville Road,
Purchase, NY 10577 and our telephone number is (914) 272-8067.
The
Private Placement
Our
sponsor has agreed to purchase an aggregate of 8,000,000 warrants from
us at a
price of $1.00 per warrant for an aggregate purchase price of $8,000,000
in a
private placement immediately prior to the completion of this
offering. The private placement warrants will be identical to the
warrants included in the units being offered by this prospectus, except
that our
sponsor or its permitted transferees will have the right to exercise those
private placement warrants on a cashless basis so long as such warrants
are held
by our sponsor, its members or former members, members of their immediate
families or their controlled affiliates, which we refer to as permitted
transferees. Exercising warrants on a “cashless basis” means that in
lieu of paying the aggregate exercise price for the shares of common stock
being
purchased upon exercise of the warrant in cash, the holder will forfeit
a number
of shares underlying the warrants with a market value equal to such aggregate
exercise price. Accordingly, we would not receive additional proceeds
to the extent these warrants are exercised on a cashless
basis. Warrants included in the units sold in this offering are not
exercisable on a cashless basis, and the exercise price with respect to
the
warrants will be paid in cash directly to us. The private placement
warrants will not be exercisable at any time unless a registration statement
covering the shares of common stock issuable upon exercise of the public
warrants is effective and a prospectus is available for use by the public
warrant holders. Our sponsor has agreed, and any permitted transferee
prior to any transfer will agree, that, with certain exceptions, the private
placement warrants will not be sold or transferred until after we have
consummated our initial business combination. Additionally, because
our executive officers are the sole members in NRDC Real Estate Advisors,
the
sole member of our sponsor, these executive officers have agreed not to
sell or
otherwise transfer their ownership interests in NRDC Real Estate Advisors
until
we have consummated our initial business
combination.
4
The
Offering
Securities
Offered:
30,000,000
units, at $10.00 per unit, each unit consisting of:
•
one share of common stock; and
•
one warrant.
The
units will begin trading on or promptly after the date of this
prospectus.
Trading
Commencement and
Separation
of Common Stock
and
Warrants:
The
common stock and warrants will begin trading separately five trading
days
after the earlier to occur of the termination of the underwriters’ option
to purchase up to 4,500,000 additional units to cover over-allotments
and
the exercise in full of that option. In no event will separate
trading of the common stock and warrants commence until we have
filed an
audited balance sheet reflecting our receipt of the proceeds of
this
offering and issued a press release announcing when separate trading
will
begin. We will file a Current Report on Form 8-K, including an
audited balance sheet, promptly after the completion of this
offering. The audited balance sheet will include proceeds we
receive from the exercise of the over-allotment option if the
over-allotment option is exercised prior to the filing of the Current
Report on Form 8-K and, if such over-allotment option is exercised
after
such time, we will file an additional Current Report on Form 8-K
including
a balance sheet reflecting our receipt of the proceeds from the
exercise
of the over-allotment. For more information, see the section in
this prospectus entitled “Description of
Securities—Units.”
Common
Stock:
Number
of shares outstanding
before
the date of this prospectus:
7,500,000
shares (does not include 1,125,000 shares sold to our sponsor that
are
subject to forfeiture to the extent the underwriters do not exercise
their
over-allotment option but gives effect to a 6 for 5 stock split
of our
common stock effected on September 4, 2007)
Number
of shares to be outstanding
after
completion of this offering:
37,500,000
shares (does not include 1,125,000 shares sold to our sponsor that
are
subject to forfeiture to the extent the underwriters do not exercise
their
over-allotment option but gives effect to a 6 for 5 stock split
of our
common stock effected on September 4, 2007)
Warrants:
Number
of warrants outstanding before
the
date of this prospectus:
0
warrants
5
Number
of warrants to be outstanding
after
completion of this offering and
the
private placement:
38,000,000
warrants
Exercisability:
Each
warrant is exercisable for one share of common stock.
Exercise
price:
$7.50
Exercise
period:
The
warrants will become exercisable on the later of the consummation
of our
initial business combination and _______, 2008 on the terms described
in
this prospectus; provided that a registration statement covering
the
shares of common stock issuable upon exercise of the warrants is
effective
and a current prospectus is available for use.
The
warrants will expire at 5:00 p.m., New York City time, on __________,
2011
or earlier upon redemption of the warrants by
us.
Redemption:
We
may redeem the outstanding warrants (excluding the warrants included
in
the co-investment units) at any time after the warrants become
exercisable:
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice; and
•
only if the last sales price of our common stock on the American
Stock
Exchange, or other national securities exchange on which our common
stock
may be traded, equals or exceeds $14.25 per share for any 20 trading
days
within a 30-trading-day period ending three business days before
we send
the notice of redemption, a registration statement under the Securities
Act relating to the shares of common stock issuable upon exercise
of the
warrants is effective and expected to remain effective to and including
the redemption date, and a prospectus relating to the shares of
common
stock issuable upon exercise of the warrants is available for use
by the
public warrant holders and remains available for use to and including
the
redemption date.
We
established the last criterion to provide warrant holders with
a premium
to the initial warrant exercise price, as well as a degree of liquidity
to
cushion the market reaction, if any, to our election to redeem
the
warrants. If the above conditions are satisfied and we call the
warrants for redemption, the warrant holders will then be entitled
to
exercise their warrants before the date scheduled for
redemption. However, there can be no assurance that the price
of the common stock will exceed $14.25 or the warrant exercise
price after
the redemption call is made. We do not need the consent
of
6
the
underwriters or our stockholders to redeem the outstanding
warrants.
Initial
shares:
In
July 2007, our sponsor purchased 8,625,000 shares of our common
stock
(after giving effect to a 6 for 5 stock split of our common stock
effected
on September 4, 2007) for an aggregate purchase price of
$25,000. The initial shares are identical to the shares
included in the units being sold in this offering, except
that:
•
the initial shares are subject to transfer
restrictions;
•
our existing stockholders have agreed to vote the initial shares
in the
same manner as a majority of the public stockholders in connection
with
the vote required to approve our initial business
combination;
•
our existing stockholders will not be able to exercise conversion
rights
(as described below) with respect to their initial shares;
and
•
our existing stockholders have agreed to waive their rights to
participate
in any liquidation distribution with respect to their initial shares
if we
fail to consummate a business combination.
Of
the 8,625,000 shares of common stock originally purchased by our
sponsor,
1,125,000 shares will be forfeited to us to the extent the underwriters
do
not exercise their over-allotment option. After giving effect
to such forfeiture and assuming no purchase of units by our existing
shareholders in this offering, the number of shares of common stock
owned
by our existing stockholders will be 20% of the total number of
shares of
common stock outstanding after completion of this
offering.
Private
placement:
Our
sponsor has agreed to purchase an aggregate of 8,000,000 warrants
from us
at a price of $1.00 per warrant, for an aggregate purchase price
of
$8,000,000, in a private placement immediately prior to the completion
of
this offering. With certain exceptions, the private placement
warrants may not be sold or transferred until after we have consummated
our initial business combination. The private placement
warrants will be identical to the warrants underlying the units
offered by
this prospectus except that the private placement warrants are
exercisable
on a cashless basis so long as they are held by our sponsor or
its
permitted transferees.
Our
sponsor and its permitted transferees will have the right to exercise
the
private placement warrants on a cashless basis, after delivery
of a notice
of redemption by us. Warrants included in the units issued in
this offering are not exercisable on a cashless basis.
Co-Investment
units purchased
through
private placement:
Our
sponsor has agreed to purchase from us an aggregate of 2,000,000
of our
units at a price of $10.00 per unit for an
aggregate
7
purchase
price of $20,000,000 in a private placement that will occur immediately
prior to the consummation of our initial business
combination. Our initial business combination will not occur
until after the signing of a definitive business combination agreement
and
the approval of that business combination by our stockholders,
provided
that holders of less than 30% of the shares of common stock sold
in this
offering both vote against our initial business combination and
exercise
their conversion rights as described in this prospectus, and a
majority of
the outstanding shares of our common stock are voted in favor of
an
amendment to our amended and restated certificate of incorporation
to
provide for our perpetual existence. Each unit will consist of
one share of common stock and one warrant. We refer to this
private placement as the co-investment and these private placement
units,
shares of common stock and warrants as the co-investment units,
co-investment common stock and co-investment warrants, respectively,
throughout this prospectus.
The
co-investment units will be identical to the units sold in this
offering
except that the common stock and the warrants included in the
co-investment units, and the common stock issuable upon exercise
of those
warrants, with certain limited exceptions, may not be transferred
or sold
for one year after the consummation of our initial business
combination. Additionally, the warrants included in the
co-investment units are (1) exercisable only after the date on
which the
last sales price of our common stock on the American Stock Exchange,
or
other national securities exchange on which our common stock
may be
traded, equals or exceeds $14.25 per share for any 20 trading
days within
any 30-trading-day period beginning at least 90 calendar days
after the
consummation of our initial business combination, (2) exercisable
on a
cashless basis so long as they are held by the original purchaser
or its
permitted transferees and (3) not subject to redemption by
us.
Upon
consummation of the co-investment, our sponsor would own approximately
24.1% of our outstanding common stock, assuming that no additional
shares
are otherwise issued as consideration for our initial business
combination
and that our sponsor does not purchase any additional shares
of our common
stock in this offering or in the secondary market. Pursuant to
the registration rights agreement, the holder of our co-investment
units
and the common stock and the warrants included therein will be
entitled to
certain registration rights one year after the consummation of
our initial
business combination, or such later time as when such securities
become
transferable or exercisable.
As
the proceeds from the sale of the co-investment units will not
be received
by us until immediately prior to our consummation of a business
combination, these proceeds will not be deposited into the trust
account
and will not be available for distribution to our public stockholders
in
the event of a liquidating distribution. Our sponsor will not
receive any additional carried interest (in the form
of
8
additional
units, common stock, warrants or otherwise) in connection with
the
co-investment.
Our
sponsor has agreed, subject to certain exceptions described below,
not to
transfer, assign or sell any of its co-investment units, the co-investment
common stock or co-investment warrants (including the common stock
to be
issued upon exercise of the co-investment warrants) until one year
after
we consummate a business combination.
The
business purpose of the co-investment is to provide additional
capital to
us and to demonstrate our sponsor’s further commitment to our completion
of a business combination. In the event that the co-investment
units are not purchased immediately prior to our consummation of
our
initial business combination, each person that has a co-investment
obligation has agreed to forfeit all of the shares and private
placement
warrants that such person purchased from us prior to the completion
of
this offering.
Proposed
American Stock Exchange symbols for our
securities:
Units:
NAQ.U
Common
Stock:
NAQ
Warrants:
NAQ.WS
Offering
proceeds to be held in
the
trust account:
$294,950,589
of the proceeds from this offering and the private placement
(approximately $9.83 per unit) will be deposited in a trust account
at
JPMorgan Chase Bank, N.A., maintained by Continental Stock Transfer
&
Trust Company, as trustee, pursuant to an agreement to be signed
prior to
the date of this prospectus. Of the proceeds held in the trust
account, $9,000,000, representing deferred underwriting discounts
and
commissions, will be paid to the underwriters upon consummation
of our
initial business combination (subject to a $0.30 per share reduction
for
public stockholders who vote against the initial business combination
and
exercise their conversion rights as described below). The
proceeds held in the trust account will not be released until
the earlier
of (x) the consummation of our initial business combination on
the terms
described in this prospectus or (y) our liquidation. There can
be released to us from the trust account (i) interest income
earned on the
trust account balance to pay any income taxes on such interest
and (ii)
interest income earned, after taxes payable, on the trust account
of up to
an aggregate amount of $2,250,000 to fund our working capital
requirements, including, in such an event, the costs of our
liquidation. See “Use of Proceeds.” All remaining
interest earned on the trust account (after taxes payable) will
remain in
the trust account for our use in consummating an initial business
combination and for payment of the deferred underwriting compensation
or
released to the public stockholders upon their exercise of conversion
rights or upon our liquidation. Unless
and
9
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 any expenses which we may incur related to
the
investigation and selection of a target business or the negotiation
of an
agreement to consummate an initial business combination, including
to make
a down payment or deposit or fund a lock-up or “no-shop” provision with
respect to a potential business combination. These expenses may
be paid prior to an initial business combination only from the
$250,000 of
net proceeds from this offering not held in the trust account
plus
interest earned on the trust account of up to $2,250,000, after
tax, as
set forth above.
Although
we do not know the exact rate of interest to be earned on the
trust
account, we believe that the recent historical interest rates
of U.S.
Treasury Bills with less than six months maturities are indicative
of the
interest to be earned on the funds in the trust
account. According to the Federal Reserve Statistical Release
dated September 4, 2007, referencing historical interest rate
data which
appears on the Federal Reserve website, U.S. Treasury Bills with
four
week, three month and six month maturities were yielding, as
of the week
ended August 31, 2007, 4.14%, 4.06% and 4.22% per annum,
respectively. However, the actual interest rates that we
receive on the funds in the trust account may be different than
these
rates.
None
of the warrants may be exercised until after the consummation of
our
initial business combination. Thus, after the proceeds of the
trust account have been disbursed, upon the exercise of any warrants,
the
warrant exercise price will be paid directly to us.
Payments
to executive officers and
directors
and existing stockholders:
There
will be no compensation, fees or other payments paid to our executive
officers, directors and existing stockholders or any of their respective
affiliates prior to, or for any services they render in order to
effectuate, the consummation of our initial business combination
other
than:
•
repayment of a $200,000 interest-free loan made by our sponsor
to cover
expenses relating to the offering contemplated by this
prospectus;
•
payment to our sponsor or its assignee of a monthly fee of $7,500
for
general and administrative services, including office space, utilities,
and secretarial support. We believe that, based on rents and
fees for similar services in Purchase, New York, the fees charged
by our
sponsor are at least as favorable as we could have obtained from
unaffiliated third parties; and
•
reimbursement of out-of-pocket expenses incurred by our executive
officers
and directors in connection with activities on our behalf, such
as
identifying and
10
investigating
target businesses for our initial business combination.
Right
of first offer:
We
have entered into a business opportunity right of first offer
agreement
with our sponsor, NRDC Real Estate Advisors, LLC and NRDC Equity
Partners
and with our executive officers and directors. This right of
first offer provides that from the date of this prospectus until
the
earlier of the consummation of our initial business combination
or our
liquidation, we will have a right of first offer if any of these
parties
becomes aware of, or involved with, a business combination opportunity
with any operating business. Subject to their respective
pre-existing fiduciary obligations, these parties to the right
of first
offer agreement will, and will cause companies or entities under
their
management or control, to first offer any such business opportunity
to us
and they will not, and will cause each other company or entity
under their
management or control not, to pursue any such business opportunity
unless
and until our board of directors, including a majority of our
disinterested independent directors, has determined that we will
not
pursue such opportunity.
We
recognize that each of our executive officers and directors may
be deemed
an affiliate of any company for which such executive officer
or director
serves as an officer or director or for which such executive
officer or
director otherwise has a pre-existing fiduciary duty and that
a conflict
of interest could arise if an opportunity is appropriate for
one of such
companies. As part of this right of first offer, we have
established procedures with respect to the sourcing of a potential
business combination by our executive officers and directors
to eliminate
such conflict for our executive officers and directors, whereby
a
potential business combination that must be presented to any company
for which such executive officer or director, as the case may
be, serves
as an officer or director or otherwise has a pre-existing fiduciary
duty
(other than our sponsor, NRDC Real Estate Advisors, LLC and NRDC
Equity
Partners) will not be presented to us until after such executive
officer
or director has presented the opportunity to such company and
such company
has determined not to
proceed.
The
stockholders must approve
our
initial business combination:
We
will seek stockholder approval before we consummate our initial
business
combination, even if the nature of the acquisition would not ordinarily
require stockholder approval under applicable state law. In
connection with any vote required for our initial business combination,
our executive officers, directors and existing stockholders have
agreed to
vote all of the shares of common stock owned by them prior to the
completion of this offering with respect to our initial business
combination in the same manner that the majority of the shares
of common
stock offered hereby are voted by our public stockholders other
than our
existing stockholders. Our executive officers, directors and
existing stockholders also have agreed that if they acquire shares
of
common stock in or following completion of this offering, they
will vote
all such acquired shares
11
in
favor of our initial business combination. We will proceed with
our proposed initial business combination only if:
•
a
majority of the shares of common stock voted by the public stockholders
are voted in favor of the initial business combination;
•
public stockholders owning less than 30% of the shares sold in
this
offering both vote against our initial business combination and
exercise
their conversion rights as described below; and
•
a
majority of our outstanding shares of common stock are voted in
favor of
an amendment to our amended and restated certificate of incorporation
to
provide for our perpetual existence, as described
below.
Voting
against the initial business combination alone will not result
in an
election to exercise a stockholder’s conversion rights. A
stockholder must also affirmatively exercise such conversion rights
at or
prior to the time an initial business combination is voted upon
by the
stockholders. We view the procedures governing the approval of
our initial business combination, each of which are set forth in
our
amended and restated certificate of incorporation, as obligations
to our
stockholders, and neither we nor our board of directors will propose,
or
seek stockholder approval of, any amendment of these
procedures. For more information, see the section entitled
“Proposed Business—Consummating an Initial Business
Combination—Stockholder Approval of Our Initial Business
Combination.”
Conversion
rights for stockholders
voting
to reject our initial business
combination:
Public
stockholders voting against our initial business combination will
be
entitled to convert their stock into a pro rata share of the
aggregate amount then in the trust account (including the amount
held in
the trust account representing the deferred portion of the underwriting
discounts and commissions), including any interest earned on their
pro
rata share (net of taxes payable on such interest income and after
release of an aggregate amount up to $2,250,000 of interest income,
after
tax, to fund working capital requirements), if the initial business
combination is approved and consummated. Public stockholders
who convert their stock into a pro rata share of the trust
account will continue to have the right to exercise any warrants
they may
hold. Our existing stockholders will not have any conversion
rights with respect to shares of common stock held by them prior
to the
completion of this offering or with respect to any of the shares
sold in
this offering that they may acquire and there will be no conversion
rights
with respect to the 2,000,000 shares of common stock included in
the
co-investment units.
This
conversion could have the effect of reducing the amount distributed
to us
from the trust account by up to
approximately
12
$85,785,167
(assuming conversion of the maximum of up to 8,999,999 of the eligible
shares of common stock) (or up to approximately $98,340,167 assuming
the
over-allotment option is exercised in full). We intend to structure
and
consummate any potential business combination in a manner such that
our
public stockholders holding up to 8,999,999 of our shares voting
against
our initial business combination could convert their shares of common
stock for a pro rata share of the aggregate amount then on deposit
in the
trust account, and the business combination could still go
forward.
An
eligible stockholder may request conversion at any time after the
mailing
to our stockholders of the proxy statement and prior to the vote
taken
with respect to a proposed business combination at a meeting held
for that
purpose, but the request will not be granted unless the stockholder
votes
against the initial business combination and the initial business
combination is approved and consummated. In addition, no later
than the business day immediately preceding the vote on the business
combination, the stockholder must present written instructions to
our
transfer agent stating that the stockholder wishes to convert its
shares
into a pro rata share of the trust account and confirming that the
stockholder has held the shares since the record date and will continue
to
hold them through the stockholder meeting and the closing of our
initial
business combination. We may also require public stockholders
to tender their certificates to our transfer agent or to deliver
their
shares to the transfer agent electronically using The Depository
Trust
Company’s DWAC (Deposit/Withdrawal At Custodian) System no later than the
business day immediately preceding the vote on the business
combination. There is a nominal cost associated with the
above-referenced tendering process and the act of certificating the
shares
or delivering them through the DWAC system. The transfer agent will
typically charge the tendering broker approximately $35 and it would
be up
to the broker whether or not to pass this cost on to the converting
holder.
The
proxy solicitation materials that we will furnish to stockholders
in
connection with the vote for any proposed business combination will
indicate whether we are requiring stockholders to satisfy such
certification and delivery requirements. Accordingly, a
stockholder would have from the time we send out our proxy statement
up
until the business day immediately preceding the vote on the business
combination to deliver his shares if he wishes to seek to exercise
his
conversion rights. This time period varies depending on the
specific facts of each transaction. However, as the delivery
process is within the stockholder’s control and, whether or not he is a
record holder or his shares are held in “street name,” can be accomplished
by the stockholder in a matter of hours simply by contacting the
transfer
agent or his broker and requesting delivery of his shares through
the DWAC
System, we believe this time period is sufficient for investors
generally. However, because we do not have any control over the
process, it may take significantly longer than we anticipated and
investors may not be able to seek conversion in
13
time. Accordingly,
we will only require stockholders to deliver their certificates prior
to
the vote if, in accordance with the America Stock Exchange’s proxy
notification recommendations, the stockholders receive the proxy
solicitation materials at least twenty days prior to the
meeting.
Any
request for conversion, once made, may be withdrawn at any time prior
to
the vote taken with respect to a proposed business combination at
the
meeting held for that purpose. Furthermore, if a stockholder delivers
his
certificate for conversion and subsequently withdraws his request
for
conversion, he may simply request that the transfer agent return
the
certificate (physically or electronically).
The
initial per share conversion price is approximately $9.83 per share,
without taking into account interest earned on the trust account
that
remains in the trust account at such time. Because this amount is
less
than the $10.00 per unit price in this offering and may be lower
than the
market price of the common stock on the date of conversion, there
may be a
disincentive on the part of public stockholders to exercise their
conversion rights. Because stockholders who exercise their conversion
rights will receive their proportionate share of deferred portion
of the
underwriting discounts and commissions and the underwriters will
be paid
the full amount of the deferred portion of the underwriting discounts
and
commissions at the time of closing of our initial business combination,
the non-converting stockholders will bear the financial effect of
such
payments to both the converting stockholders and the
underwriters.
Amended
and Restated
Certificate
of Incorporation:
As
discussed below, there are specific provisions in our amended and
restated
certificate of incorporation that may not be amended prior to the
consummation of our initial business combination, including our
requirements to seek stockholder approval of such a business combination
and to allow our stockholders to seek conversion of their shares
if they
do not approve of such a business combination. While we have
been advised that such provisions limiting our ability to amend our
amended and restated certificate of incorporation may not be enforceable
under applicable Delaware law, we view these provisions, which are
contained in Article Sixth of our amended and restated certificate
of
incorporation, as obligations to our stockholders and our officers
and
directors have agreed that they will not recommend or take any action
to
amend or waive these provisions.
Our
amended and restated certificate of incorporation also provides that
we
will continue in existence only until ___________, 2009. If we
have not completed a business combination by such date, our corporate
existence will automatically cease except for the purposes of winding
up
our affairs and liquidating, pursuant to Section 278 of the Delaware
General Corporation Law. This has the same effect as if our
board of directors and stockholders had formally voted to approve
our
dissolution pursuant to Section 275 of the Delaware General Corporation
Law. Accordingly, limiting our corporate existence to a
specified date as permitted by Section 102(b)(5) of the Delaware
14
General
Corporation Law removes the necessity to comply with the formal
procedures
set forth in Section 275 (which would have required our board
of directors
and stockholders to formally vote to approve our liquidation
and to have
filed a certificate of dissolution with the Delaware Secretary
of State). In connection with any proposed initial business
combination, we will submit to stockholders a proposal to amend
our
amended and restated certificate of incorporation to provide
for our
perpetual existence, thereby removing the 24-month limitation
on our
corporate life. We will only consummate a business combination
if stockholders vote both in favor of such business combination
and our
amendment to provide for our perpetual existence. The approval
of the proposal to amend our amended and restated certificate
of
incorporation to provide for our perpetual existence would require
the
affirmative vote of a majority of our outstanding shares of common
stock. Our executive officers, directors and existing
stockholders have agreed to vote all of the shares of stock owned
by them
in favor of this amendment. We view this provision terminating
our corporate life by __________, 2009 as an obligation to our
stockholders and our officers and directors have agreed that
they will not
take any action to amend or waive this provision to allow us
to survive
for a longer period of time except upon the consummation of our
initial
business
combination.
Liquidation
if no
business
combination:
If
we are unable to complete a business combination prior to the date
24
months after completion of this offering, our corporate existence
will
cease except for the purposes of winding up our affairs and liquidating
pursuant to Section 278 of the Delaware General Corporation Law, in
which case we will as promptly as practicable thereafter adopt a
plan of
distribution in accordance with Section 281(b) of the Delaware
General Corporation Law. Section 278 provides that our existence will
continue for at least three years after its expiration for the purpose
of
prosecuting and defending suits, whether civil, criminal or
administrative, by or against us, and of enabling us gradually to
settle
and close our business, to dispose of and convey our property, to
discharge our liabilities and to distribute to our stockholders any
remaining assets, but not for the purpose of continuing the business
for
which we were organized. Our existence will continue automatically
even
beyond the three-year period for the purpose of completing the prosecution
or defense of suits begun prior to the expiration of the three-year
period, until such time as any judgments, orders or decrees resulting
from
such suits are fully executed. Section 281(b) will require us to pay
or make reasonable provision for all then-existing claims and obligations,
including all contingent, conditional, or unmatured contractual claims
known to us, and to make such provision as will be reasonably likely
to be
sufficient to provide compensation for any then-pending claims and
for
claims that have not been made known to us or that have not arisen
but
15
that,
based on facts known to us at the time, are likely to arise or to
become
known to us within 10 years after the date of dissolution. Under
Section 281(b), the plan of distribution must provide for all of such
claims to be paid in full or make provision for payments to be made
in
full, as applicable, if there are sufficient assets. If there are
insufficient assets to provide for all such claims, the plan must
provide
that such claims and obligations be paid or provided for according
to
their priority and, among claims of equal priority, ratably to the
extent
of legally available assets. These claims must be paid or provided
for
before we make any distribution of our remaining assets to our
stockholders. While we intend to pay such claims, if any, from the
$250,000 of proceeds held outside of the trust account and from the
$2,250,000 of interest income, after taxes, earned on amounts in
the trust
account available to us, we cannot assure you those funds will be
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.
We
have not engaged any such third parties or asked for or obtained
any such
waiver agreements at this time. There is 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. In addition,
there
is no guarantee that such entities will agree to waive any claims
they may
have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with us and will not seek recourse against
the
trust account for any reason. Our sponsor and each of our executive
officers has agreed that they will be personally liable on a joint
and
several basis to ensure that the proceeds in the trust account are
not
reduced by the claims of target businesses or claims of vendors or
other
entities that are owed money by us for services rendered or contracted
for
or products sold to us.
We
estimate that, in the event we liquidate the trust account, a public
stockholder will receive approximately $9.83 per share, without taking
into account interest earned on the trust account that remains in
the
trust account at such time (net of taxes payable on such interest
income
and after release of up to $2,250,000 of interest income, after tax,
to
fund our working capital requirements, including the costs of our
liquidation).
We
expect that all costs associated with implementing our plan of liquidation
as well as payments to any creditors will be funded out of the $250,000
of
proceeds of this offering not held in the trust account and the up
to
$2,250,000 of interest income, after taxes, on amounts in the trust
account that may be released to us. We estimate that our total
costs and expenses for implementing and completing our liquidation
will be
in the range of $15,000 to $25,000. This amount includes all
costs and expenses relating to our winding up. We believe that
there should be sufficient funds
16
available
from the proceeds not held in the trust account, plus interest earned
on
the trust account available to us as working capital, to fund these
expenses, although we cannot give you assurances that these will be
sufficient funds for such purposes. If these funds are
insufficient to cover the costs of our liquidation, our sponsor and
our
executive officers have each agreed, on a joint and several basis,
to
indemnify us for our direct, out-of-pocket costs associated with such
liquidation and winding-up, including litigation that would result
from
claimants disputing the validity of waivers that they have delivered,
pertaining to such liquidation.
For
more information regarding the liquidation and winding-up procedures
and
the factors that may impair our ability to distribute our assets, or
cause
distributions to be less than $9.83 per share, please see the sections
entitled “Risk Factors—Risks Relating to the Company and the Offering—If
third parties bring claims against us, the proceeds held in the trust
account could be reduced and the per share liquidation price received
by
our public stockholders would be less than approximately $9.83 per
share,”
“—Risks Relating to the Company and the Offering—Our stockholders may be
held liable for claims by third parties against us to the extent of
distributions received by them in our liquidation,” and “Proposed
Business—Consummating an Initial Business Combination—Liquidation if No
Business Combination.”
Audit
Committee:
We
have established and will maintain an Audit Committee which initially
will
be composed of a majority of independent directors and will be within
one
year composed entirely of independent directors to, among other things,
monitor compliance with the terms described above and the other terms
relating to this offering and review and approve any affiliated
transactions involving our company. If any noncompliance is
identified, then the Audit Committee will be charged with responsibility
to immediately take all action necessary to rectify such noncompliance
or
otherwise to cause compliance with the terms of this
offering. For more information, see the section entitled
“Management—Committees of the Board of Directors—Audit
Committee.”
Risks
In
making
your decision whether to invest in our securities you should take into account
not only the business experience of our executive officers and directors,
but
also the special risks we face as a blank check
company. Additionally, this offering is not being conducted in
compliance with Rule 419 promulgated under the Securities Act and, therefore,
you will not be entitled to the protections normally afforded to investors
in
Rule 419 blank check offerings. Further, our existing stockholders’
initial equity investment is less than that which is required by the North
American Securities Administrators Association, Inc., and we do not satisfy
such
association’s Statement of Policy Regarding Unsound Financial
Condition. You should carefully consider these and the other risks
set forth in the section entitled “Risk Factors” beginning on page 20 of
this prospectus.
17
Summary
Financial Data
The
following table summarizes the relevant financial data for our business
and
should be read in conjunction with our financial statements, and the notes
and
schedules related thereto, which are included in this prospectus. To
date, our efforts have been limited to organizational activities and activities
related to this offering, so only balance sheet data is presented
below. The historical financial information gives retroactive effect
to a 6 for 5 stock split of our common stock.
As
of July 13, 2007
Actual
As
Adjusted
Balance
Sheet Data:
Working
capital
$
5,232
$
286,224,858
Total
assets
244,037
295,224,858
Total
liabilities
219,768
9,000,000
(1)
Value
of common stock that may be converted to cash (2)
-
85,785,167
Total
stockholders’ equity
$
24,269
$
200,439,691
(1)
Represents deferred
underwriting discounts and commissions being held in the trust
account
($10,350,000 if the underwriters’ over-allotment option is exercised in
full) which is payable to the underwriters upon completion of a
business
combination less $0.30 per share that the underwriters have agreed
to
forego with respect to shares public stockholders have elected
to convert
into cash pursuant to their conversion
rights.
(2)
If
the initial business combination is approved and consummated, public
stockholders who voted against the combination will be entitled to
convert
their stock for cash of approximately $9.83 per share (or up to
$88,485,167 in the aggregate), which amount represents approximately
$9.53
per share (or $85,785,167 in the aggregate) representing the net
proceeds
of the offering and $0.30 per share (or $2,700,000 in the aggregate)
representing deferred underwriting discounts and commissions which
the
underwriters have agreed to deposit into the trust account and to
forego
to pay converting stockholders, and does not take into account interest
earned on and retained in the trust
account.
The
“as
adjusted” information gives effect to the sale of the units we are offering
pursuant to this prospectus and the sale of the private placement warrants,
including the application of the estimated net proceeds.
The
working capital (as adjusted) and total assets (as adjusted) amounts include
the
$285,950,589 that will be held in the trust account following the completion
of
this offering and will be available to us only upon the consummation of a
business combination within 24 months after the completion of this offering
but
the working capital (as adjusted) excludes the deferred underwriting discounts
and commissions of $9,000,000 ($10,350,000 if the underwriters’ over-allotment
option is exercised in full) that will be held in the trust account and payable
to the underwriters upon the consummation of an initial business combination,
less $0.30 per share that the underwriters have agreed to forego with respect
to
shares public stockholders have elected to convert into cash pursuant to
their
conversion rights. If an initial business combination is not
consummated within 24 months after the completion of this offering, we will
be
required to liquidate and the proceeds held in the trust account will be
distributed solely to our public stockholders after satisfaction of all our
then-outstanding liabilities.
We
will
not proceed with an initial business combination that has been approved by
a
majority of shares of common stock voted by our public stockholders if (i)
public stockholders owning 30% or more of the shares sold in this offering
both
vote against the business combination and exercise their conversion rights
or
(ii) the amendment to our amended and restated certificate of incorporation
providing for our perpetual existence is not approved by the affirmative vote
of
a majority of our outstanding shares of common stock. We will not
propose to our stockholders any transaction that is conditioned on holders
of
less than 30% of the shares held by the public stockholders exercising their
conversion rights. Accordingly, we may consummate an initial business
combination only if (i) a majority of the shares of common stock voted by the
public
18
stockholders
are voted in favor of the initial business combination, (ii) public stockholders
owning less than 30% of the shares sold in this offering both vote against
the
initial business combination and exercise their conversion rights and (iii)
a
majority of the outstanding shares of our common stock are voted in favor of
the
amendment to our amended and restated certificate of incorporation to provide
for our perpetual existence. If this occurred, we would be required
to convert to cash up to 8,999,999 of the 30,000,000 shares of common stock
included in the units sold in this offering at an initial per share conversion
price of approximately $9.83, without taking into account interest earned on
the
trust account remaining in the trust account at such time. The actual
per share conversion price will be equal to the amount in the trust account,
including all accrued interest income (net of taxes payable on such interest
income and after release of up to $2,250,000 of interest income, after tax,
to
fund working capital requirements), as of two business days prior to the
consummation of the initial business combination, divided by the number of
shares of common stock sold in this offering.
In
connection with any vote required for our initial business combination, our
existing stockholders, including our executive officers and directors, have
agreed to vote all of the shares of common stock held by them prior to the
completion of this offering either for or against a business combination in
the
same manner that the majority of the shares of common stock are voted by our
public stockholders. Our existing stockholders will not have
conversion rights with respect to those shares. Our existing
stockholders, including our executive officers and directors, also have agreed
that if they acquire shares of common stock in or following the completion
of
this offering, they will vote all such acquired shares in favor of our initial
business combination and that they will vote all shares owned by them in favor
of amending our amended and restated certificate of incorporation to provide
for
our perpetual existence, thereby removing the 24-month limitation on our
corporate life. By virtue of this agreement, our existing
stockholders, including our executive officers and directors, will not have
any
conversion rights in respect of those shares acquired in or following the
completion of this offering.
19
RISK
FACTORS
An
investment in our securities involves a high degree of risk. You
should consider carefully all of the risks described below, together with the
other information contained in this prospectus, before making a decision to
invest in our securities. If any of the following risks occur, our
business, financial condition and results of operations may be adversely
affected. In that event, the trading price of our securities could
decline, and you could lose all or a part of your investment.
Risks
Relating to the Company and the Offering
We
are a development stage company with no operating history and, accordingly,
you
will have no basis upon which to evaluate our ability to achieve our business
objective.
We
are a
recently incorporated development stage company with no operating results to
date. Therefore, our ability to begin operations is dependent upon
obtaining financing through the public offering of our
securities. Because we do not have an operating history, you will
have no basis upon which to evaluate our ability to achieve our business
objective, which is to consummate an initial business combination with one
or
more operating businesses. We do not have any specific business
combination under consideration, and we have neither identified, nor been
provided with the identity of, any prospective target
businesses. Neither we, nor any representative acting on our behalf,
have had any contacts or discussions with any prospective target business
regarding an initial business combination or taken any direct or indirect
measures to locate a specific target business or consummate an initial business
combination. As a result, you have a limited basis to evaluate
whether we will be able to identify an attractive target business. We
will not generate any revenues (other than interest income on the proceeds
from
this offering and the private placement) until, if at all, after the
consummation of an initial business combination. We cannot assure you
as to when, or if, our initial business combination will occur.
We
may not be able to consummate an initial business combination within the
required time frame, in which case we will be required to liquidate our
assets.
We
must
consummate a business combination with one or more operating businesses with
a
collective fair market value at least equal to 80% of the balance in the trust
account (less the deferred underwriting discounts and commissions of $9,000,000,
or $10,350,000 if the underwriters’ over-allotment option is exercised in full,
and taxes payable) at the time of the acquisition within 24 months after the
completion of this offering. If we fail to consummate an initial
business combination within the required time frame, in accordance with our
amended and restated certificate of incorporation our corporate existence will
terminate, except for purposes of liquidation and winding-up. Because
we do not have any specific business combination under consideration and we
have
neither identified nor been provided with the identity of any specific target
business or taken any measures to locate a specific target business or
consummate an initial business combination, we may not be able to find suitable
target businesses within the required time frame. In addition, our
negotiating position and our ability to conduct adequate due diligence on any
potential target may be reduced as we approach the deadline for the consummation
of an initial business combination.
If
we are required to liquidate without consummating an initial business
combination, our public stockholders will receive less than $10.00 per share
upon distribution of the funds held in the trust account and our warrants will
expire with no value.
If
we are
unable to consummate an initial business combination within 24 months from
the
date of this prospectus and are required to liquidate our assets, the per-share
liquidation amount may be less than $10.00 because of the expenses related
to
this offering, our general and administrative expenses, and the anticipated
costs associated with seeking an initial business
combination. Furthermore, there will be no distribution with respect
to our outstanding warrants, which will expire with no value if we liquidate
before the consummation of our initial business combination.
20
If
we are unable to consummate our initial business combination, our public
stockholders will likely be forced to wait the full 24 months before receiving
liquidation distributions.
We
have
24 months after the completion of this offering in which to complete a business
combination. We have no obligation to return funds to investors prior
to such date unless we consummate our initial business combination prior thereto
and only then to those investors that have both voted against the business
combination and requested conversion of their shares at or prior to the
stockholder vote. Only after the expiration of this full time
period will public stockholders be entitled to liquidation distributions if
we
are unable to complete a business combination. Accordingly,
investors’ funds may be unavailable to them until such date.
You
will not be entitled to protections normally afforded to investors of blank
check companies.
Because
the net proceeds of this offering are intended to be used to complete a business
combination with a target business that has not been identified, we may be
deemed to be a “blank check” company under United States securities
laws. However, because we expect that our securities will be listed
on the American Stock Exchange, a national securities exchange, and we will
have
net tangible assets in excess of $5,000,000 upon the successful consummation
of
this offering and will file a Current Report on Form 8-K with the SEC promptly
following completion of this offering including an audited balance sheet
demonstrating this fact, we are exempt from rules promulgated by the U.S.
Securities and Exchange Commission, which we refer to as the SEC, to protect
investors in blank check companies, such as Rule 419 under the Securities
Act. Accordingly, investors will not be afforded the benefits or
protections of those rules. Because we are not subject to those
rules, including Rule 419, our units will be immediately tradable and we have
a
longer period of time to complete a business combination than we would if we
were subject to those rules. For a more detailed comparison of our
offering to offerings under Rule 419, see the section entitled “Proposed
Business – Comparison of This Offering to Those of Blank Check Companies Subject
to Rule 419.”
Under
Delaware law, the requirements and restrictions relating to this offering
contained in our amended and restated certificate of incorporation may be
amended, which could reduce or eliminate the protection afforded to our
stockholders by such requirements and restrictions.
Our
amended and restated certificate of incorporation contains certain requirements
and restrictions relating to this offering that will apply to us until the
consummation of an initial business combination. Specifically, our
amended and restated certificate of incorporation provides, among other things,
that:
•
upon
completion of this offering, a total of $294,950,589 (or $338,150,589,
if
the underwriters’ over-allotment option is exercised in full) from the
proceeds from the offering, deferred underwriting discounts and
commissions and the proceeds of the private placement, will be deposited
into the trust account, which proceeds may not be disbursed from
the trust
account until the earlier of (i) an initial business combination
or (ii)
our liquidation;
•
prior
to consummating our initial business combination, we must submit
such
business combination to our stockholders for
approval;
•
we
may consummate our initial business combination if (i) stockholders
owning
a majority of the shares of our common stock approve the business
combination; (ii) public stockholders owning less than 30% of the
shares
sold in this offering both vote against the business combination
and
exercise their conversion rights and (iii) our stockholders approve
an
amendment of our amended and restated certificate of incorporation
to
provide for our perpetual
existence;
•
if
our initial business combination is approved and consummated, public
stockholders who voted against the initial business combination and
who
exercised their conversion rights will receive their pro rata share
of
amounts in the trust account;
21
•
if
an initial business combination is not consummated within the 24
months
after the completion of this offering, then our corporate purposes
and
powers will immediately thereupon be limited to winding up our affairs,
including liquidation of our assets, which will include funds in
the trust
account, and we will not be able to engage in any other business
activities; and
•
we
may not consummate any other merger, acquisition, capital stock exchange,
stock purchase, asset purchase or other similar transaction other
than a
business combination that meets the conditions specified in this
prospectus, including the requirement that our initial business
combination be with one or more operating businesses whose fair market
value, collectively, is at least equal to 80% of the balance in the
trust
account (less the deferred underwriting discounts and commissions
and
taxes payable) at the time of such business
combination.
Our
amended and restated certificate of incorporation requires that we obtain the
unanimous consent of our stockholders to amend certain of the above
provisions. However, the validity of unanimous consent provisions
under Delaware law has not been settled. A court could conclude that
the unanimous consent requirement constitutes a practical prohibition on
amendment in violation of the stockholders’ implicit rights to amend the
corporate charter. In that case, some or all of the above provisions
could be amended without unanimous consent and any such amendment could reduce
or eliminate the protection afforded to our stockholders. However, we
view the foregoing provisions as obligations to our stockholders and our
officers and directors have agreed that they will not recommend or take any
action to waive or amend any of these provisions that would take effect prior
to
the consummation of our initial business combination.
Because
of our limited resources and the significant competition for business
combination opportunities, we may not be able to consummate an attractive
business combination.
Identifying,
executing and realizing attractive returns on business combinations is highly
competitive and involves a high degree of uncertainty. We expect to
encounter intense competition for potential target businesses from other
entities having a business objective similar to ours, including venture capital
funds, leveraged buyout funds, operating businesses, and other entities and
individuals, both foreign and domestic. Many of these competitors are
well established and have extensive experience in identifying and consummating
business combinations directly or through affiliates. Many of these
competitors possess greater technical, human and other resources than we do,
and
our financial resources will be relatively limited when contrasted with those
of
many of these competitors. Furthermore, over the past several years,
other “blank check” companies have been formed, and a number of such companies
have grown in size. Additional investment funds and blank check
companies with similar investment objectives as ours may be formed in the future
by other unrelated parties and these funds and companies may have substantially
more capital and may have access to and utilize additional financing on more
attractive terms. While we believe that there are numerous potential
target businesses with which we could combine using the net proceeds of this
offering, the private placement and the co-investment, together with additional
financing, if available, our ability to compete in combining with certain
sizeable target businesses will be limited by our available financial
resources. This inherent competitive limitation gives others an
advantage in pursuing a business combination with certain target
businesses. In addition:
•
the
requirement that we obtain stockholder approval of a business combination
may delay or prevent the consummation of an initial business combination
within the 24-month time period;
•
the
requirement that we prepare a proxy statement and notice of special
meeting of stockholders in accordance with the requirements of Delaware
law and the federal securities laws, which proxy statement will be
required to be submitted to and reviewed by the Securities and Exchange
Commission, in connection with such business combination may delay
or
prevent the completion of a
transaction;
22
•
the
requirement that we prepare audited and perhaps interim-unaudited
financial information to be included in the proxy statement to be
sent to
stockholders in connection with such business combination may delay
or
prevent the consummation of a
transaction;
•
the
conversion of common stock held by our public stockholders into cash
may
reduce the resources available to us to fund our initial business
combination;
•
the
existence of our outstanding warrants, and the dilution they potentially
represent, may not be viewed favorably by certain target businesses;
and
•
the
requirement to acquire assets or an operating business that have
a fair
market value at least equal to 80% of the balance in the trust account
(less the deferred underwriting discounts and commissions and taxes
payable) at the time of the initial business combination (i) could
require
us to acquire several assets or closely related operating businesses
at
the same time, all of which sales would be contingent on the closings
of
the other sales, which could make it more difficult to consummate
our
initial business combination and (ii) together with our ability to
proceed
with a business combination if public stockholders owning less than
30% of
the shares sold in this offering vote against our business combination
and
exercise their conversion rights, may require us to raise additional
funds
through the private sale of securities or incur indebtedness in order
to
enable us to effect such a business
combination.
Any
of
these factors may place us at a competitive disadvantage in consummating an
initial business combination on favorable terms or at all.
To
the
extent that our initial business combination entails the contemporaneous
combination with more than one operating business, we may not have sufficient
resources, financial or otherwise, to effectively and efficiently conduct
adequate due diligence and negotiate definitive agreements on terms most
favorable to our stockholders. In addition, because our initial
business combination may be with different sellers, we will need to convince
such sellers to agree that the purchase of their businesses is contingent upon
the simultaneous closings of the other acquisitions.
Because
there are numerous “blank check” companies similar to ours seeking to consummate
an initial business combination, it may be more difficult for us to consummate
an initial business combination.
Based
upon publicly available information, as of August 31, 2007, approximately
115 similarly structured “blank check” companies have completed initial public
offerings in the United States since the start of 2004 and 45 others have
filed registration statements. Of the “blank check” companies that
have completed initial public offerings, 30 companies have consummated a
business combination, while 24 other companies have announced that they
have entered into definitive agreements or letters of intent with respect
to
potential business combinations but have not yet consummated such business
combinations. Five companies have failed to complete previously
announced business combinations and have announced their pending dissolution
and
return of trust proceeds to stockholders. Accordingly, the
remaining 56 “blank check” companies that we estimate to have raised
approximately $5.7 billion that is currently held in trust accounts, and
potentially an additional 45 “blank check” companies that have filed
registration statements to raise approximately $6.9 billion, will be seeking
to
enter into business combinations. As a result, we may be subject to
competition from these and other companies seeking to consummate a business
combination which, in turn, will result in an increased demand for target
businesses. Further, the fact that 30 “blank check” companies
have consummated a business combination, 24 other companies have entered
into definitive agreements or letters of intent with respect to potential
business combinations, and five companies have failed to complete a business
combination, may be an indication that there are a limited number of attractive
target businesses available or that many target businesses may not be inclined
to enter into a business combination with a publicly held “blank check”
company. Because of this competition, we cannot assure you that we
will be able to consummate an initial business combination within the required
time periods. If we are unable to find a
23
suitable
target operating business within the required time period, the terms of our
amended and restated certificate of incorporation will require us to
liquidate.
We
may have insufficient resources to cover our operating expenses and the expenses
of consummating an initial business combination.
We
believe that the $250,000 available to us outside of the trust account upon
consummation of this offering and interest earned of up to $2,250,000, after
tax, on the balance of the trust account that we expect to be available to
us
will be sufficient to cover our working capital requirements for the next 24
months, including expenses incurred in connection with an initial business
combination, based upon our executive officers’ estimate of the amount required
for these purposes. This estimate may prove inaccurate, especially if
a portion of the available proceeds is used to make a down payment or pay
exclusivity or similar fees in connection with an initial business combination
or if we expend a significant portion of the available proceeds in pursuit
of a
business combination that is not consummated. If we do not have
sufficient proceeds available to cover our expenses, we may be required to
obtain additional financing from our executive officers, our directors, our
existing stockholders or third parties. Such additional financing may
include loans from third parties to cover the costs associated with the search
for and consummation of an initial business combination, although we currently
have no intention of obtaining third party loans. We would seek to
have any third party lenders waive any claim to any monies held in the trust
account for the benefit of the public stockholders. Our sponsor and
each of our executive officers have agreed to be jointly and severally liable
to
reimburse the trust account for any claims made by such lenders to the extent
that the payment of any debts or obligations owed to such lenders actually
reduces the amount in the trust account. We may not be able to obtain
additional financing. None of our executive officers, directors or
existing stockholders are obligated to provide any additional
financing. If we do not have sufficient proceeds and are unable to
obtain additional financing, we may be required to liquidate prior to
consummating an initial business combination.
The
ability of our stockholders to exercise their conversion rights may not allow
us
to effectuate the most desirable business combination or optimize our capital
structure.
When
we
seek stockholder approval of our initial business combination, we will offer
each public stockholder (but not our existing stockholders) the right to have
his, her or its shares of common stock converted to cash if the stockholder
votes against the initial business combination and the initial business
combination is approved and completed. Such holder must both vote against such
business combination and exercise his, her or its conversion rights to receive
a
pro rata portion of the trust account. Accordingly, if our business combination
requires us to use substantially all of our cash to pay the purchase price,
because we will not know how many stockholders may exercise such conversion
rights, we may either need to reserve part of the trust account for possible
payment upon such conversion, or we may need to arrange third party financing
to
help fund our business combination in case a larger percentage of stockholders
exercise their conversion rights than we expect. Since we have no specific
business combination under consideration, we have not taken any steps to secure
third party financing. Therefore, we may not be able to consummate an initial
business combination that requires us to use all of the funds held in the trust
account as part of the purchase price, or we may end up having a leverage ratio
that is not optimal for our business combination. This may limit our ability
to
effectuate the most attractive business combination available to
us.
A
decline in interest rates could limit the amount available to fund our search
for a target business or businesses and complete a business combination since
we
will depend on interest earned on the trust account to pay our tax obligations,
to fund our search and to consummate our initial business
combination.
Of
the
net proceeds of this offering, only $250,000 will be available to us initially
outside the trust account to fund our working capital
requirements. We will depend on sufficient interest being earned on
the proceeds held in the trust account to provide us with additional working
capital in order to identify one or more target businesses and to complete
our
initial business combination, as well as to pay any tax obligations that
we may
owe. Although we do not know the exact rate of interest to be earned
on the trust account, we believe
24
that
the
recent historical interest rates of U.S. Treasury Bills with less than six
month
maturities are indicative of the interest to be earned on the funds in the
trust
account. According to the Federal Reserve Statistical Release dated
September 4, 2007, referencing historical interest rate data which appears
on
the Federal Reserve website, U.S. Treasury Bills with four week, three month
and
six month maturities were yielding, as of the week ended August 31, 2007,
4.14%,
4.06% and 4.22% per annum, respectively. While we cannot assure you
the balance of the trust account will be invested to yield these rates, we
believe such rates are representative of those we may receive on the balance
of
the trust account.
While
we
are entitled to have released to us for such purposes certain interest earned
on
the funds in the trust account, a substantial decline in interest rates may
result in our having insufficient funds available with which to structure,
negotiate and close an initial business combination. In such event,
we may need to borrow funds from our existing stockholders to operate or may
be
forced to liquidate. Our existing stockholders are under no
obligation to advance funds in such circumstances.
Our
determination of the offering price of our units and of the aggregate amount
of
proceeds we are raising in this offering was more arbitrary than typically
would
be the case if we were an operating company rather than an acquisition
vehicle.
Prior
to
this offering, we had no operating history and there was no public market for
any of our securities. The public offering price of the units, the
terms of the warrants, the aggregate proceeds we are raising and the amount
to
be placed in a trust account were the products of negotiations between the
underwriters and us. The factors that were considered in making these
determinations included:
•
the
history and prospects of companies whose principal business is the
acquisition of other businesses;
•
prior
offerings of those companies;
•
our
prospects for acquiring an operating
business;
•
our
capital structure;
•
an
assessment of our executive officers and their experience in identifying
acquisition targets and structuring
acquisitions;
•
general
conditions of the securities markets at the time of the
offering;
•
the
likely competition for target
businesses;
•
the
likely number of potential targets;
and
•
our
executive officers’ estimate of our operating expenses for the next 24
months.
We
expect
that an initial public offering of $300,000,000 will enable us to consummate
an
initial business combination with a business whose fair market value is at
least
$228,760,471 The actual amount of consideration which we will be able
to pay for the initial business combination will depend on whether we choose,
or
are able, to pay a portion of the business combination consideration with shares
of our common stock or if we are able to finance a portion of the consideration
with shares of our common stock or with debt financing. Although
these factors were considered, the determination of our per unit offering price
and aggregate proceeds was more arbitrary than typically would be the case
if we
were an operating company, as it is based on our executive officers’ estimate of
the amount needed to fund our operations for the next 24 months and to
consummate an initial business combination, since we have no operating history
or financial results. In addition, because we have not identified any
specific target businesses, management’s assessment
25
of
the
financial requirements necessary to consummate an initial business combination
may prove to be inaccurate, in which case we may not have sufficient funds
to
consummate an initial business combination and we will be required to either
find additional financing or liquidate.
A
stockholder who abstains from voting will lose the ability to receive a pro
rata
share of the funds in the trust account if we consummate an initial business
combination.
Prior
to
the consummation of our initial business combination, we will submit the
transaction to our stockholders for approval, even if the nature of the
acquisition is such as would not ordinarily require stockholder approval under
applicable state law. If we achieve a quorum for the meeting, only
stockholders who exercise their right to vote will affect the outcome of the
stockholder vote. Abstentions are not considered to be voting “for”
or “against” the transaction. Any stockholder who abstains from
voting would be bound by the decision of the majority of stockholders who do
vote. As a result, an abstaining shareholder will lose the ability to
receive a pro rata share of the trust account, including accrued interest (net
of taxes payable on such interest income and after release of up to $2,250,000
of interest income, after tax, to fund working capital requirements), which
would be available to a shareholder that votes against the initial business
combination and exercises its conversion rights.
We
may require stockholders who wish to convert their shares in connection with
a
proposed business combination to comply with specific requirements for
conversion that may make it more difficult for them to exercise their conversion
rights prior to the deadline for exercising their
rights.
We
may
require public stockholders who wish to exercise their conversion rights
regarding their shares in connection with a proposed business combination
to
either tender their certificates to our transfer agent or to deliver their
shares to the transfer agent electronically using the Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System at any time
up until the business day immediately preceding the vote taken at the
stockholder meeting relating to such business combination. In order
to obtain a physical stock certificate, a stockholder’s broker and/or clearing
broker, DTC and our transfer agent will need to act to facilitate this
request. It is our understanding that stockholders should generally
allot at least two weeks to obtain physical certificates from the transfer
agent. However, because we do not have any control over the process, it
may take
significantly longer than two weeks to obtain a physical stock certificate
and
you may not be able to convert your shares in time. While we have been
advised
that it takes a short time to deliver shares through the DWAC System, we
cannot
assure you of this fact. Accordingly, we will only require
stockholders to deliver their certificates prior to the vote if, in accordance
with the American Stock Exchange’s proxy notification recommendations,
stockholders receive the proxy solicitation materials at least twenty days
prior
to the meeting. However, if it takes longer than we anticipate for
stockholders to deliver their shares, stockholders who wish to exercise
their
conversion rights may be unable to meet the deadline for exercising their
conversion rights and thus may be unable to convert their
shares.
We
will proceed with a business combination even if public stockholders owning
in
the aggregate one share less than 30% of the shares sold in this offering
exercise their conversion rights.
We
will
proceed with a business combination only if public stockholders owning at
most
an aggregate of one share less than 30% of the shares sold in this offering
exercise their conversion rights. Accordingly, the public stockholders owning
in
the aggregate one share less than 30% of the shares sold in this offering
may
exercise their conversion rights and we could still consummate a proposed
business combination. We have increased the conversion percentage (from the
20% that is customary in similar offerings to 30%) in order to reduce the
likelihood that a small group of investors holding a block of our stock will
be
able to stop us from completing a business combination that may otherwise
be
approved by a large majority of our public stockholders. As a result of this
change, it may be easier for us to complete a business combination even in
the
face of a strong stockholder dissent, thereby negating some of the protections
of having a lower conversion threshold to public stockholders. Furthermore,
the
ability to consummate a transaction despite shareholder disapproval in excess
of
what would be permissible in a traditional blank check offering may be viewed
26
negatively
by potential investors seeking shareholder protections consistent with
traditional blank check offerings.
Our
business combination may require us to use substantially all of our cash
to pay
the purchase price. In such a case, because we will not know how many
stockholders may exercise their conversion rights, we may need to arrange
third
party financing to help fund our business combination in case a larger
percentage of stockholders exercise their conversion rights than we expect.
Additionally, even if our business combination does not require us to use
substantially all of our cash to pay the purchase price, if a significant
number
of stockholders exercise their conversion rights, we will have less cash
available to use in furthering our business plans following a business
combination and may need to arrange third party financing. We have not taken
any
steps to secure third party financing for either situation, and we cannot
assure
you that we would be able to obtain such financing on terms favorable to
us or
at all.
If
third parties bring claims against us, the proceeds held in the trust account
could be reduced and the per share liquidation price received by our public
stockholders would be less than approximately $9.83 per
share.
Placing
the funds in a trust account may not protect those funds from third-party claims
against us. Although we will seek to have all vendors, providers of
financing, if any, prospective target businesses and other entities with whom
we
execute agreements waive any right, title, interest or claim of any kind in
or
to any monies held in the trust account for the benefit of our public
stockholders, we are not obligated to obtain a waiver from any potential
creditor or potential target business and there is no guarantee that they will
agree to provide such a waiver, which is not a condition to our doing business
with anyone. Examples of possible instances where we may engage a
third party that refuses to execute a waiver include the engagement of a third
party consultant whose particular expertise or skills are believed by our
executive officers and directors to be significantly superior to those of other
consultants that would agree to execute a waiver or if our executive officers
and directors are unable to find a provider of required services willing to
provide the waiver. In any event, our executive officers and
directors would perform an analysis of the alternatives available to us and
would enter into an agreement with a third party that did not execute a waiver
only if they believed that such third party’s engagement would be significantly
more beneficial to us than any alternative. We will seek to secure
waivers that we believe are valid and enforceable, but it is possible that
a
waiver may later be found to be invalid or unenforceable. In
addition, there is no guarantee that such entities will agree to waive any
claims they may have in the future as a result of, or arising out of, any
negotiations, contracts, or agreements with us and will not seek recourse
against the trust account for any reason. Accordingly, the proceeds
held in the trust account could be subject to claims that would take priority
over the claims of our public stockholders and the per share liquidation price
could be less than approximately $9.83, plus interest, due to claims of such
creditors or other entities. If we are unable to consummate an
initial business combination and are required to liquidate, our sponsor and
each
of our executive officers have agreed, on a joint and several basis, to
reimburse us for our debts to any vendor for services rendered or products
sold
to us, potential target businesses or to providers of financing, if any, in
all
cases only to the extent necessary to ensure that such claims do not reduce
the
amount in the trust account. Based on representations made to us by
our sponsor and each of our executive officers, we currently believe that they
are of substantially means and capable of funding a shortfall in our trust
account to satisfy their foreseeable indemnification
obligations. However, we have not asked them to reserve for such an
eventuality. We cannot assure you that our sponsor and our executive
officers will be able to satisfy those obligations or that the proceeds in
the
trust account will not be reduced by such claims. In the event that
the proceeds in the trust account are reduced and our sponsor and our executive
officers assert that they are unable to satisfy their obligations or that they
have no indemnification obligations related to a particular claim, our
independent directors would determine whether we would take legal action against
our sponsor and our executive officers to enforce their indemnification
obligations. Furthermore, creditors may seek to interfere with the
distribution of the trust account pursuant to federal or state creditor and
bankruptcy laws, which could delay the actual distribution of such funds or
reduce the amount ultimately available for distribution to our public
stockholders. If we are required to file a bankruptcy case or an
involuntary bankruptcy case is filed against us that is not dismissed, the
funds
held in the trust account will be subject to applicable bankruptcy law
27
and
may
be included in our bankruptcy estate and subject to the claims of third parties
with priority over the claims of our stockholders. To the extent any
bankruptcy claims deplete the trust account, the per share liquidation
distribution would be less than the initial $9.83 per share held in the trust
account.
Our
independent directors may decide not to enforce our sponsor’s and our executive
officers’ indemnification obligations, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public
stockholders.
Our
sponsor and our executive officers have agreed to reimburse us for our debts
to
any vendor for services rendered or products sold to us, potential target
businesses or to providers of financing, if any, in each case only to the extent
necessary to ensure that such claims do not reduce the amount in the trust
account. In the event that the proceeds in the trust account are
reduced and our sponsor and our executive officers assert that they are unable
to satisfy their obligations or that they have no indemnification obligations
related to a particular claim, our independent directors would determine whether
we would take legal action against our sponsor to enforce its indemnification
obligations. While we currently expect that our independent directors
would take action on our behalf against our sponsor and our executive officers
to enforce their indemnification obligations, it is possible that our
independent directors in exercising their business judgment may choose not
to do
so in a particular instance. If our independent directors choose not
to enforce our sponsor’s and our executive officers’ indemnification
obligations, the amount of funds in the trust account available for distribution
to our public stockholders may be reduced and the per share liquidation
distribution could be less than the initial $9.83 per share held in the trust
account.
Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them in our
liquidation.
If
we are
unable to complete an initial business combination within 24 months after the
completion of this offering, our corporate existence will cease except for
the
purposes of winding up our affairs and liquidating pursuant to Section 278
of
the Delaware General Corporation Law, in which case we will, as promptly as
practicable thereafter, adopt a plan of distribution in accordance with Section
281(b) of the Delaware General Corporation Law. Section 278 provides that our
existence will continue for at least three years after its expiration for the
purpose of prosecuting and defending suits, whether civil, criminal or
administrative, by or against us, and of enabling us gradually to settle and
close our business, to dispose of and convey our property, to discharge our
liabilities and to distribute to our stockholders any remaining assets, but
not
for the purpose of continuing the business for which we were organized. Our
existence will continue automatically even beyond the three-year period for
the
purpose of completing the prosecution or defense of suits begun prior to the
expiration of the three-year period, until such time as any judgments, orders
or
decrees resulting from such suits are fully executed. Section 281(b) will
require us to pay or make reasonable provision for all then-existing claims
and
obligations, including all contingent, conditional, or unmatured contractual
claims known to us, and to make such provision as will be reasonably likely
to
be sufficient to provide compensation for any then-pending claims and for claims
that have not been made known to us or that have not arisen but that, based
on
facts known to us at the time, are likely to arise or to become known to us
within 10 years after the date of dissolution. Accordingly, we would be required
to provide for any creditors known to us at that time or those that we believe
could be potentially brought against us within the subsequent 10 years prior
to
distributing the funds held in the trust account to stockholders. However,
because we are a blank check company, rather than an operating company, and
our
operations will be limited to searching for prospective target businesses to
acquire, the only likely claims to arise would be from our vendors that we
engage after the consummation of this offering (such as accountants, lawyers,
investment bankers, etc.) and potential target businesses. We intend to have
all
vendors that we engage after the consummation of this offering and prospective
target businesses execute agreements with us waiving any right, title, interest
or claim of any kind in or to any monies held in the trust account. Accordingly,
we believe the claims that could be made against us should be limited, thereby
lessening the likelihood that any claim would result in any liability extending
to the trust account. However, we cannot assure you that we will properly assess
all claims that may be potentially brought against us. As such, our
stockholders could potentially be liable for any claims to the extent of
28
distributions
(but not more) received by them in a liquidation and any liability of our
stockholders may extend well beyond the third anniversary of such
liquidation.
If
we are
required to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our
stockholders. Furthermore, because we intend to distribute the
proceeds held in the trust account to our public stockholders promptly after
_________, 2009, this may be viewed or interpreted as giving preference to
our
public stockholders over any potential creditors with respect to access to
or
distributions from our assets. Furthermore, our directors may be
viewed as having breached their fiduciary duties to our creditors and/or may
have acted in bad faith, thereby exposing themselves and us to claims of
punitive damages, by paying public stockholders from the trust account prior
to
addressing the claims of creditors. We cannot assure that claims will
not be brought against us for these reasons.
Because
we have not selected any specific target businesses, you will be unable to
ascertain the merits or risks of any particular target business’s
operations.
Because
we have not yet identified or approached any specific target business with
respect to a business combination, there is no basis to evaluate the possible
merits or risks of any particular target business’s operations, financial
condition, or prospects. To the extent we consummate an initial
business combination, we may be affected by numerous risks inherent in the
business operations with which we combine. For example, if we combine
with a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage
entity. Although our executive officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure
you that we will properly ascertain or assess all of the significant risk
factors, or that we will have adequate time to complete due
diligence. Furthermore, some of these risks may be outside of our
control, meaning that we can do nothing to control or reduce the chances that
those risks will adversely impact a target business. We also cannot
assure you that an investment in our units will ultimately prove to be more
favorable to investors than a direct investment, if such opportunity were
available, in an acquisition target. Except for the limitation that
an acquisition target have a fair market value of at least 80% of the balance
in
the trust account (excluding the amount held in the trust account representing
the deferred underwriting discount and commissions and taxes payable) at the
time of the acquisition, we will have virtually unrestricted flexibility in
identifying and selecting a prospective acquisition target. For a
more complete discussion of our selection of target businesses, see the section
entitled “Proposed Business—Consummating an Initial Business
Combination—Selection of a Target and Structuring of an Initial Business
Combination.”
A
significant portion of working capital could be expended in pursuing business
combinations that are not consummated.
It
is
anticipated that the investigation of each specific target business and the
negotiation, drafting and execution of relevant agreements, disclosure
documents, and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and
others. In addition, we may opt to make down payments or pay
exclusivity or similar fees in connection with structuring and negotiating
a
business combination. If a decision is made not to consummate a
specific business combination, the costs incurred up to that point in connection
with the abandoned transaction, potentially including down payments or
exclusivity or similar fees, will not be recoverable. Furthermore,
even if an agreement is reached relating to a specific target business, we
may
fail to consummate an initial business combination for any number of reasons
including those beyond our control, such as if our public stockholders holding
30% or more of our common stock vote against an initial business combination
even though a majority of our public stockholders approve the
transaction. Any such event will result in a loss to us of the
related costs incurred, which could materially adversely affect subsequent
attempts to locate and combine with another business.
29
We
may issue additional shares of our capital stock, including through convertible
debt securities, to consummate an initial business combination, which would
reduce the equity interest of our stockholders and may cause a change in control
of our ownership.
Our
amended and restated certificate of incorporation authorizes the issuance
of up
to 106,000,000 shares of common stock, par value $0.0001 per share, and 5,000
shares of preferred stock, par value $0.0001 per share. Immediately
after this offering, there will be 16,375,000 authorized but unissued shares
of
our common stock available for issuance (after appropriate reservation of
shares
issuable upon full exercise of the underwriters' over-allotment option, all
outstanding warrants and the warrants included in the co-investment units)
and
all of the 5,000 shares of preferred stock available for
issuance. Although we have no commitments as of the date of this
offering to issue any additional securities, we may issue a substantial number
of additional shares of our common stock, preferred stock or a combination
of
both, including through convertible debt securities, as consideration for
or to
finance a business combination. The issuance of additional shares of
our common stock or any number of shares of preferred stock, including upon
conversion of any debt securities may:
•
significantly
reduce the equity interest of investors in this
offering;
•
may
subordinate the rights of holders of common stock if preferred stock
is
issued with rights senior to those afforded to our common
stock;
•
cause
a change in control which may affect, among other things, our ability
to
use our net operating loss carryforwards, if any, and result in the
resignation or removal of our current executive officers and directors;
and
•
adversely
affect prevailing market prices for our common stock and
warrants.
Our
agreement with the underwriters prohibits us, prior to an initial business
combination, from issuing additional units, additional common stock, preferred
stock, additional warrants, or any options or other securities convertible
or
exchangeable into common stock or preferred stock which participates in any
manner in the proceeds of the trust account, or which votes as a class with
the
common stock on a business combination.
We
may issue additional shares of our common stock as consideration for or to
finance an initial business combination, which may dilute the equity interest
of
our stockholders.
We
may
acquire all or part of a target business through a share for share exchange
or
to finance a portion of the initial business combination consideration by
issuing additional shares of our common stock. Such additional equity
may be issued at a price below the then current trading price for shares of
our
common stock, resulting in dilution of the equity interest of our then current
public stockholders. At this time, no financing arrangements have
been entered into or are contemplated with any third parties to raise any
additional funds to finance an initial business combination through the sale
of
additional equity or otherwise.
We
may be unable to obtain additional financing, if required, to consummate an
initial business combination or to fund the operations and growth of the target
business, which could compel us to restructure or abandon a particular business
combination.
Although
we believe that the net proceeds of this offering will be sufficient to allow
us
to consummate a business combination, because we have not yet identified or
approached any prospective target businesses, we cannot ascertain the capital
requirements for any particular business combination. If the net
proceeds of this offering prove to be insufficient, because of the size of
the
initial business combination, the depletion of the available net proceeds in
search of target businesses, or because we become obligated to convert into
cash
a significant number of shares from dissenting stockholders, we may be required
to seek additional financing
30
through
the issuance of equity or debt securities or other financing
arrangements. We cannot assure you that such financing will be
available on acceptable terms, if at all.
Although
we have no current plans to do so, if we were to incur a substantial amount
of
debt to finance a business combination, such incurrence of debt
could:
•
lead
to default and foreclosure on our assets if our operating revenues
after a
business combination are insufficient to pay our debt
obligations;
•
cause
an acceleration of our obligation to repay the debt, even if we make
all
principal and interest payments when due, if we breach the covenants
contained in the terms of any debt documents, such as covenants that
require the maintenance of certain financial ratios or reserves,
without a
waiver or renegotiation of such
covenants;
•
create
an obligation to repay immediately all principal and accrued interest,
if
any, upon demand to the extent any debt securities are payable on
demand;
•
require
us to dedicate a substantial portion of our cash flow to pay principal
and
interest on our debt, which will reduce the funds available for dividends
on our common stock, working capital, capital expenditures, acquisitions
and other general corporate
purposes;
•
limit
our flexibility in planning for and reacting to changes in our business
and in the industry in which we
operate;
•
make
us more vulnerable to adverse changes in general economic, industry,
and
competitive conditions and adverse changes in government
regulation;
•
limit
our ability to borrow additional amounts for working capital, capital
expenditures, acquisitions, debt service requirements, execution
of our
strategy or other purposes; and
•
place
us at a disadvantage compared to our competitors who have less
debt.
To
the
extent that additional financing proves to be unavailable when needed to
consummate a particular business combination, we may be compelled to restructure
or abandon that particular business combination and seek alternative target
businesses. In addition, if we consummate a business combination, we
may require additional financing to fund the operations or growth of the target
business or businesses. The failure to secure additional financing
could have a material adverse effect on the continued development or growth
of
our combined business or businesses. None of our executive officers,
directors or stockholders is required to provide any financing to us in
connection with or after the consummation of an initial business
combination.
The
desire of our current executive officers and directors to remain with us
following an initial business combination may result in a conflict of interest
in determining whether a particular target business is appropriate for a
business combination and in the public stockholders’ best
interests.
Messrs.
William Mack, Robert Baker, Richard Baker and Lee Neibart currently intend
to
continue to be involved in our management following our initial business
combination. If any or all of them decide to do so, the personal and
financial interests of our current executive officers and directors may
influence them to condition a business combination on their retention by us
and
to view more favorably target businesses that offer them a continuing role,
either as an officer, director, consultant, or other third-party service
provider, after the business combination. Messrs. Mack, Robert Baker,
Richard Baker and Neibart, in their capacity as our executive officers, could
be
negotiating the terms and conditions of the business combination on our behalf
at the same time that they, as individuals, were negotiating the terms and
conditions related to an employment,
31
consulting
or other agreement with representatives of the potential business combination
candidate. As a result, there may be a conflict of interest in the
negotiation of the terms and conditions related to such continuing relationships
as our executive officers and directors may be influenced by their personal
and
financial interests rather than the best interests of our public
stockholders.
If
we
acquire a target business in an all-cash transaction, it would be more likely
that our current executive officers and directors would remain with us, if
they
choose to do so. If our initial business combination were structured
as a merger in which the owners of the target business were to control us
following a business combination, it may be less likely that our current
management would remain with us because control would rest with the owners
of
the target business and not our current management, unless otherwise negotiated
as part of the transaction in the acquisition agreement, an employment agreement
or other arrangement.
Our
executive officers and directors will allocate their time to other businesses,
thereby causing conflicts of interest in their determination as to how much
time
to devote to our affairs. This could have a negative impact on our
ability to consummate a business combination.
Our
executive officers and directors are not required to, and will not, commit
their
full time to our affairs, which may result in a conflict of interest in
allocating their time between our operations and other businesses. We
do not intend to have any full-time employees prior to the consummation of
an
initial business combination. Each of our executive officers and
directors is engaged in several other business endeavors and they are not
obligated to contribute any specific number of hours per week to our
affairs. Mr. Mack continues to serve as senior partner of Apollo Real
Estate Advisors, or Apollo, and is president of the corporate partners of
the
Apollo Real Estate Funds, Inc. Mr. Robert Baker continues to serve as
the Chairman of National Realty & Development Corporation and a founder of
NRDC Equity Partners. Richard Baker continues to serve as president
and chief executive officer of NRDC Real Estate Advisors, LLC and NRDC Equity
Partners. Mr. Neibart is a partner of Apollo. Our outside
directors also serve as officers and board members for other entities,
including, without limitation, Amalgamated Bank, PBS Realty Advisors LLC,
Ethan
Allen Inc., the Jim Pattison Group, National Cinemedia, LLC, Harman
International Industries, Inc., E.W. Scripps Company and Canadian Imperial
Bank of Commerce. If our executive officers’ and directors’ other
business affairs require them to devote substantial amounts of time to such
affairs in excess of their current commitment levels, it could limit their
ability to devote time to our affairs which may have a negative impact on
our
ability to consummate an initial business combination.
Our
executive officers and directors are, and may in the future become, affiliated
with entities and, accordingly, may have conflicts of interest in determining
to
which entity a particular business opportunity should be
presented.
Following
the completion of this offering and until we consummate an initial business
combination, we intend to engage in the business of identifying and combining
with one or more operating businesses. Our executive officers and
directors are, or may in the future become, affiliated with entities that are
engaged in a similar business. For example, Messrs. Mack and Neibart
continue to serve as executives of Apollo. Apollo and its affiliated
funds may compete with us for certain investment and acquisition opportunities
in the real estate industry. In each case, our executive officers’
and directors’ existing directorships may give rise to fiduciary obligations
that take priority over any fiduciary obligation owed to us.
We
have
entered into a business opportunity right of first offer agreement with our
sponsor, NRDC Real Estate Advisors, LLC and NRDC Equity Partners and with
our
executive officers and directors. This right of first offer provides
that from the date of this prospectus until the earlier of the consummation
of
our initial business combination or our liquidation, we will have a right
of
first offer if any of these parties becomes aware of, or involved with, a
business combination opportunity with any operating business. Subject
to their respective pre-existing fiduciary obligations, these parties to
the
right of first offer agreement will, and
32
will
cause companies or entities under their management or control, to first offer
any such business opportunity to us and they will not, and will cause each
other company or entity under their management or control not, to pursue
any
such business opportunity unless and until our board of directors, including
a
majority of our disinterested independent directors, has determined that
we will
not pursue such opportunity.
We
recognize that each of our executive officers and directors may be deemed
an
affiliate of any company for which such executive officer or director serves
as
an officer or director or for which such executive officer or director
otherwise
has a pre-existing fiduciary duty and that a conflict of interest could
arise if
an opportunity is appropriate for one of such companies. As part of
this right of first offer, we have established procedures with respect
to the
sourcing of a potential business combination by our executive officers
and
directors to eliminate such conflict for our executive officers and directors,
whereby a potential business combination that must be presented to
any company for which such executive officer or director, as the case may
be, serves as an officer or director or otherwise has a pre-existing fiduciary
duty (other than our sponsor, NRDC Real Estate Advisors, LLC and NRDC Equity
Partners) will not be presented to us until after such executive officer
or
director has presented the opportunity to such company and such company
has
determined not to proceed.
None
of our executive officers or directors has ever been associated with a publicly
held blank check company.
None
of
our executive officers or directors has ever served as an officer or director
of
a development stage public company with the business purpose of raising funds
to
acquire an operating business. Accordingly, you may not be able to
adequately evaluate their ability to successfully consummate an initial business
combination through a blank check company or a company with a structure similar
to ours.
Because
each of our executive officers and directors directly or indirectly owns shares
of our common stock that will not participate in liquidating distributions,
they
may have a conflict of interest in determining whether a particular target
business is appropriate for an initial business
combination.
Messrs.
Mack, Robert Baker, Richard Baker and Neibart, each indirectly owns shares
of
our common stock through ownership in our sponsor. In addition, our
other directors own shares of our common stock. Each of our sponsor
and our executive officers and directors have agreed to waive their right
to
receive distributions from the trust account upon our liquidation with respect
to shares of our common stock they acquired prior to the completion of this
offering, and it and they would lose its and their entire investment in us
were
this to occur. Therefore, our executive officers’ and directors’
personal and financial interests may influence their motivation in identifying
and selecting target businesses and consummating an initial business combination
in a timely manner. This may also result in a conflict of interest
when determining whether the terms, conditions and timing of a particular
business combination are appropriate and in our stockholders’ best
interest.
Our
executive officers’ and directors’ interests in obtaining reimbursement for any
out-of-pocket expenses incurred by them may lead to a conflict of interest
in
determining whether a particular target business is appropriate for a business
combination and in the public stockholders’ best
interest.
Our
executive officers and directors will not receive reimbursement for any
out-of-pocket expenses incurred by them to the extent that such expenses exceed
the amount of available proceeds not deposited in the trust account, unless
the
initial business combination is consummated. The amount of available
proceeds is based upon our executive officers’ estimate of the amount needed to
fund our operations for the next 24 months and consummate an initial business
combination. This estimate may prove to be inaccurate, especially if
a portion of the available proceeds is used to make a down payment in connection
with an initial business combination or pay exclusivity or similar fees or
if we
expend a significant portion of the available proceeds in pursuit of an initial
business combination that is not consummated. The financial interest
of our executive officers and directors could influence their motivation in
selecting a target and thus, there may be a conflict of
33
interest
when determining whether a particular business combination is in our public
stockholders’ best interest.
We
may engage in a business combination with one or more target businesses that
have relationships with entities that may be affiliated with our executive
officers, directors or existing stockholders which may raise potential conflicts
of interest.
In
light
of our executive officers’, directors’ and existing stockholders’ involvement
with other companies and our intent to consummate an initial business
combination, we may decide to acquire one or more businesses affiliated with
our
executive officers, directors or existing stockholders. Certain of
our executive officers and directors, identified below, are affiliated with
the
following entities that may compete with us for combination with target
businesses: Mr. Mack with Apollo and its affiliated real estate funds and
portfolio companies and Mack-Cali Realty Corporation; Mr. Richard Baker with
Lord & Taylor and Hudson’s Bay Company; Mr. Neibart with Apollo and its
affiliated real estate funds and portfolio companies and Linens ‘N Things; and
our other directors with companies including, without limitation, Amalgamated
Bank, PBS Realty Advisors LLC, Ethan Allen Inc., the Jim Pattison Group,
National Cinemedia, LLC, Harman International Industries, Inc., E.W.
Scripps Company and Canadian Imperial Bank of Commerce. Our executive
officers, directors and existing stockholders are not currently aware of
any
specific opportunities to consummate a business combination with any entities
with which they are affiliated, and there have been no preliminary discussions
concerning a business combination with any such entity or
entities. Although we will not be specifically focusing on, or
targeting, any transaction with any affiliated entities, we would consider
such
a transaction if we determined that such affiliated entity met our criteria
for
a business combination as set forth in “Proposed Business—Consummating an
Initial Business Combination—Selection of a Target and Structuring of an Initial
Business Combination”. Despite our agreement to obtain an opinion
from an independent investment banking firm regarding the fairness to our
stockholders from a financial point of view of a business combination with
one
or more businesses affiliated with our existing stockholders, or our current
executive officers and directors, potential conflicts of interest still may
exist and, as a result, the terms of the initial business combination may
not be
as advantageous to our public stockholders as they would be absent any conflicts
of interest.
We
will not generally be required to obtain a determination of the fair market
value of a target business or target businesses from an unaffiliated,
independent investment banking firm.
Our
initial business combination must be with one or more operating businesses
whose
fair market value is at least equal to 80% of the balance in the trust account
(less the deferred underwriting discounts and commissions and taxes payable)
at
the time of such combination. The fair market value of such business
or businesses will be determined by our board of directors based upon standards
generally accepted by the financial community, such as actual and potential
sales, earnings, cash flow and book value. We have agreed to obtain
an opinion from an unaffiliated, independent investment banking firm with
respect to the satisfaction of such criteria if one of our executive officers
or
directors is affiliated with that target business. However, in other
situations, we will not be required to obtain an opinion from an investment
banking firm as to the fair market value if our board of directors independently
determines that the target business or businesses have sufficient fair market
value.
The
American Stock Exchange may delist our securities from trading on its exchange
which could limit investors’ ability to make transactions in our securities and
subject us to additional trading restrictions.
We
intend
that our units, and, after the date of separation, shares of common stock and
warrants, which we refer to, collectively, as our securities, will be listed
on
the American Stock Exchange on or promptly after the date of this
prospectus. We cannot assure you that our securities will be, or will
continue to be, listed on the American Stock Exchange in the future, prior
to a
business combination. Additionally, in connection with our initial
business combination, it is likely that the American Stock Exchange may require
us
34
to
file a new initial listing application and meet its
initial listing requirements as opposed to its more lenient continued listing
requirements. We cannot assure you that we will be able to meet those
initial listing requirements at that time.
If
the
American Stock Exchange delists our securities from trading on its exchange
and
we are not able to list our securities on another national securities exchange,
we expect our securities could be quoted on the OTC Bulletin Board or the “pink
sheets.” As a result, we could face significant material adverse consequences
including:
•
a
limited availability of market quotations for our
securities;
•
a
determination that our common stock is a “penny stock” which will require
brokers trading in our common stock to adhere to more stringent rules
and
possibly result in a reduced level of trading activity in the secondary
trading market for our securities;
•
a
limited amount of news and analyst coverage;
and
•
a
decreased ability to issue additional securities or obtain additional
financing in the future.
The
National Securities Markets Improvement Act of 1996, which is a federal statute,
prevents or preempts the states from regulating the sale of certain securities,
which are referred to as “covered securities.” Since we expect that our units,
and eventually our common stock and warrants will be listed on the American
Stock Exchange, our units, common stock and warrants will be covered
securities. Although the states are preempted from regulating the
sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and if there is a finding of
fraudulent activity, then the states can regulate or bar the sale of covered
securities in a particular case. While we are not aware of a state
having used these powers to prohibit or restrict the sale of securities issued
by blank check companies, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these
powers, to hinder the sale of securities of blank check companies in their
states. Further, if we were no longer listed on the American Stock
Exchange, our securities would not be covered securities and we would be subject
to regulation in each state in which we offer our securities.
If
our common stock becomes subject to the SEC’s penny stock rules, broker-dealers
may experience difficulty in completing customer transactions and trading
activity in our securities may be adversely affected.
If
at any
time our securities are no longer listed on the American Stock Exchange or
another exchange or we have net tangible assets of $5,000,000 or less or our
common stock has a market price per share of less than $5.00, transactions
in
our common stock may be subject to the “penny stock” rules promulgated under the
Securities Exchange Act of 1934, as amended, which we refer to as the Securities
Exchange Act. Under these rules, broker-dealers who recommend such
securities to persons other than institutional accredited investors
must:
•
make
a special written suitability determination for the
purchaser;
•
receive
the purchaser’s written agreement to a transaction prior to
sale;
•
provide
the purchaser with risk disclosure documents that identify certain
risks
associated with investing in “penny stocks” and that describe the market
for these “penny stocks,” as well as a purchaser’s legal remedies;
and
35
•
obtain
a signed and dated acknowledgment from the purchaser demonstrating
that
the purchaser has actually received the required risk disclosure
document
before a transaction in “penny stock” can be
completed.
If
our
common stock becomes subject to these rules, broker-dealers may find it
difficult to effect customer transactions and trading activity in our securities
may be adversely affected. As a result, the market price of our
securities may be depressed, and you may find it more difficult to sell our
securities.
We
may only be able to consummate one business combination, which may cause us
to
be solely dependent on a single business and a limited number of services or
products.
The
net
proceeds from this offering and the private placement, after reserving $250,000
of the proceeds for our operating expenses, will provide us with approximately
$285,950,589 (or $327,800,589 if the over-allotment option is exercised in
full), excluding deferred underwriting discounts and commissions, which we
may
use to consummate our initial business combination. Although we are
permitted to consummate our initial business combination with more than one
target business, we currently intend to consummate our initial business
combination with a single operating business whose fair market value is at
least
equal to 80% of the balance in the trust account (less the deferred underwriting
discounts and commissions and taxes payable) at the time of the initial business
combination. If we acquire more than one target business, additional
issues would arise, including possible complex accounting issues, which would
include generating pro forma financial statements reflecting the operations
of
several target businesses as if they had been combined, and numerous logistical
issues, which would include attempting to coordinate the timing of negotiations,
proxy statement disclosure and closing, with multiple target
businesses. In addition, we would be exposed to the risk that
conditions to closings with respect to the initial business combination with
one
or more of the target businesses would not be satisfied, bringing the fair
market value of the initial business combination below the required threshold
of
80% of the balance in the trust account (less the deferred underwriting
discounts and commissions and taxes payable). As a result, we are
likely to consummate an initial business combination with only a single
operating business, which may have only a limited number of services or
products. The resulting lack of diversification may:
•
result
in our being dependent upon the performance of a single operating
business;
•
result
in our being dependent upon the development or market acceptance
of a
single or limited number of services, processes or products;
and
•
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 an initial business
combination.
In
this
case we will not be able to diversify our operations or benefit from the
possible spreading of risks or offsetting of losses, unlike other entities
that
may have the resources to consummate several business combinations in different
industries or different areas of a single industry so as to diversify risks
and
offset losses. Further, the prospects for our success may be entirely
dependent upon the future performance of the initial target business or
businesses we acquire.
Any
attempt to consummate more than one transaction as our initial business
combination will make it more difficult to consummate our initial business
combination.
In
the
event that we are unable to identify a single operating business with which
to
consummate an initial business combination, we may seek to combine
contemporaneously with multiple operating businesses whose collective fair
market value is at least equal to 80% of the balance in the trust account (less
the deferred underwriting discounts and commissions and taxes payable) at the
time of those combinations. Business combinations involve a number of
special risks, including diversion of management’s attention, legal,
36
financial,
accounting and due diligence expenses, and general risks that transactions
will
not be consummated. To the extent we try to consummate more than one
transaction at the same time, all of these risks will be exacerbated, especially
in light of our limited financial and other resources. Consummating
our initial business combination through more than one transaction likely would
result in increased costs as we would be required to conduct a due diligence
investigation of more than one business and negotiate the terms of the initial
business combination with multiple entities. In addition, due to the
difficulties involved in consummating multiple business combinations
concurrently, our attempt to consummate our initial business combination in
this
manner would increase the chance that we would be unable to successfully
consummate our initial business combination in a timely manner. In
addition, if our initial business combination entails simultaneous transactions
with different entities, each entity will need to agree that its transaction
is
contingent upon the simultaneous closing of the other transactions, which may
make it more difficult for us, or delay our ability, to consummate the initial
business combination. As a result, if we attempt to consummate our
initial business combination in the form of multiple transactions, there is
an
increased risk that we will not be in a position to consummate some or all
of
those transactions, which could result in our failure to satisfy the
requirements for an initial business combination and force us to
liquidate.
We
may combine with a target business with a history of poor operating performance
and there is no guarantee that we will be able to improve the operating
performance of that target business.
Due
to
the competition for business combination opportunities, we may combine with
a
target business with a history of poor operating performance if we believe
that
target business has attractive attributes that we believe could be the basis
of
a successful business after consummation of our initial business
combination. A business with a history of poor operating performance
may be characterized by, among other things, several years of financial losses,
a smaller market share than other businesses operating in a similar geographical
area or industry or a low return on capital compared to other businesses
operating in the same industry. In determining whether one of these
businesses would be an appropriate target, we would base our decision primarily
on the fair market value of such a business. We would consider, among
other things, its operating income, its current cash flows and its potential
to
generate cash in the future, the value of its current contracts and our
assessment of its ability to attract and retain new
customers. However, combining with a target business with a history
of poor operating performance can be extremely risky and we may not be able
to
improve operating performance. If we cannot improve the operating
performance of such a target business following our business combination, then
our business, financial condition and results of operations will be adversely
affected. Factors that could result in our not being able to improve
operating performance include, among other things:
•
inability
to predict changes in technological
innovation;
•
competition
from superior or lower priced services and
products;
•
lack
of financial resources;
•
inability
to attract and retain key executives and
employees;
•
claims
for infringement of third-party intellectual property rights and/or
the
availability of third-party licenses;
and
•
changes
in, or costs imposed by, government
regulation.
If
we effect an initial business combination with a business located outside of
the
United States, we would be subject to a variety of additional risks that may
negatively impact our operations.
37
We
may
effect an initial business combination with a business located outside of the
United States. If we do, we would be subject to any special considerations
or
risks associated with businesses operating in the target’s home jurisdiction,
including any of the following:
•
rules
and
regulations or currency conversion or corporate withholding taxes on
individuals;
• tariffs
and trade barriers;
• regulations
related to customs and import/export matters;
• longer
payment cycles;
• tax
issues, such as tax law changes and variations in tax laws as compared to the
United States;
• currency
fluctuations and exchange controls;
• challenges
in collecting accounts receivable;
• cultural
and language differences;
• employment
regulations;
• crime,
strikes, riots, civil disturbances, terrorist attacks and wars; and
• deterioration
of political relations with the United States.
We
cannot
assure you that we would be able to adequately address these additional risks.
If we were unable to do so, our operations might suffer.
If
we effect an initial business combination with a business located outside of
the
United States, the laws applicable to such business will likely govern all
of
our material agreements and we may not be able to enforce our legal
rights.
If
we
effect an initial business combination with a business located outside of the
United States, the laws of the country in which such business operates will
govern almost all of the material agreements relating to its operations. We
cannot assure you that the target business will be able to enforce any of its
material agreements or that remedies will be available in this new jurisdiction.
The system of laws and the enforcement of existing laws in such jurisdiction
may
not be as certain in implementation and interpretation as in the United States.
The inability to enforce or obtain a remedy under any of our future agreements
could result in a significant loss of business, business opportunities or
capital. Additionally, if we acquire a business located outside of the United
States, it is likely that substantially all of our assets would be located
outside of the United States and some of our officers and directors might reside
outside of the United States. As a result, it may not be possible for investors
in the United States to enforce their legal rights, to effect service of process
upon our directors or officers or to enforce judgments of United States courts
predicated upon civil liabilities and criminal penalties of our directors and
officers under Federal securities laws.
Our
existing stockholders control a substantial interest in us and thus may
influence certain actions requiring a stockholder
vote.
Upon
completion of our offering, our existing stockholders will beneficially own
approximately 20% of our issued and outstanding shares of common stock and,
at
the time of our initial business combination, this percentage will increase
as a
result of the co-investment. In addition, there is no restriction on
the ability of our executive officers, directors and existing stockholders
to
purchase units or shares of our common stock either in this offering or in
the
market after completion of this offering. If they were to do so, the
percentage of our outstanding common stock held by our executive officers,
directors and existing stockholders would increase. Our board of
directors will be divided into three classes, each of which generally will
serve
for a term of three years, with only one class of directors being elected
in
each year. There may not be an annual
38
meeting
of stockholders to elect new directors prior to the consummation of an initial
business combination, in which case, all of the current directors will continue
in office at least until the consummation of the initial business
combination. If there is an annual meeting, as a consequence of this
“staggered” board of directors, only a minority of the board of directors would
be considered for election. As a result of their substantial
beneficial ownership through their indirect control of NRDC Capital Management,
LLC, Mr. Mack, our Chairman, Mr. Robert Baker, our Vice Chairman, Mr. Richard
Baker, our Chief Executive Officer, Mr. Neibart, our President, each may
exert
considerable influence on actions requiring a stockholder vote, including
the
election of executive officers and directors, amendments to our amended and
restated certificate of incorporation, the approval of benefit plans, mergers
and similar transactions (other than approval of the initial business
combination). Moreover, except to the extent stockholder proposals
are properly and timely submitted, our directors will determine which matters,
including prospective business combinations, to submit to a stockholder
vote. As a result, they will exert substantial control over actions
requiring a stockholder vote both before and following an initial business
combination.
Our
existing stockholders paid approximately $0.003 per share for their shares,
and
accordingly, you will experience immediate and substantial dilution from the
purchase of our common stock.
The
difference between the public offering price per share of our common stock
and
the pro forma net tangible book value per share of our common stock after this
offering is dilutive to you and the other investors in this
offering. The fact that our existing stockholders acquired their
shares of common stock at a nominal price has significantly contributed to
this
dilution. Assuming the offering is completed, you and the other new
investors will incur an immediate and substantial dilution of 29.7% or $2.97
per
share (the difference between the pro forma net tangible book value per share
of
$7.03 and the initial offering price of $10.00 per unit).
Our
outstanding warrants may have an adverse effect on the market price of common
stock and make it more difficult to consummate an initial business
combination.
In
connection with this offering, as part of the units, we will be issuing warrants
to purchase 30,000,000 shares of common stock. In addition, in
connection with the private placement, we will be issuing warrants to our
sponsor to purchase 8,000,000 shares of common
stock. Contemporaneously with the consummation of our initial
business combination, as part of the co-investment units to be purchased by
our
sponsor, we will issue 2,000,000 warrants to purchase 2,000,000 shares of our
common stock. To the extent we issue shares of common stock to
consummate an initial business combination, the potential for the issuance
of
substantial numbers of additional shares upon exercise of these warrants could
make us a less attractive partner for a business combination in the eyes of
a
target business, as such securities, when exercised, will increase the number
of
issued and outstanding shares of our common stock and the potential for such
issuance could reduce the value of the shares that may be issued to consummate
the initial business combination. Accordingly, the existence of our
warrants may make it more difficult to consummate an initial business
combination or may increase the cost of a target business if we are unable
to
consummate an initial business combination solely with
cash. Additionally, the sale, or potential sale, of the shares
underlying the warrants could have an adverse effect on the market price for
our
securities or on our ability to obtain future public financing. If
and to the extent these warrants are exercised, you may experience dilution
to
your holdings.
Our
existing stockholders’ exercise of their registration rights may have an adverse
effect on the market price of our common stock, and the existence of these
rights may make it more difficult to consummate an initial business
combination.
Our
sponsor is entitled to demand on up to three occasions that we register the
resale of its shares of common stock and private placement warrants and its
co-investment units, including the co-investment shares of common stock, the
co-investment warrants and the shares of common stock underlying the
co-investment warrants. Our sponsor and our directors also have
certain “piggyback” registration rights and the right to unlimited registration
on Form S-3 to the extent that we are eligible to use Form S-3. If
our sponsor and our directors exercise their registration rights with respect
to
all of their shares of common stock and warrants, then
39
there
will be an additional 20,625,000 shares (including 1,125,000 shares sold to
our
sponsor that are subject to forfeiture to the extent the underwriters do not
exercise their over-allotment option) of common stock eligible for trading
in
the public market. This potential increase in trading volume may have
an adverse effect on the market price of our common stock. In
addition, the existence of these rights may make it more difficult to consummate
an initial business combination or may increase the cost of a target business
in
the event that we are unable to consummate an initial business combination
solely with cash, as the stockholders of a particular target business may be
discouraged from entering into a business combination with us or will request
a
higher price for their securities as a result of these registration rights
and
the potential future effect their exercise may have on the trading market for
our common stock.
Failure
to maintain an effective registration statement and a prospectus available
for
use relating to the common stock underlying our warrants may deprive our
warrants of value and the market for our warrants may be
limited.
No
warrants will be exercisable and we will not be obligated to issue shares of
common stock unless at the time of exercise a registration statement relating
to
shares of common stock issuable upon exercise of the warrants is effective
and a
prospectus relating to shares of common stock issuable upon exercise of the
warrants is available for use and those shares of common stock have been
registered or qualified or deemed to be exempt under the securities laws of
the
state of residence of the holder of our warrants. The private
placement warrants will not be exercisable at any time when a registration
statement relating to the shares of common stock underlying the public warrants
is not effective and a prospectus relating to those shares is not available
for
use by the public warrant holders. So long as any of the public
warrants remain outstanding, the co-investment warrants will not be exercisable
at any time when a registration statement relating to the shares of common
stock
underlying the public warrants is not effective and a prospectus relating to
those shares is not available for use by the public warrant
holders. Holders of the warrants are not entitled to net cash
settlement and the warrants may only be settled by delivery of shares of our
common stock and not cash. Under the terms of a warrant agreement
between Continental Stock Transfer & Trust Company, as warrant agent, and
us, we have agreed to use our reasonable best efforts to maintain an effective
registration statement and prospectus available for use relating to common
stock
issuable upon exercise of the warrants until the expiration of the warrants,
and
to take such action as is necessary to qualify the common stock issuable upon
exercise of the warrants for sale in those states in which this offering was
initially qualified. However, we cannot assure you that we will be
able to do so. We have no obligation to settle the warrants for cash,
in any event, and the warrants may not be exercised and we will not deliver
securities therefore in the absence of an effective registration statement
or a
prospectus available for use. The warrants may never become
exercisable if we never comply with these registration requirements and, in
any
such case, the total price paid for each unit would effectively have been paid
solely for the shares of common stock included therein. In any case,
the warrants may be deprived of value and the market for the warrants may be
limited if a registration statement relating to the common stock issuable upon
the exercise of the warrants is not effective, a prospectus relating to the
common stock issuable upon the exercise of the warrants is not available for
use
or if the common stock is not qualified or exempt from qualification in the
jurisdictions in which the holders of the warrants reside.
If
we are deemed to be an investment company, we may be required to institute
burdensome compliance requirements and our activities may be restricted, which
may make it difficult for us to consummate an initial business combination
or
operate over the near term or long term in our intended
manner.
We
do not
plan to operate as an investment fund or investment company, or to be engaged
in
the business of investing, reinvesting or trading in securities. Our
plan is to acquire, hold, operate and grow for the long term one or more
operating businesses. We do not plan to operate as a passive investor
or as a merchant bank seeking dividends or gains from purchases and sales of
securities. Our principals are experienced as officers and directors
of operating companies.
Companies
that fall within the definition of an “investment company” set forth in Section
3 of the Investment Company Act of 1940, as amended, and the regulations
thereunder, which we refer to as the 1940
40
Act,
are
subject to registration and substantive regulation under the 1940
Act. Companies that are subject to the 1940 Act that do not become
registered are normally required to liquidate and are precluded from entering
into transactions or enforceable contracts other than as an incident to
liquidation. The basic definition of an “investment company” in the
1940 Act and related SEC rules and interpretations includes a company (1) that
is, proposes to be, or holds itself out as being engaged primarily in investing,
reinvesting or trading in securities; or (2) that has more than 40% of its
assets (exclusive of U.S. government securities and cash items) in “investment
securities,” or (3) that is a “special situation investment company” (such as a
merchant bank or private equity fund).
For
example, if we were deemed to be an investment company under the 1940 Act,
we
would be required to become registered under the 1940 Act (or liquidate) and
our
activities would be subject to a number of restrictions, including, among
others:
•
corporate
governance requirements and requirements regarding mergers and share
exchanges;
•
restrictions
on the nature of our investments;
•
restrictions
on our capital structure and use of multiple classes of securities;
and
•
restrictions
on our use of leverage and
collateral;
each
of
which may make it difficult for us to consummate an initial business
combination.
In
addition, we may have imposed upon us burdensome requirements,
including:
•
registration
as an investment company;
•
adoption
of a specific form of corporate structure;
and
•
reporting,
record keeping, voting, proxy, and disclosure requirements, and other
rules and regulations;
compliance
with which would reduce the funds we have available outside the trust account
to
consummate our initial business combination.
In
order
not to be regulated as an investment company under the 1940 Act, unless we
can
qualify for an exclusion, we must ensure that we are engaged primarily in an
initial business other than investing, reinvesting or trading of securities
and
that our activities do not include investing, reinvesting, owning, holding
or
trading “investment securities.” Our business will be to identify and consummate
a business combination and thereafter to operate the acquired business or
businesses for the long term. We do not plan to buy operating
businesses with a view to resale or profit from their resale. We do
not plan to buy unrelated businesses or to be a passive investor. We
do not believe that our anticipated principal activities will subject us to
the
1940 Act. To this end, the proceeds held in the trust account may
only be invested by the trustee in U.S. government securities and in assets
that
are considered “cash items” for purposes of Section 3(a)(2) of the 1940
Act. Pursuant to the trust agreement, the trustee is not permitted to
invest in securities or assets that are considered “investment securities”
within the meaning of Section 3(a) of the 1940 Act. By restricting
the investment of the proceeds to these instruments, and by having a business
plan targeted at acquiring, growing and operating businesses for the long term
(rather than on buying and selling businesses in the manner of a merchant bank
or private equity fund) we intend to avoid being deemed an “investment company”
within the meaning of the 1940 Act. This offering is not intended for
persons who are seeking a return on investments in government securities or
investment securities. The trust account and the purchase of
government securities for the trust account is intended as a holding place
for
funds pending the earlier to occur of either: (i) the consummation of our
primary business objective, which is a business combination, or (ii) absent
a
business
41
combination,
our return of the funds held in the trust account to our public stockholders
as
part of our plan of liquidation. If we do not invest the proceeds as
discussed above, we may be deemed to be subject to the 1940 Act. If
we were deemed to be subject to the 1940 Act, compliance with these additional
regulatory burdens would require additional expense for which we have not
accounted.
Our
directors, including those we expect to serve on our Audit Committee, may not
be
considered “independent” under the policies of the North American Securities
Administrators Association, Inc., and, therefore, may take actions or incur
expenses that are not deemed to be independently approved or independently
determined to be in our best interest.
Under
the
policies of the North American Securities Administrators Association, Inc.,
an
international organization devoted to investor protection, because all of our
directors may receive reimbursement for out-of-pocket expenses incurred by
them
in connection with activities on our behalf, such as attending meetings of
the
board of directors, identifying potential target businesses and performing
due
diligence on suitable business combinations, and all of our directors, directly
or indirectly, own shares of our securities, state securities administrators
could take the position that such individuals are not “independent.” If this
were the case, they would take the position that we would not have the benefit
of independent directors examining the propriety of expenses incurred on our
behalf and subject to reimbursement. There is no limit on the amount
of out-of-pocket expenses that could be incurred, and there will be no review
of
the reasonableness of the expenses by anyone other than our board of directors,
which would include persons who may seek reimbursement, or a court of competent
jurisdiction if such reimbursement is challenged. To the extent such
out-of-pocket expenses exceed the available proceeds not deposited in the trust
account, such out-of-pocket expenses would not be reimbursed by us unless we
consummate an initial business combination. Although we believe that
all actions taken by our directors on our behalf will be in our best interests,
whether or not they are deemed to be “independent,” we cannot assure you that
this will actually be the case. If actions are taken or expenses are
incurred that actually are not in our best interests, it could have a material
adverse effect on our business and operations and the price of our stock held
by
the public stockholders.
There
is currently no market for our securities and a market for our securities may
not develop, which would adversely affect the liquidity and price of our
securities.
There
is
currently no market for our securities. Investors therefore have no access
to
information about prior market history on which to base their investment
decision. Furthermore, an active trading market for our securities may never
develop or, if developed, it may not be sustained. You may be unable to sell
your securities unless a market can be established and sustained.
Compliance
with the Sarbanes-Oxley Act of 2002 will require substantial financial and
management resources and may increase the time and costs of completing an
acquisition.
Section
404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and report
on
our system of internal controls and requires that we have such system of
internal controls audited beginning with our Annual Report on Form 10-K for
the
year ending December 31, 2008. If we fail to maintain the adequacy of our
internal controls, we could be subject to regulatory scrutiny, civil or criminal
penalties and/or stockholder litigation. Any inability to provide reliable
financial reports could harm our business. Section 404 of the Sarbanes-Oxley
Act
also requires that our independent registered public accounting firm report
on
management’s evaluation of our system of internal controls. A target business
may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls
of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase
the time and costs necessary to complete any such acquisition. Furthermore,
any
failure to implement required new or improved controls, or difficulties
encountered in the implementation of adequate controls over our financial
processes and reporting in the future, could harm our operating results or
cause
us to fail to meet our reporting obligations. Inferior internal controls could
also cause investors to lose confidence in our reported financial information,
which could have a negative effect on the trading price of our
securities.
This
prospectus contains “forward-looking statements,” which include information
relating to future events, future financial performance, strategies,
expectations, competitive environment and regulation. These
forward-looking statements include, without limitation, statements regarding
our:
•
expectations
regarding competition for business combination
opportunities;
•
beliefs
regarding the types of businesses that we can purchase with the proceeds
from this offering;
•
expectations
regarding the prioritization of the fiduciary duties of our executive
officers and directors with respect to the allocation of business
opportunities and the consummation of any business
combination;
•
expectations
regarding the involvement of our executive officers following a business
combination;
•
estimate
regarding the operating expenses of our business before and after
the
consummation of an initial business combination and our expectation
that
we may require additional financing to fund the operations or growth
of
the target business or businesses;
•
expectations
regarding the waiver of any right, title, interest or claim of any
kind in
or to any monies held in the trust account by all vendors, prospective
target businesses or other entities we do business
with;
•
belief
that upon completion of the private placement and this offering,
we will
have sufficient funds to operate for at least the next 24 months,
assuming
that an initial business combination is not consummated during that
time;
•
expectations
regarding the timing of generating any
revenues;
•
expectations
regarding the trading of the units, common stock and warrants on
the
American Stock Exchange;
•
intention
to make liquidating distributions to our stockholders as soon as
reasonably possible if we have not consummated our initial business
combination and we are obligated to terminate our corporate existence
24
months after the completion of this offering;
and
•
plan
to seek stockholder approval before we consummate our initial business
combination.
These
forward-looking statements reflect our current views about future events and
are
subject to risks, uncertainties and assumptions. We wish to caution
readers that certain important factors may have affected and could in the future
affect our actual results and could cause actual results to differ significantly
from those expressed in any forward-looking statement.
43
USE
OF PROCEEDS
We
estimate that the net proceeds of this offering and the private placement will
be used as set forth in the following table:
Without
Over-Allotment Option
With
Over-Allotment Option
Gross
Proceeds
Offering
$
300,000,000
$
345,000,000
Private
Placement
8,000,000
8,000,000
Total
Gross Proceeds
$
308,000,000
$
353,000,000
Offering
expenses (1)
Underwriting
discount (7% of gross proceeds of the offering) (2)
21,000,000
24,150,000
Legal
fees and expenses
400,000
400,000
Printing
and engraving expenses
90,000
90,000
Accounting
fees and expenses
60,000
60,000
SEC
registration fee
18,536
18,536
FINRA
filing fee
60,875
60,875
AMEX
listing fee
70,000
70,000
Miscellaneous
expenses
100,000
100,000
Total
offering expenses
$
21,799,411
$
24,949,411
Net
proceeds after offering expenses
286,200,589
328,050,589
Net
offering proceeds not held in the trust account
250,000
250,000
Net
proceeds held in the trust account for our benefit
$
285,950,589
$
327,800,589
Deferred
underwriting discounts held in the trust account
9,000,000
10,350,000
Total
amount in the trust account
$
294,950,589
$
338,150,589
Percentage
of the gross proceeds of the offering held in the trust
account
98.3
%
98.0
%
Use
of net proceeds not held in the trust account and amounts available
from
interest income earned after tax on the trust
account
Legal,
accounting and other expenses attendant to the structuring and negotiation
of a business combination
$
800,000
Due
diligence and investigation of prospective target business
(3)
800,000
Legal
and accounting fees relating to SEC reporting obligations
50,000
Administrative
fees relating to office space and administrative services ($7,500
per
month for 2 years)
180,000
Director
and officer insurance
300,000
Corporate
franchise taxes
120,000
Working
capital to cover potential deposits, down payments, exclusivity
fees,
finder’s fees, or similar fees or compensation, reserves, costs and
expenses associated with our liquidation, and other miscellaneous
expenses not yet identified (4)
250,000
Total
$
2,500,000
44
(1)
A
portion of the offering expenses have been paid from the funds we
received
in the form of a loan from NRDC Capital Management, LLC as described
below. This loan will be repaid out of the proceeds of this
offering.
(2)
Includes
deferred underwriting discounts and commissions equal to 3.0% of
the gross
proceeds from the sale of the units to the public stockholders, or
$9,000,000 ($10,350,000 if the underwriters’ over-allotment option is
exercised in full), which will be deposited in the trust account
and which
the underwriters have agreed to defer until the consummation of our
initial business combination. If we consummate an initial
business combination, $9,000,000 ($10,350,000 if the underwriters’
over-allotment option is exercised in full) will be paid to the
underwriters as deferred underwriting discounts and commissions (subject
to a $0.30 per share reduction for public stockholders who exercise
their
conversion rights). See the section entitled
“Underwriting—Discounts and
Commissions.”
(3)
These
expenses include any reimbursements to be made to our executive officers
and directors for out-of-pocket expenses incurred by them in performing
due diligence and activities in connection with the evaluation of
a
potential business combination, as well as any potential fees that
we may
pay to third parties, such as market research firms and other consultants,
that perform due diligence of a target business on our behalf (other
than
to the extent such fees are paid by our executive officers and directors
on our behalf and such persons are reimbursed in the amount and to
the
extent of such fees).
(4)
The
not yet identified miscellaneous expenses include, without limitation,
the
reimbursement of our executive officers and directors for out-of-pocket
expenses in connection with this offering, such as roadshow expenses
and
advances for offering costs made by them and not covered by the amounts
set aside for offering expenses set forth on the table above and
costs and
expenses associated with our
liquidation.
After
non-deferred expenses of this offering and the private placement, $294,950,589
(or $338,150,589 if the underwriters’ over-allotment option is exercised in
full) will be deposited in a trust account at JPMorgan Chase Bank,
N.A., maintained by Continental Stock Transfer & Trust Company, as
trustee. Except for payment of taxes and interest income
earned of up to $2,250,000 to fund our working capital requirements, the
proceeds will not be released from the trust account until the earlier of
the
consummation of an initial business combination or
our liquidation. We expect to use the proceeds held in the trust
account to acquire one or more domestic or foreign operating
businesses. Interest earned on the trust account (net of taxes
payable) will be held in the trust account for use in consummating an initial
business combination or released to investors upon exercise of their conversion
rights or upon our liquidation, as the case may be. However, we may
not use all of the funds remaining in the trust account in connection with
a
business combination, either because the consideration for the initial business
combination is less than the proceeds in the trust account or because we
finance
a portion of the consideration with our capital stock or debt
securities. In that event, the remaining proceeds held in the trust
account, as well as any other net proceeds not expended, will constitute
working
capital for our business after our initial business
combination. While it is difficult to determine what the specific
operating expenses of our business after consummation of an initial business
combination may be, we expect that they may include some or all of the
following: capital expenditures, general ongoing expenses, including overhead,
payroll and costs involved in expanding markets and in developing strategic
acquisitions or alliances. In addition, we may use any remaining
proceeds held in the trust account to satisfy any unpaid reimbursable
out-of-pocket expenses incurred by our executive officers and directors,
as well
as any unpaid finder’s fees or similar fees or compensation to the extent such
expenses, fees or compensation exceed the available proceeds not deposited
in
the trust account. If we consummate an initial business combination,
$9,000,000 (or $10,350,000 if the underwriters’ over-allotment option is
exercised in full) will be paid to the underwriters as deferred underwriting
discounts and compensation, as set forth in this prospectus (subject to a
$0.30
per share reduction for public stockholders who exercise their conversion
rights).
Net
proceeds of this offering and the private placement in the amount of $250,000
will not be held in the trust account and may be used to fund our operations
up
to the next 24 months, as described below.
45
We
expect
to use approximately $800,000 for legal, accounting and other expenses attendant
to the structuring and negotiation of an initial business combination, $800,000
for expenses related to due diligence and investigation of prospective target
businesses, and $50,000 for legal and accounting fees relating to SEC reporting
obligations. We expect that due diligence of prospective target
businesses will be performed by some or all members of our executive officers
and directors and may include engaging market research and valuation firms
as
well as other third-party consultants. None of our executive officers
or directors will receive any compensation for any due diligence efforts, other
than reimbursement of any out-of-pocket expenses they may incur on our behalf
while performing due diligence of prospective target businesses. Any
reimbursement of out-of-pocket expenses would occur at our
discretion. To the extent such out-of-pocket expenses exceed the
available proceeds not deposited in the trust account, such out-of-pocket
expenses would not be reimbursed by us unless and until we consummate a business
combination.
We
have
agreed to pay NRDC Capital Management, LLC a monthly fee of $7,500 for general
and administrative services, including office space, utilities and secretarial
support. We believe that, based on rents and fees for similar
services in Purchase, New York, the fees charged by NRDC Capital Management,
LLC
are at least as favorable as we could have obtained from unaffiliated third
parties.
We
expect
to use approximately $300,000 for premiums for director and officer insurance
for a 24-month period. In addition, we have reserved approximately
$120,000 for the payment of corporate franchise taxes. We intend to
use the excess working capital (approximately $250,000) for other expenses
incurred in structuring and negotiating an initial business combination and,
if
necessary, to cover the costs and expenses associated with our liquidation
and
winding-up (which we estimate would be in the range of $15,000 to
$25,000). For example, we may opt to make a deposit or down payment
or pay exclusivity or similar fees in connection with structuring and
negotiating our initial business combination. While we do not
presently anticipate engaging the services of professional firms that specialize
in business acquisitions, we may do so in the future to assist us in locating
suitable target businesses, in which event we may pay a finder’s fee, or other
compensation. We have not reserved any specific amounts for a
deposit, down payment, exclusivity fees, finder’s fees or similar fees or
compensation, each of which may have the effect of reducing the available net
proceeds not deposited in the trust account for payment of our ongoing expenses
and reimbursement of out-of-pocket expenses incurred on our
behalf. To the extent that any such fees or compensation exceeds the
available proceeds not deposited in the trust account, we would not be able
to
pay such fees or compensation unless we consummate an initial business
combination. In addition, the excess working capital will be used to
cover miscellaneous expenses that we have not yet identified, which may include,
without limitation, the reimbursement of our executive officers and directors
for out-of-pocket expenses in connection with this offering, such as roadshow
expenses and advances for offering costs made by them and not covered by the
amounts set aside for offering expenses described above.
We
believe that, upon consummation of this offering and the private placement,
we
will have sufficient available funds to operate at least for the next 24 months,
assuming that an initial business combination is not consummated during that
time. The amount of available proceeds is based on our executive
officers’ and directors’ estimate of the amount needed to fund our operations
for the next 24 months and to consummate a business combination. This
belief is based on the fact that in-depth due diligence will be undertaken
only
after we have negotiated and signed a letter of intent or other preliminary
agreement that addresses the terms of an initial business
combination. Although we do not know the rate of interest to be
earned on the trust account and are unable to predict an exact amount of time
it
will take to complete any initial business combination, we believe that
following the completion of this offering, it will take a significant amount
of
time to find a prospective target business and take all of the steps necessary
to complete an initial business combination. We anticipate that, even at an
interest rate of 3.0% per annum, the interest that will accrue on the trust
account during the time it will take to identify a target and complete an
acquisition will be sufficient to fund our working capital requirements. Given
the limited amount of time it will take to generate $2,250,000 million of
interest on the trust account, we anticipate receiving such interest income
generally shortly after we incur working capital expenses. However, if our
estimate of the costs of undertaking in-depth due diligence and negotiating
an
initial business combination is less than the actual amount necessary to do
so,
46
or
if
interest payments are not available to fund the expenses at the time we incur
them, we may be required to raise additional capital, the amount, availability
and cost of which is currently unascertainable. In this event, we could seek
such additional capital through loans or additional investments from members
of
our management team, but such members of our management team are not under
any
obligation to advance funds to, or invest in, us. To the extent that our
expenses exceed the amounts not held in the trust account and the interest
income of up to $2,250,000 million that may be released to us from the trust
account subject to the tax holdback (as described in more detail in this
prospectus), such out-of-pocket expenses could not be reimbursed by us unless
we
consummate an initial business combination. Although our executive officers
currently intend to continue to be involved in the management of the combined
company after our initial business combination, because the role of our officers
and directors after an initial business combination is uncertain, we have no
current ability to determine what remuneration, if any, will be paid to current
officers and directors after our initial business combination. Our officers
and
directors may, as part of any such combination, negotiate the repayment of
some
or all of the out-of-pocket expenses incurred by them that have not been
reimbursed by us prior to the closing of our initial business combination.
If
the owners of the target business do not agree to such repayment, this could
cause our officers and directors to view such potential initial business
combination unfavorably and result in a potential conflict of
interest.
However,
if we do not have sufficient proceeds available to cover our expenses, we may
be
required to obtain additional financing, either from our executive officers
and
directors, NRDC Capital Management, LLC or third parties. We may not
be able to obtain additional financing, and none of our management, including
our executive officers and directors, our existing stockholders or NRDC Capital
Management, LLC is obligated to provide any additional financing. If
we do not have sufficient proceeds not held in the trust account and cannot
find
additional financing, we may be required to dissolve and liquidate prior to
consummating an initial business combination.
NRDC
Capital Management, LLC has loaned a total of $200,000 to us for the payment
of
offering expenses. The loan is interest free and will be repaid upon
the completion of this offering out of the gross proceeds.
The
net
proceeds of this offering that are not immediately required for the purposes
set
forth above will be held in the trust account and invested only in money market
funds meeting certain conditions under Rule 2a-7 promulgated under the 1940
Act,
or securities issued by the United States so that we are not deemed to be an
investment company under the 1940 Act.
Other
than (i) the repayment of the $200,000 loan described above and (ii)
administrative services arrangement for services rendered to us, no compensation
of any kind, including finder’s and consulting fees, will be paid to any of our
executive officers, directors, or existing stockholders or any of their
respective affiliates prior to or in connection with the initial business
combination. However, our executive officers and directors will
receive reimbursement for any out-of-pocket expenses incurred by them in
connection with activities on our behalf, such as participating in the offering
process, identifying potential target businesses, and performing due diligence
on suitable business combinations. Although our executive officers
currently intend to continue to be involved in the management of the combined
company after our initial business combination, because the role of our current
executive officers and directors after an initial business combination is
uncertain, we have no current ability to determine what remuneration, if any,
will be paid to current officers and directors after an initial business
combination.
A
public
stockholder will be entitled to receive funds from the trust account, including
interest earned on its pro rata portion of the funds in the trust account (net
of taxes payable and after release of up to $2,250,000 of interest income,
after
tax, to fund working capital requirements, including the costs of our
liquidation), only in the event of our liquidation upon our failure to
consummate an initial business combination or if that public stockholder were
to
seek to convert shares into cash in connection with our initial business
combination that the public stockholder previously voted against and which
we
actually consummate.
47
In
no
other circumstances will a public stockholder have any right or interest of
any
kind to or in the trust account.
48
CAPITALIZATION
The
following table sets forth our capitalization as of July 13, 2007 and as
adjusted to give effect to the sale of our units in this offering and the sale
of warrants in the private placement, the application of the estimated net
proceeds derived from the sale of such securities, the repayment of a $200,000
loan payable to NRDC Capital Management, LLC and to a 6 for 5 stock split of
our
common stock. This table should be read in conjunction with our
selected financial data and the financial statements included elsewhere in
this
prospectus.
As
of July 13, 2007
Actual
As
Adjusted
Note
payable
$
200,000
—
Total
debt (1)
$
200,000
—
Common
stock, $0.0001 par value, 0 and 8,999,999 shares which are subject
to
possible conversion, shares at conversion value (2)
$
—
$
85,785,167
Stockholders’
equity (deficit):
Preferred
stock, $0.0001 par value, 5,000 shares authorized; none issued or
outstanding
$
—
$
—
Common
stock, $0.0001 par value, 106,000,000 shares authorized; 8,625,000
shares
issued and outstanding – actual; 28,500,001 shares issued and outstanding
– as adjusted (excluding 8,999,999 shares subject to possible
conversion)
$
862
$
2,850
(3)
Additional
paid-in capital
24,138
200,437,572
Deficit
accumulated during the development stage
(731
)
(731
)
Total
stockholders’ equity
$
24,269
$
200,439,691
Total
capitalization
$
224,269
$
286,224,858
(1)
Assumes
payment of, and therefore excludes, deferred underwriting discounts
and
commissions equal to 3.0% of the gross proceeds, or $9,000,000
($10,350,000 if the underwriters’ over-allotment option is exercised in
full), which will be deposited in the trust account and which the
underwriters have agreed to defer until the consummation of our initial
business combination. See the section entitled
“Underwriting—Discounts and
Commissions.”
(2)
If
we consummate an initial business combination, the conversion rights
afforded to our public stockholders, other than our executive officers,
directors and existing stockholders, may result in the conversion
into
cash of up to 8,999,999 shares sold in this offering at a per share
conversion price equal to the amount in the trust account (including
the
amount representing the deferred portion of the underwriting discounts
and
commissions), inclusive of any interest thereon (net of taxes payable
on
such interest income and after release of up to $2,250,000 of interest
income, after tax, to fund working capital requirements), as of two
business days prior to the proposed consummation of a business
combination, divided by the number of shares sold in this
offering.
(3)
Assumes
that the underwriters’ over-allotment option is not exercised and that
1,125,000 shares sold to our sponsor that are subject to forfeiture
to the
extent the underwriters do not exercise their over-allotment option
have
been forfeited.
49
DILUTION
The
difference between the public offering price per share of common stock, assuming
no value is attributed to the warrants included in the units, and the pro forma
net tangible book value per share of our common stock after this offering
constitutes the dilution to investors in this offering. Net tangible
book value per share is determined by dividing our net tangible book value,
which is our total tangible assets less total liabilities (including the value
of common stock that may be converted into cash), by the number of outstanding
shares of our common stock.
As
of
July 13, 2007, after giving effect to a 6 for 5 stock split of our common stock,
our net tangible book value was $5,232, or approximately $0.00 per share of
common stock. After giving effect to the sale of 30,000,000 shares of
common stock included in the units (but excluding shares underlying the warrants
included in the units) in this offering and from the private placement, the
deduction of underwriting discounts and commissions and estimated expenses
of
this offering and after giving effect to a 6 for 5 stock split of our common
stock, our pro forma net tangible book value (as decreased by the value of
8,999,999 shares of common stock which may be converted into cash and the
potential forfeiture of 1,125,000 shares to the extent the underwriters’
over-allotment option is not exercised) as of July 13, 2007 would have been
$200,439,691 or approximately $7.03 per share, representing an immediate
increase in net tangible book value of approximately $7.03 per share to our
existing stockholders and an immediate decrease in net tangible book value
of
approximately $2.97 per share or approximately 29.7% to new investors not
exercising their conversion rights.
The
following table illustrates the dilution to the new investors on a per share
basis, assuming no value is attributed to the warrants included in the
units:
Initial
public offering price
$
10.00
Net
tangible book value (deficit) before this offering and the private
placement
$
0.00
Increase
attributable to new investors in this offering and the private
placement
7.03
Pro
forma net tangible book value after this offering and the private
placement
$
7.03
Dilution
to new investors
$
2.97
For
purposes of presentation, our pro forma net tangible book value after this
offering has been reduced by $85,785,167 because, if we consummate an initial
business combination, the conversion rights of our public stockholders, other
than our executive officers, directors and existing stockholders may result
in
the conversion into cash of up to 8,999,999 shares of the 30,000,000 shares
included in the units sold in this offering, at a per share conversion price
equal to the amount in the trust account (including the amount representing
the
deferred portion of the underwriting discounts and commissions) calculated
as of
two business days prior to the consummation of the proposed business
combination, inclusive of any interest income (net of taxes payable on such
interest income and after release of up to $2,250,000 of interest income,
after
tax, to fund working capital) divided by the number of shares sold in this
offering. In addition, our pro forma net tangible book value after
this offering has been reduced by $9,000,000, representing the deferred
underwriting discounts and commissions payable on consummation of an initial
business combination.
50
The
pro
forma net tangible book value per share after this offering and the private
placement is calculated as follows:
Numerator:
Net
tangible book value before this offering and the private
placement
$
5,232
Offering
costs incurred in advance and excluded from net tangible book
value
19,037
Net
Proceeds from this offering and the private placement including deferred
underwriting costs
295,200,589
Less: Deferred
underwriting costs excluded from net tangible book value before this
offering and the private placement(1)
(9,000,000
)
Less:
Proceeds held in the trust account subject to conversion to
cash
(85,785,167
)
Total
net tangible book value after this offering and the private
placement
$
200,439,691
Denominator:
Shares
of common stock outstanding prior to this offering and the private
placement(2)
7,500,000
Shares
of common stock included in the units offered in this offering and
the
private placement
30,000,000
Less:
Shares subject to conversion(3)
(8,999,999
)
Total
shares of common stock
28,500,001
(1)
The
deferred underwriting discounts and commissions are subject to a
$0.30 per
share reduction for stockholders who exercise their conversion
rights.
(2)
Does
not include 1,125,000 shares sold to our sponsor that are subject
to
forfeiture to the extent the underwriters do not exercise their
over-allotment option.
(3)
This
table notes that we may be required to convert up to a maximum of
8,999,999 shares to cash in connection with our initial business
combination.
The
following table sets forth information with respect to our existing stockholders
and the public stockholders after giving effect to a 6 for 5 stock split of
our
common stock:
Shares
Purchased
Total
Consideration (1)
Average
Price Per Share
Number
Percentage
Amount
Percentage
Existing
stockholders(2)
7,500,000
20
%
$
25,000
0.01
%
$
0.003
Public
Stockholders
30,000,000
80
%
300,000,000
99.99
%
$
10.000
Total
37,500,000
100
%
$
300,025,000
100.00
%
(1)
Total
consideration includes consideration paid for warrants as well as
shares
of common stock, included in the units issued in the
offering.
(2)
Does
not include 1,125,000 shares sold to our sponsor that are subject
to
forfeiture to the extent the underwriters do not exercise their
over-allotment option.
51
DIVIDEND
POLICY
We
have
not paid any dividends on our common stock to date. Prior to
consummating an initial business combination, which is subject to approval
by
our public stockholders, substantially all of our earnings will consist
of
interest accrued on funds in the trust account that are required to be
maintained therein until consummation of an initial business combination
or our
liquidation, except as set forth in the next sentence. There can be
released to us from the trust account (i) interest income earned on the
trust
account balance to pay any income taxes on such interest and (ii) interest
income earned, after tax, on the trust account of up to $2,250,000 to fund
our
working capital requirements, including, in such an event, the costs of
our
liquidation. Subsequent to our initial business combination, our
board of directors intends to retain all earnings, if any, for use in our
business operations. Accordingly, our board of directors does not
anticipate declaring any dividends in the foreseeable future. The
payment of dividends, if any, after an initial business combination, will
be
contingent upon our revenues and earnings, if any, capital requirements,
and
general financial condition and will be within the discretion of our then
board
of directors.
52
MANAGEMENT’S
DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We
were
formed on July 10, 2007, as a blank check company for the purpose of acquiring,
through a merger, capital stock exchange, stock purchase, asset acquisition
or
other similar business combination, one or more operating
businesses. We do not have any specific merger, capital stock
exchange, stock purchase, asset acquisition or other similar business
combination under consideration and neither we, nor any representative acting
on
our behalf, has had any contacts or discussions with any prospective target
business with respect to such a transaction or taken any direct or indirect
measures to locate a specific target business or consummate an initial business
combination. We intend to use cash derived from the proceeds of this
offering, our capital stock, debt, or a combination of cash, capital stock,
and
debt, to consummate an initial business combination.
The
issuance of additional capital stock or the incurrence of debt, could have
material consequences on our business and financial condition. The
issuance of additional shares of our capital stock (including, upon conversion,
of convertible debt securities):
•
may
significantly reduce the equity interest of our
stockholders;
•
will
likely cause a change in control if a substantial number of our shares
of
common stock or voting preferred stock are issued which may affect,
among
other things, our ability to use our net operating loss carry forwards,
if
any, and also may result in the resignation or removal of one or
more of
our current executive officers and
directors;
•
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
have the effect of delaying or preventing a change of control of
us by
diluting the stock ownership or voting rights of a person seeking
to
obtain control of us; and
•
may
adversely affect prevailing market prices for our common
stock.
Similarly,
our incurrence of debt may:
•
lead
to default and foreclosure on our assets if our operating revenues
after a
business combination are insufficient to pay our debt
obligations;
•
cause
an acceleration of our obligations to repay the debt, even if we
make all
principal and interest payments when due, if we breach the covenants
contained in the terms of the debt documents, such as covenants that
require the maintenance of certain financial ratios, without a waiver
or
renegotiation of such covenants;
•
create
an obligation to repay immediately all principal and accrued interest,
if
any, upon demand to the extent any debt securities are payable on
demand;
and
•
hinder
our ability to obtain additional financing, if necessary, to the
extent
any debt securities contain covenants restricting our ability to
obtain
additional financing while such security is outstanding, or to the
extent
our existing leverage discourages other potential
investors.
To
date,
our efforts have been limited to organizational activities. We have
neither engaged in any operations nor generated any revenues to
date.
We
estimate that the net proceeds from the sale of the units in this offering
and
the sale of warrants in the private placement will be $286,200,589 (or
$328,050,589 if the underwriters’ over-allotment option is
53
exercised
in full), after deducting offering expenses of approximately $800,000 and
underwriting discounts and commissions of approximately $21,000,000 (or
$24,150,000 if the underwriters’ over-allotment option is exercised in
full). As a result of the deferral of underwriting discounts and
commissions of $9,000,000 (or $10,350,000 if the underwriters’ over-allotment
option is exercised in full), $294,950,589 (or $338,150,589 if the underwriters’
over-allotment option is exercised in full) will be held in the trust account
and $250,000 will not be held in the trust account and will be used by us as
working capital. If we consummate an initial business combination, we
will use $9,000,000 (or $10,350,000 if the underwriters’ over-allotment option
is exercised in full) of the net proceeds held in the trust account to pay
the
deferred underwriting discounts and commissions (subject to a $0.30 per share
reduction for public stockholders who exercise their conversion
rights). We expect to use the remaining net proceeds of this offering
and the private placement in the trust account, after the payment of deferred
underwriting discounts and commissions, to acquire one or more operating
businesses. However, we may not use all of the proceeds in the trust
account in connection with an initial business combination, either because
the
consideration for the initial business combination is less than the proceeds
in
a trust account or because we finance a portion of the consideration with our
capital stock or debt securities. In that event, the proceeds held in
the trust account as well as any other net proceeds of this offering not
expended will be used to finance the operations of the combined business or
businesses.
We
expect
to use $250,000 of the proceeds not held in the trust account and interest
earned on the trust account of up to $2,250,000, after tax, to fund our working
capital requirements pending a business combination, including identifying
and
evaluating prospective target businesses, selecting one or more operating
businesses, and structuring, negotiating and consummating the initial business
combination. We believe that, upon the completion of this offering,
the funds available to us outside of the trust account will be sufficient to
allow us to operate for at least the next 24 months, assuming that an initial
business combination is not consummated during that time. We
anticipate that, even at an interest rate of 3.0% per annum, the interest that
will accrue on the trust account during the time it will take to identify a
target and complete an acquisition will be sufficient, together with the
$250,000 held outside the trust, to fund our working capital requirements.
Given
the limited amount of time it will take to generate $2,250,000 of interest
on
the trust account, we anticipate receiving such interest income shortly after
we
incur working capital expenses. Over this time period, we anticipate
making the following expenditures:
•
approximately
$800,000 of expenses for legal and accounting fees relating to the
structuring and negotiating of our initial business
combination;
•
approximately
$800,000 of expenses and fees relating to the due diligence investigation
of potential target businesses;
•
approximately
$50,000 of expenses in legal and accounting fees relating to our
SEC
reporting obligations;
•
approximately
$180,000 of expenses in fees relating to our office space and certain
general and administrative
expenses;
•
approximately
$300,000 for director and officer
insurance;
•
approximately
$120,000 for corporate franchise taxes;
and
•
approximately
$250,000 for general working capital that will be used for other
expenses,
including costs and expenses associated with our liquidation (which
we
estimate will be in the range of $15,000 to $25,000), if necessary,
and
reserves.
We
do not
anticipate that we will need additional financing following this offering in
order to meet the expenditures required for operating our business pending
an
initial business combination. However, we may need to obtain
additional financing to the extent such financing is required to consummate
an
initial business
54
combination,
in which case we may issue additional securities or incur debt in connection
with such business combination.
On
July
13, 2007 our sponsor made us an interest-free loan of $200,000 for payment
of
offering expenses. The loan will be repaid out of the proceeds of
this offering.
55
PROPOSED
BUSINESS
Overview
We
are a
recently organized blank check company formed for the purpose of acquiring,
through a merger, capital stock exchange, stock purchase, asset acquisition
or
other similar business combination, one or more assets or control of one or
more
operating businesses, which we refer to as our “initial business
combination.” Our efforts in identifying a prospective acquisition
target will not be limited to a particular industry or geographic
location. We intend to initially focus our search on businesses in
the United States, but will also explore opportunities
internationally. We do not have any initial business combination
under consideration or contemplation. To date, our efforts have been
limited to organizational activities as well as activities related to this
offering. We have not, nor has anyone on our behalf, contacted or
been contacted by, any potential acquisition target or had any discussions,
formal or otherwise, with respect to such a transaction.
We
expect
to evaluate target businesses in various industries that may provide significant
opportunities for growth and value creation. Although the nature and
scope of the ultimate roles of our executive officers after an initial business
combination will depend upon the structure of the business combination we
consummate, the employment arrangements they negotiate and the skills and depth
of our target business’ management team, we expect that our executive officers
will continue to be actively involved in our business after the consummation
of
an initial business combination.
Given
our
management team’s expertise in the real estate sector, we will initially focus
our search for an initial business combination on operating businesses
where we
believe we can increase the value of the overall enterprise by altering
the
structure of or relationship between the operating business and its real
estate
and/or improving, expanding or repositioning the real estate underlying
the
operating business. We believe we can benefit from the expertise of
the members of our management team in investing in and managing operating
companies and that their skills in valuation, financial structuring, due
diligence, governance and financial and management oversight will be valuable
in
our efforts to identify a business target.
We
intend
to use some or all of the following criteria to evaluate acquisition
opportunities. However, we may enter into a business combination with
a target business that does not meet any or all of these criteria if we
believe
such target business has the potential to create significant shareholder
value.
•
An
Established Business with a Proven Operating Track
Record. We will seek established businesses with records
of strong financial performance and sound operating results,
or ones which
our management team believes have the potential for positive
operating
cash flow. It is not our intention to acquire a start-up
company.
•
Strong
Industry Position. We will seek to acquire strong
competitors in industries with appealing prospects for future
growth and
profitability. We will examine the ability of these target businesses
to
defend and improve their advantages in areas such as customer
base,
branding, intellectual property, vendor relationships, working
capital and
capital investments.
•
Experienced
Management Team. We will concentrate on target businesses
with an experienced management team that has created an effective
corporate culture and utilized best business practices in areas
such as
customer service, vendor relationships, recruiting and
retention.
•
Ability
For Us To Add Value. We will seek a target company where
our management team has identified opportunities to improve the
operating
business through the implementation of marketing, operational,
growth and
management strategies to augment the company’s existing
capabilities.
56
•
Underlying
Real Estate Value. Given the inherent skills and
experience of our management team, we will focus initially on
operating
businesses where we have the opportunity to create value from
the real
estate underlying the
business.
These
factors are not intended to be exhaustive. Any evaluation of a
particular business combination will be based, to the extent relevant, on the
above factors as well as other considerations deemed relevant by our executive
officers and directors. In evaluating a prospective target business,
we expect to conduct an extensive due diligence review which will encompass,
among other things, meetings with incumbent management and employees, document
reviews, interviews of customers and suppliers, inspection of facilities, as
well as review of financial and other information.
Competitive
Advantages
We
believe that we have several competitive advantages over other entities with
similar business objectives.
Experienced
Executive Management Team
Our
executive officers are William Mack, Robert Baker, Richard Baker and Lee
Neibart. William Mack and Lee Neibart are also Senior Partners of
Apollo Real Estate Advisors. Robert Baker and Richard Baker are also
the principals of National Realty & Development Corporation. All
four of our executive officers together founded and own NRDC Real Estate
Advisors, LLC, a private equity company that acquires businesses in the retail,
luxury brand, lodging, leisure, and real estate industries. Our
sponsor, NRDC Capital Management, LLC, is an affiliate of NRDC Real Estate
Advisors, LLC. Our four executive officers have over 30 years
experience acquiring, building, operating, selling and advising public and
private companies.
William
L. Mack– Chairman. Mr. Mack is a founder of
NRDC Real Estate Advisors, LLC and NRDC Equity Partners. He is also a
founder and Senior Partner of Apollo Real Estate Advisors since its inception
in
1993 and the President of the corporate general partners of the Apollo real
estate funds. Since 1993, Apollo has overseen the investment of 16
real estate funds and numerous joint ventures, through which it has invested
over $7 billion in more than 350 transactions. The Apollo real estate
funds target a broad range of opportunistic, value-added and debt investments
in
real estate assets and portfolios throughout the United States, Europe and
Japan. Mr. Mack is also a Senior Partner of the Mack Organization, a
national owner of industrial buildings and other income-producing real estate
investments. Mr. Mack serves as non-executive Chairman of the Board
of Directors of Mack-Cali Realty Corporation, a publicly traded real estate
investment trust. He has been a Director of Mack-Cali since the 1997
merger of the Mack Organization’s office portfolio into Mack-Cali.
Robert
C. Baker–Vice-Chairman. Mr. Baker is
a founder of NRDC Real Estate Advisors, LLC and NRDC Equity
Partners. He also has been the Chairman and CEO of National Realty
& Development Corporation since its founding in 1978. National
Realty & Development Corporation owns and manages a real estate portfolio in
excess of 18 million square feet, which includes shopping centers, corporate
business centers and residential communities in 20 states. The
company’s tenants include prominent retailers such as Wal-Mart, Kohl’s, Lowe’s,
Toys ‘R Us, The Home Depot, Sears, Staples, Supervalu, and T.J. Maxx among
others. National Realty & Development Corporation remains one of
the largest privately owned development companies in the United
States. Mr. Baker has over 46 years experience in real estate
acquisition, construction, financing and management. Robert Baker is
the father of Richard Baker, our Chief Executive Officer.
Richard
A. Baker –Chief Executive Officer. Mr. Richard
A. Baker is a founder and President and Chief Executive Officer of NRDC Real
Estate Advisors, LLC and NRDC Equity Partners. Mr. Baker is also
Vice-Chairman of National Realty & Development Corporation, a real estate
development company owned by him and Robert C. Baker. Richard Baker
is Chairman of Lord & Taylor Holdings, LLC, and a director of the
57
Hudson’s
Bay Company and Brunswick
School. Richard Baker is the son of Robert Baker, our
Vice-Chairman.
Lee
Neibart – President. Mr. Neibart is a founder
of NRDC Real Estate Advisors, LLC and NRDC Equity Partners. He is
also a Senior Partner of Apollo Real Estate Advisors, where he has been employed
since 1993. Mr. Neibart oversees the global day to day activities of
Apollo Real Estate Advisors including portfolio company and fund management,
strategic planning and new business development. From 1989 to 1993,
Mr. Neibart worked at the Robert Martin Company, a real estate development
and
management firm. Mr. Neibart is a director of Linens ‘N Things as
well as a director on various boards relating to Apollo’s investment
portfolio.
NRDC’s
investments include Lord & Taylor Holdings, LLC, a specialty department
store acquired in October 2006 for approximately $1.2 billion. In
connection with the acquisition of Lord & Taylor, NRDC created separate real
property and operating companies, which lowered financing costs and increased
the value of the entire enterprise. In partnership with Apollo
Management L.P., NRDC purchased Linens ‘N Things Inc., a home goods specialty
chain, in February 2006 for approximately $1.3 billion. NRDC
estimated that the standalone value of Linens ‘N Things’ real estate presented
an alternative exit strategy, mitigating the risk of its turnaround plan
for the
operating business. In July of 2007 Mr. Mack, and Messrs. Richard and
Robert Baker sold City & Suburban Federal Savings Bank to Ridgewood Savings
Bank. City & Suburban Federal Savings Bank was a New York
metropolitan area community bank that they had acquired in
1990.
Assistance
from Senior Managers of NRDC and Apollo Real Estate
Advisors
In
addition to Messrs. Mack, Neibart, Robert Baker and Richard Baker, our executive
officers and directors, the following senior managers of NRDC and Apollo Real
Estate Advisors, as applicable, will be involved in helping us to source,
analyze and execute our initial business combination. None of these individuals
are required to commit any specified amount of time to our
affairs. Our sponsor and its affiliates and Apollo Real Estate
Advisors have agreed to make these individuals available at no cost to
us. Pursuant to this agreement, supporting us is part of the
employment duties of such individuals to our sponsor and their affiliates and
Apollo Real Estate Advisors.
Francis
Casale. As a Managing Partner of NRDC Equity Partners
since 2005, Mr. Casale is responsible for the identification, evaluation,
acquisition, and ongoing management of the NRDC investment
portfolio. Before joining NRDC Equity Partners, Mr. Casale was the
Managing Director of Private Equity at S.A.C. Capital Advisors, LLC from 1997
until 2002. There he was responsible for the research, analysis,
negotiation, transaction execution and stewardship of more than 20 operating
company investments domestically and abroad. From 1993 until 1997,
Mr. Casale was a portfolio manager at Axe-Houghton Associates, Inc., a $4
billion investment management company, where he focused on investing in
undervalued businesses in all capitalization ranges. He advises the
boards and managers of all of the portfolio companies of NRDC Equity
Partners. Mr. Casale is the corporate secretary of NRDC Capital
Management, LLC. He is a member of the board of directors of
Intraprise Solutions Inc. and a Managing Partner of Quotient Partners,
LLC. Mr. Casale received his MBA from the Olin School at Babson
College and his BA from the College of the Holy Cross.
Brian
Pall. As a Managing Partner of NRDC Real Estate
Advisors, LLC since 2005, Mr. Pall is responsible for analyzing potential
acquisitions from a real estate perspective and strategic planning for the
real
estate portfolios underlying NRDC operating companies. Mr. Pall
joined NRDC Real Estate Advisors, LLC after 17 years with The Great Atlantic
& Pacific Tea Co., Inc., or A&P, where he most recently served as Senior
Vice President and Chief Development Officer and served on the Management
Executive Committee. He was responsible for all real estate
activities of A&P, including store development, design, construction,
location research, equipment procurement, real estate law, property disposition
and store/shopping center leasing. Mr. Pall is a director of Linens
‘N Things Inc. Mr. Pall received his Law Degree from Brooklyn Law
School and a BS in Business and Economics from the State University of New
York
at Oswego.
58
Donald
Watros.Prior to joining NRDC as a Managing Director
in 2006, Mr. Watros spent 18 years in the retail industry. He is
responsible for analyzing the retail operations of potential
acquisitions. He started his career with The May Department Stores
Company and held various financial positions. Most recently, he
served as Chief Administrative Officer for Saks Fifth Avenue. In this
role he was responsible for finance, planning, information technology, logistics
and the outlet division. Mr. Watros received his MBA from Binghamton
University and his BS from Cornell University.
Brian
M. Earle. Mr. Earle is a Partner at Apollo Real Estate
Advisors and is responsible for new investments and investment
management. From 1996 to 2000, Mr. Earle was Vice President of
Charlesbank Capital Partners/Harvard Private Capital Group making investments
on
behalf of the Harvard University Endowment. From 1993 to 1996, Mr.
Earle was an associate at Copley Real Estate Advisors on the Developmental
Properties Account. Mr. Earle graduated with a BS in Business
Administration, concentrating in finance, from Boston University.
Established
Deal Sourcing Network
We
believe that the extensive contacts and relationships of our executive officers
and directors who average more than 30 years of experience finding and executing
business, investment and acquisition transactions will enable us to source,
evaluate and execute initial business combination opportunities
successfully. Our executive officers and directors have strong
reputations in the marketplace and long-term relationships with senior
executives and decision-makers. We believe that these relationships
with executives employed with, and consultants engaged by, public and private
businesses in potential target industries, and with other boards in which our
executive officers and directors participate, will provide us with an important
advantage in sourcing and structuring potential business
combinations. Additionally, our executive officers and directors have
extensive contacts with consultants, investment bankers, attorneys, and
accountants, among others. While the past successes of our executive
officers and directors do not guarantee that we will successfully identify
and
consummate an initial business combination, they will play an important role
in
assisting us in finding potential targets and negotiating an agreement for
our
initial business combination.
Right
of First Offer
We
have
entered into a business opportunity right of first offer agreement with
our
sponsor, NRDC Real Estate Advisors, LLC and NRDC Equity Partners and with
our
executive officers and directors. This right of first offer provides
that from the date of this prospectus until the earlier of the consummation
of
our initial business combination or our liquidation, we will have a right
of
first offer if any of these parties becomes aware of, or involved with,
a
business combination opportunity with any operating business. Subject
to their respective pre-existing fiduciary obligations, these parties to
the
right of first offer agreement will, and will cause companies or entities
under
their management or control, to first offer any such business opportunity
to us
and they will not, and will cause each other company or entity under their
management or control not, to pursue any such business opportunity unless
and
until our board of directors, including a majority of our disinterested
independent directors, has determined that we will not pursue such
opportunity.
We
recognize that each of our executive officers and directors may be deemed
an
affiliate of any company for which such executive officer or director serves
as
an officer or director or for which such executive officer or director
otherwise
has a pre-existing fiduciary duty and that a conflict of interest could
arise if
an opportunity is appropriate for one of such companies. As part of
this right of first offer, we have established procedures with respect
to the
sourcing of a potential business combination by our executive officers
and
directors to eliminate such conflict for our executive officers and directors,
whereby a potential business combination that must be presented to
any company for which such executive officer or director, as the case may
be, serves as an officer or director or otherwise has a pre-existing fiduciary
duty (other than our sponsor, NRDC Real Estate Advisors, LLC and NRDC Equity
Partners) will not be presented to us until after such executive officer
or
director has presented the opportunity to such company and such company
has
determined not to proceed.
59
Consummating
an Initial Business Combination
General
We
intend
to utilize the net proceeds after expenses of this offering and private
placement as well as the co-investment, our capital stock, debt, or a
combination of these as the consideration to be paid in an initial business
combination. While substantially all of the net proceeds after
expenses of this offering are allocated to consummating an initial business
combination, the proceeds are not otherwise designated for more specific
purposes. Accordingly, prospective investors will not, at the time of
their investment in us, be provided an opportunity to evaluate the specific
merits or risks of one or more target businesses. If we consummate an
initial business combination with a target business using our capital stock
and/or debt financing as the consideration to fund the initial business
combination, proceeds from this offering then will be used to undertake
additional acquisitions or to fund the operations of the combined
business. We may enter into a business combination with an operating
business that does not require significant additional capital but is seeking
a
public trading market for its shares and which wants to merge with a company
that already is public in order to avoid the uncertainties associated with
undertaking its own initial public offering. These uncertainties may
include time delays, compliance and governance issues, significant expense,
and
the risk that market conditions will not be favorable for an offering at the
time the offering is ready to be sold. Alternatively, we may seek to
consummate an initial business combination with an operating business that
is
financially unstable or in the development stage. We may seek to
consummate an initial business combination with more than one target business,
although our limited resources may serve as a practical limitation on our
ability to do so.
Prior
to
consummation of an initial business combination we will seek to have all
vendors, providers of financing, if any, prospective target businesses, or
other
entities, execute agreements with us waiving any right, title, interest, or
claim of any kind in or to any monies held in the trust account for the benefit
of our public stockholders. However, we are not obligated to obtain a
waiver from any potential vendor, creditor target business or other
entity. In the event that a potential contracted party were to refuse
to execute such a waiver, we will execute an agreement with that entity only
if
our executive officers and directors first determine 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
possible instances where we may engage a third party that refuses to execute
a
waiver include the engagement of a third-party consultant whose particular
expertise or skills are believed by the executive officers and directors to
be
significantly superior to those of other consultants that would agree to execute
a waiver or a situation in which our executive officers and directors are unable
to find a provider of required services willing to provide the
waiver. We will seek to secure waivers that we believe are valid and
enforceable, but it is possible that a waiver may later be found to be invalid
or unenforceable. Our sponsor and our executive officers have agreed,
on a joint and several basis, to reimburse us for our debts to any vendor for
services rendered or products sold to us, to a potential target business or
to
providers of financing, if any, in each case only to the extent necessary to
ensure that the amounts in the trust account are not reduced by claims made
by
such party to the extent that the payment of such debts or obligations actually
reduces the amount in the trust account payable to our public stockholders
in
the event of our liquidation. The warrant agreement under which our
sponsor has agreed to purchase warrants in the private placement includes an
irrevocable waiver to any right, title, interest, or claim of any kind to monies
held in the trust account.
None
of
our executive officers, directors, promoters, or other affiliates or any
representatives acting on our behalf has had any contact or discussions with
any
prospective target business regarding an initial business combination or has
taken any direct or indirect measures to locate a specific target business
or
consummate an initial business combination.
Subject
to the requirement that our initial business combination must be with an
operating business whose fair market value is at least equal to 80% of the
balance in the trust account (less the deferred underwriting discounts and
commissions and taxes payable) at the time of such business combination,
we
have
60
virtually
unrestricted flexibility in identifying and selecting one or more prospective
target businesses. Accordingly, there is no current basis for
investors in this offering to evaluate the possible merits or risks of any
target business with which we may ultimately consummate an initial business
combination. If we combine with a financially unstable business or an
entity in the development stage, including an entity lacking an established
record of sales or earnings, we may be affected by numerous risks inherent
in
the business and operations of a financially unstable or development stage
entity. Although our executive officers and directors will endeavor
to assess the risks inherent in a particular target business with which we
may
combine, we cannot assure you that this assessment will result in our
identifying all risks that a target business may
encounter. Furthermore, some of those risks may be outside of our
control, meaning that we can do nothing to control or reduce the chances that
those risks will adversely impact a target business.
We
cannot
assure you that we will identify, secure a definitive agreement with, or
consummate an initial business combination with one or more target
businesses. In addition, no financing arrangements have been entered
into or are contemplated with any third parties to raise any additional funds,
whether through the sale of securities or otherwise, that we may need if we
decide to consummate our initial business combination for consideration in
excess of our available assets at the time of the business
combination.
Sources
of Targets
We
may
identify a target business through our executive officers’ and directors’
current and previous business contacts or through our public relations and
marketing efforts. Our executive officers and directors have long
standing business relationships, have seats on the boards of various companies
and are involved in several charitable organizations and industry associations
in their respective fields. Our executive officers and directors have
on average, over 30 years of professional experience. This breadth of
experience, and tenure, may be a valuable basis with which to source business
targets.
In
addition to utilizing our experience and relationships within our executive
officers and directors we anticipate that target businesses may also be brought
to our attention from various unaffiliated parties such as brokers, private
equity and venture capital firms, consultants, investment bankers, attorneys,
and accountants, among other sources.
Our
executive officers have committed to spending a significant portion of their
time on our business but are not required to devote any specific amount of
time
to our affairs. Our directors have no commitment to spend a specified
amount of time in identifying or performing due diligence on potential target
businesses. Our executive officers and directors believe that the
relationships they have developed over their careers, in combination with the
possible sources discussed above, will generate a number of potential target
businesses that will warrant further investigation.
We
may
pay fees or compensation to third parties for their efforts in introducing
us to
potential target businesses. Such payments are typically, although
not always, calculated as a percentage of the dollar value of the
transaction. We have not anticipated use of a particular percentage
fee, but instead will seek to negotiate the smallest reasonable percentage
fee
consistent with the attractiveness of the opportunity and the alternatives,
if
any, that are then available to us. We may make such payments to
entities we engage for this purpose or entities that approach us on an
unsolicited basis. Payment of finders’ fees is customarily tied to
completion of a transaction and certainly would be tied to a completed
transaction in the case of an unsolicited proposal. Although it is
possible that we may pay finders’ fees in the case of an uncompleted
transaction, we consider this possibility to be remote. In no event
will we pay our sponsor or any of our executive officers, directors, or existing
stockholders or any entity with which they are affiliated any finder’s fee or
other compensation for services rendered to us prior to or in connection with
the consummation of an initial business combination. In addition,
neither our sponsor or any of our executive officers, directors, or existing
stockholders will receive any finder’s fee, consulting fees, or any similar fees
from any person or entity prior to or in connection with any business
combination involving us other than any compensation or fees that may be
received for any services provided following such business
combination.
61
Selection
of a Target and Structuring of an Initial Business
Combination
Subject
to the requirement that our initial business combination must be with one or
more operating businesses whose fair market value is at least equal to 80%
of
the balance in the trust account (less the deferred underwriting discounts
and
commissions and taxes payable) at the time of such business combination, our
executive officers and directors will have virtually unrestricted flexibility
in
identifying and selecting a prospective target business.
Consistent
with our objectives, we will endeavor to structure an initial business
combination so as to achieve the most favorable tax treatment to us and our
stockholders, while also taking into consideration that favorable tax treatment
to the target businesses and their stockholders could enable us to negotiate
a
lower purchase price or preserve our cash. We cannot assure you,
however, that the Internal Revenue Service or appropriate state or local tax
authorities will agree with our tax treatment of the initial business
combination.
The
time
required to select and evaluate a target business and to structure and
consummate the initial business combination, and the costs associated with
this
process, are not currently ascertainable with any degree of
certainty. Any costs incurred with respect to the identification and
evaluation of a prospective target business with which an initial business
combination is not ultimately consummated will result in our incurring losses
and will reduce the funds we can use to consummate another business
combination. We will not pay any finders or consulting fees to our
existing stockholders, or any of their respective affiliates, for services
rendered to or in connection with an initial business combination.
Fair
Market Value of Target Business or Businesses
ur
initial business combination must be with one or more operating businesses,
or
the portion of such business or businesses that we acquire, having a fair market
value that is at least equal to 80% of the balance in the trust account (less
the deferred underwriting discounts and commissions and taxes payable) at the
time of such business combination. As a result, we expect that an
initial public offering of $300,000,000 will enable us to consummate an initial
business combination with an operating business with a fair market value of
at
least $228,760,471. The actual amount of the consideration which we
will be able to pay for the initial business combination will depend on whether
we choose, or are able, to pay a portion of the initial business combination
consideration with shares of our common stock or if we are able to finance
a
portion of the consideration with debt financing. If we choose to
acquire all or part of a target business through a share for share exchange
or
to finance a portion of the initial business combination consideration by
issuing additional shares of our common stock, such additional equity may be
issued at a price below the then current trading price for shares of our common
stock, resulting in dilution of the equity interest of our then current public
stockholders. No financing arrangements have been entered into or are
contemplated with any third parties to raise any additional funds, whether
through the sale of securities or otherwise, that we may need to consummate
an
initial business combination for consideration in excess of our available assets
at the time of such business combination.
In
contrast to many other companies with business plans similar to ours where
the
minimum fair market value of the target businesses for the initial business
combination is based on 80% of the acquiror’s net assets, our minimum fair
market value is based on 80% of the balance in the trust account (less the
deferred underwriting discounts and commissions and taxes payable) at the time
of such business combination. We have used this criterion to provide
investors and our management team with greater certainty as to the fair market
value that a target business or businesses must have in order to qualify for
a
business combination with us. The determination of net assets
requires an acquiror to have deducted all liabilities from total assets to
arrive at the balance of net assets. Given the on-going nature of
legal, accounting, stockholder meeting and other expenses that will be incurred
immediately before and at the time of a business combination, the balance of
an
acquiror’s total liabilities may be difficult to ascertain at a particular point
in time with a high degree of certainty. Accordingly, we have
determined to use the valuation threshold of 80% of the amount in the trust
account (less deferred underwriting discounts and commissions and taxes payable)
for the minimum fair
62
market
value of the target business or businesses with which we combine so that our
management team will have greater certainty when selecting, and our investors
will have greater certainty when voting to approve or disapprove a proposed
combination with, a target business or businesses that will meet the minimum
valuation criterion for our initial business combination.
The
fair
market value of a target business or businesses will be determined by our board
of directors based upon standards generally accepted by the financial community,
such as actual and potential sales, the values of comparable businesses,
earnings and cash flow, and book value. Our executive officers and
directors will consult with and engage such experts as they deem necessary
and
useful to evaluate the fair market value of the target business. Our
board of directors will determine the fair market value of a target business
or
businesses and whether a proposed business combination is in the best interests
of the stockholders and, in making that determination, will do so in accordance
with the requirements of the Delaware General Corporation Law and consistent
with their fiduciary obligations in the context of a business
combination. We will not be required to obtain an opinion from an
investment banking firm as to the fair market value of the target if our board
of directors independently determines that the target meets the threshold
criterion unless one of our executive officers, directors or existing
stockholders is affiliated with the target business. If our board of
directors is not able to independently determine that the target business has
a
sufficient fair market value to meet the threshold criteria, we will obtain
an
opinion from an unaffiliated, independent third party appraiser or investment
banking firm that may or may not be a member of the National Association of
Securities Dealers, with respect to the satisfaction of such
criteria. Because any opinion, if obtained, would merely state that
fair market value meets the threshold of 80% of the amount in the trust account
(excluding deferred underwriting discounts and commissions and taxes payable)
at
the time of such acquisition, it is not anticipated that copies of such opinion
would be distributed to our stockholders, although copies will be provided
to
stockholders who request it. In addition, we will provide our
stockholders with the information that is required in accordance with Delaware
General Corporate Law and the SEC’s proxy rules, including our board of
director’s assessment of the fair market value of the target
business.
Lack
of Business Diversification
Our
initial business combination must be with one or more target businesses whose
fair market value is at least equal to 80% of the balance in the trust account
(less the deferred underwriting discounts and commissions and taxes payable)
at
the time of such acquisition. We expect to consummate only a single
business combination, although to satisfy the 80% test, we may need to
consummate a simultaneous combination with more than one operating businesses
at
the same time. At the time of our initial business combination, we
may not be able to acquire more than one target business because of various
factors, including complex accounting or financial reporting
issues. For example, in the proxy solicitation materials we
distribute to our stockholders in connection with our initial business
combination, we may need to present pro forma financial statements reflecting
the operations of several target businesses as if they had been combined
historically. Consummating our initial business combination through
more than one acquisition would likely result in increased costs as we would
be
required to conduct a due diligence investigation of more than one business
and
negotiate the terms of the acquisition with multiple sellers. A
simultaneous combination with several target businesses also presents logistical
issues such as the need to coordinate the timing of negotiations, proxy
statement disclosure and closings. Our attempt to consummate our
initial business combination in this manner would increase the chance that
we
would be unable to successfully consummate our initial business combination
in a
timely manner. In addition, if conditions to closings with respect to
one or more of the target businesses are not satisfied, the fair market value
of
the business could fall below the required fair market value threshold of 80%
of
the balance in the trust account (less the deferred underwriting discounts
and
commissions and net of taxes payable). Furthermore, the success of a
business formed through the combination of smaller businesses will depend on
our
ability to integrate disparate organizations and achieve expected
synergies. See “Risk Factors—Risks Relating to the Company and the
Offering—Any attempt to consummate more than one transaction as our initial
business combination will make it more difficult to consummate our initial
business combination.”
63
Accordingly,
while it is possible that we may attempt to consummate our initial business
combination with more than one target business, we are more likely to choose
a
single target business if all other factors appear equal. This means
that for an indefinite period of time, the prospects for our success may depend
entirely on the future performance of a single business. Unlike other
entities that have the resources to consummate business combinations with
multiple entities in one or several industries, it is probable that we will
not
have the resources to diversify our operations and mitigate the risks of being
in a single line of business. By consummating a business combination
with only a single entity, our lack of diversification may:
•
subject
us to negative economic, competitive, and regulatory developments,
any or
all of which may have a substantial adverse impact on the particular
industry in which we operate after an initial business
combination;
•
cause
us to depend on the marketing and sale of a single service or product
or
limited number of services or products;
and
•
result
in our dependency upon the performance of a single operating
business.
If
we
consummate an initial business combination structured as a merger in which
the
consideration is our stock, we would have a significant amount of cash available
to make add-on acquisitions following our initial business
combination. See “Risk Factors—Risks Relating to the Company and the
Offering—We may only be able to consummate one business combination, which may
cause us to be solely dependent on a single business and a limited number of
services or products.”
Limited
Ability to Assess the Target’s Management
Although
we intend to closely scrutinize the management of a prospective target business
when evaluating the desirability of consummating our initial business
combination, we cannot assure you that our assessment of the target’s management
will prove to be correct. In addition, we cannot assure you that the
future management will have the necessary skills, qualifications, or abilities
to manage a public company. Furthermore, although our executive
officers’ current intention is to continue to be involved in the management of
the combined company after our initial business combination, the future role
of
our executive officers and directors, if any, in the target business cannot
presently be stated with any certainty. Moreover, our current
executive officers and directors will only be able to remain with us after
the
consummation of our initial business combination if they are able to negotiate
the same in connection with any such combination. While it is
possible that one or more of our directors will remain associated in some
capacity with us following our initial business combination, it is unlikely
that
any of them will devote their full efforts to our affairs subsequent to our
initial business combination. Moreover, we cannot assure you that our
executive officers and directors will have significant experience or knowledge
relating to the operations of the particular target business.
Following
our initial business combination, we may seek to recruit additional managers
to
supplement the incumbent management of the target business. We cannot
assure you that we will have the ability to recruit additional managers, or
that
additional managers will have the requisite skills, knowledge, or experience
necessary to enhance the incumbent management. Although the current
intention of our current executive officers is to remain actively involved
in
our business after consummation of our initial business combination, our
executive officers only will be able to remain with us if they are able to
negotiate mutually agreeable employment terms as a part of any such combination,
which terms would be disclosed to our stockholders in any proxy statement
relating to such transaction. If we acquired a target business in an
all-cash transaction, it would be more likely that the current members of
management would remain with us, if they chose to do so. If a
business combination were structured as a merger in which the owners of the
target business were to control us following an initial business combination,
it
may be less likely that our current executive officers and directors would
remain with us because control would rest with the owners of the target business
and not our current executive officers and directors unless otherwise negotiated
as part of the
64
transaction
in the acquisition agreement, employment agreements or other
arrangement. If our current executive officers and directors choose
to remain with us after our initial business combination, they will negotiate
the terms of the initial business combination as well as the terms of their
employment arrangements, and may have a conflict of interest in negotiating
the
terms of the initial business combination while, at the same time, negotiating
terms of their employment arrangements.
Stockholder
Approval of Our Initial Business Combination
Prior
to
the consummation of our initial business combination, we will submit the
proposed transaction to our stockholders for approval, even if the nature of
the
acquisition is such as would not ordinarily require stockholder approval under
Delaware law. Pursuant to our by-laws, holders of a majority of our
issued and outstanding shares of common stock who are entitled to vote, or
a
quorum, must vote on our initial business combination. Abstentions
are not considered to be voting “for” or “against” a transaction and will have
no effect on the outcome of the vote to approve our initial business
combination. The American Stock Exchange, or AMEX, recommends that
stockholders receive notice of any shareholder meeting a minimum of 20 days
prior to the meeting. Therefore, if shares of our common stock are
listed on AMEX, we will mail the notice at least 23 days prior to the meeting
date to allow time for mailing. If shares of our common stock are not
listed on AMEX, we will abide by our by-laws and Delaware law, which require
us
to provide at least ten days’ written notice, measured from the certification
date of the mailing, before the date of any shareholders meeting. We
will conduct any vote on our initial business combination, whether by a
shareholder meeting or written consent, in accordance with the SEC’s proxy rules
and the requirements of our amended and restated certificate of incorporation
and by-laws. In addition, even if our shareholders vote in favor of a
business combination, under the terms of our amended and restated certificate
of
incorporation, we will not consummate a business combination if public
stockholders owning 30% or more of the shares sold in this offering both vote
against the business combination and exercise their conversion
rights. See “—Conversion Rights”. If a majority of the
shares of common stock voted by the public stockholders are not voted in favor
of a proposed initial business combination, we may continue to seek other target
businesses with which to consummate our initial business combination that meet
the criteria set forth in this prospectus until the expiration of 24 months
from
completion of this offering. In connection with seeking stockholder
approval of an initial business combination, we will furnish our stockholders
with proxy solicitation materials prepared in accordance with the Securities
Exchange Act, which, among other matters, will include a description of the
operations of the target business and audited historical financial statements
of
the target business based on United States generally accepted accounting
principles.
In
connection with the vote required for any business combination, our executive
officers, directors and existing stockholders have agreed to vote the shares
of
common stock acquired by them prior to the completion of this offering, either
for or against an initial business combination in the same manner as the
majority of the shares of common stock are voted by our public
stockholders. Our existing stockholders have also agreed that they
will not be eligible to exercise conversion rights with respect to those
shares. In addition, our executive officers, directors and existing
stockholders have agreed that they will vote any shares they purchase in the
open market in or after this offering in favor of an initial business
combination. As a result, an officer, director or existing
stockholder who acquires shares in or after this offering must vote those shares
in favor of the proposed initial business combination with respect to those
shares, and will therefore not be eligible to exercise conversion rights for
those shares if our initial business combination is approved by a majority
of
our public stockholders. We will proceed with the initial business
combination only if (i) a majority of the shares of common stock voted by the
public stockholders are voted in favor of the initial business combination,
(ii)
public stockholders owning less than 30% of the shares sold in this offering
vote against the proposed business combination and exercise their conversion
rights and (iii) our stockholders approve an amendment to our amended and
restated certificate of incorporation to provide for our perpetual
existence. Voting against the initial business combination alone will
not result in conversion of a stockholder’s shares into a pro rata share of the
trust account. To do so, a stockholder must have also exercised the
conversion rights described below.
65
After
the
consummation of our initial business combination, unless required by Delaware
law, the federal securities laws, and the rules and regulations promulgated
thereunder, or the rules and regulations of an exchange upon which our
securities are listed, we do not presently intend to seek stockholder approval
for any subsequent acquisitions.
Conversion
Rights
At
the
time we seek stockholder approval of any business combination, we will offer
each public stockholder the right to have such stockholder’s shares of common
stock converted to cash if the stockholder votes against the initial business
combination and the initial business combination is approved and
consummated. The actual per share conversion price will be equal to
the aggregate amount then on deposit in the trust account, including accrued
interest income (net of taxes payable on such interest and after release of
up
to $2,250,000 of interest income, after tax, to fund working capital
requirements), as of two business days prior to the consummation of the initial
business combination, divided by the number of shares of common stock sold
in
this offering. The initial per share conversion price would be
approximately $9.83 before interest, or $0.17 less than the per-unit offering
price of $10.00.
An
eligible stockholder may request conversion at any time after the mailing
to our
stockholders of the proxy statement and prior to the vote taken with respect
to
a proposed business combination at a meeting held for that purpose, but
the
request will not be granted unless the stockholder votes against the initial
business combination and the initial business combination is approved and
consummated. In addition, no later than the business day immediately
preceding the vote on the business combination, the stockholder must present
written instructions to our transfer agent stating that the stockholder
wishes
to convert its shares into a pro rata share of the trust account and confirming
that the stockholder has held the shares since the record date and will
continue
to hold them through the stockholder meeting and the closing of our initial
business combination. We may also require public stockholders to
tender their certificates to our transfer agent or to deliver their shares
to
the transfer agent electronically using The Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) System no later than the business day
immediately preceding the vote on the business combination. The proxy
solicitation materials that we will furnish to stockholders in connection
with
the vote for any proposed initial business combination will indicate whether
we
are requiring stockholders to satisfy such certification and delivery
requirements. The requirement for physical or electronic delivery prior
to the
stockholder meeting is two-fold. First, it ensures that a converting
stockholders holder’s election to convert is irrevocable once the business
combination is approved. Second, it ensures that we will know the
amount of proceeds that we will able to use to consummate the business
combination. Traditionally, in contrast to the requirement for physical
or
electronic delivery prior to the stockholder meeting, in order to perfect
conversion rights in connection with a blank check company’s initial business
combination, a holder could simply vote against a proposed business combination
and check a box on the proxy card indicating such holder was seeking to
exercise
his conversion rights. After the business combination was approved, the
company
would contact such stockholder to arrange for him to deliver his certificate
to
verify ownership. As a result, the stockholder then had an “option window” after
the consummation of the business combination during which he could monitor
the
price of the stock in the market. If the price rose above the conversion
price,
he could sell his shares in the open market before actually delivering
his
shares to the company for cancellation in consideration for the conversion
price. Thus, the company would not have any control over the process and
the
conversion right, to which stockholders were aware they needed to exercise
before the stockholder meeting, would become a continuing right surviving
past
the consummation of the business combination until the converting holder
delivered his certificate for conversion at the conversion
price.
The
proxy
solicitation materials that we will furnish to stockholders in connection
with
the vote for any proposed business combination will indicate whether we
are
requiring stockholders to satisfy such certification and delivery
requirements. Accordingly, a stockholder would have from the time we
send out our proxy statement up until the business day immediately preceding
the
vote on the business combination to deliver his shares if he wishes to
seek to
exercise his conversion rights. This time period varies depending on
the specific facts of each transaction. However, as the delivery
process is within the stockholder’s control and,
66
whether
or not he is a record holder or his shares are held in “street name,” can be
accomplished by the stockholder in a matter of hours simply by contacting
the
transfer agent or his broker and requesting delivery of his shares through
the
DWAC System, we believe this time period is sufficient for investors
generally. However, because we do not have any control over the
process, it may take significantly longer than we anticipated and investors
may
not be able to seek conversion in time. Accordingly, we will only
require stockholders to deliver their certificates prior to the vote if,
in
accordance with the American Stock Exchange’s proxy notification
recommendations, the stockholders receive the proxy solicitation materials
at
least twenty days prior to the meeting.
In
the
event a stockholder tenders his or her shares and decides prior to the
stockholder meeting that he or she does not want to convert his or her
shares,
the stockholder may withdraw the tender. In the event that a stockholder
tenders
shares and our initial business combination is not completed, these shares
will
not be converted into cash and the physical certificates representing these
shares will be returned to the stockholder.
There
is
a nominal cost associated with the above-referenced tendering process and
the
act of certificating the shares or delivering them through the DWAC system.
The
transfer agent will typically charge the tendering broker approximately
$35 and
it would be up to the broker whether or not to pass this cost on to the
converting holder. However, this fee would be incurred regardless of
whether or not we require holders seeking to exercise conversion rights
to
tender their shares prior to the meeting as the need to deliver shares
is a
requirement of conversion regardless of the timing of when such delivery
must be
effectuated. Accordingly, this would not result in any increased cost to
shareholders when compared to the traditional process.
The
steps
outlined above will make it more difficult for our stockholders to exercise
their conversion rights. In the event that it takes longer than anticipated
to
obtain a physical certificate, stockholders who wish to convert may be
unable to
obtain physical certificates by the deadline for exercising their conversion
rights and thus will be unable to convert their shares. If a
stockholder votes against the initial business combination but fails to
properly
exercise its conversion rights, such stockholder will not have its shares
of
common stock converted to its pro rata distribution of the trust
account. Any request for conversion, once made, may be withdrawn at
any time up to the date of the meeting. It is anticipated that the
funds to be distributed to stockholders who properly elect conversion will
be
distributed promptly after consummation of our initial business
combination. Public stockholders who convert their stock into their
share of the trust account will still have the right to exercise the warrants
that they received as part of the units. We will not consummate our
proposed initial business combination if public stockholders owning 30%
or more
of the shares sold in this offering both vote against the business combination
and exercise their conversion rights. We will not propose to our
stockholders any transaction that is conditioned on holders of less than
30% of
the public shares exercising their conversion rights.
If
a vote
on our initial business combination is held and the business combination is
not
approved, we may continue to try to consummate a business combination with
a
different target until 24 months from the completion of this
offering. If the initial business combination is not approved or
completed for any reason, then public stockholders voting against our initial
business combination who exercised their conversion rights would not be entitled
to convert their shares of common stock for a pro rata share of the
aggregate amount then on deposit in the trust account. In such case, if we
have
required public stockholders to tender their certificates prior to the meeting,
we will promptly return such certificates to the tendering public
stockholder. Public stockholders would be entitled to receive their
pro rata share of the aggregate amount on deposit in the trust account
only in the event that the initial business combination they voted against
was
duly approved and subsequently completed, or in connection with our liquidation,
whether or not they have previously delivered their shares for conversion
without any further action on their part.
We
will
not complete our proposed initial business combination if public stockholders
owning 30% or more of the shares sold in this offering exercise their conversion
rights. We intend to structure and consummate any potential business combination
in a manner such that public stockholders holding up to in the aggregate one
share less than 30% of our shares issued in this offering voting against our
initial business
67
combination
could convert their shares of common stock into a pro rata share of the
aggregate amount then on deposit in the trust account, and the business
combination could still go forward. As a result, we will be able to
complete a business combination even in the face of strong stockholder dissent.
Furthermore, the ability to consummate a transaction despite shareholder
disapproval in excess of what would be permissible in a traditional blank check
offering may be viewed negatively by potential investors seeking shareholder
protections consistent with traditional blank check
offerings. However, we believe the benefit of approving a transaction
with a large majority outweighs these potential negatives.
The
initial conversion price will be approximately $9.83 per share. As this amount
is lower than the $10.00 per unit offering price and it may be less than the
market price of the common stock on the date of conversion, there may be a
disincentive on the part of public stockholders to exercise their conversion
rights.
Liquidation
if No Business Combination
Our
amended and restated certificate of incorporation provides that we will continue
in existence only until __________, 2009, 24 months from the completion of
this offering. This provision may not be amended except in connection
with the consummation of our initial business combination. If we have
not completed a business combination by such date, our corporate existence
will
cease except for the purposes of liquidating and winding up our affairs,
pursuant to Section 278 of the Delaware General Corporation Law. This
has the same effect as if our board of directors and stockholders had formally
voted to approve our dissolution pursuant to Section 275 of the Delaware
General
Corporation Law. Accordingly, limiting our corporate existence to a
specified date as permitted by Section 102(b)(5) of the Delaware General
Corporation Law removes the necessity to comply with the formal procedures
set
forth in Section 275 (which would have required our board of directors and
stockholders to formally vote to approve our liquidation and to have filed
a certificate of dissolution with the Delaware Secretary of
State). Instead, we will notify the Delaware Secretary of State in
writing on the termination date that our corporate existence has ended, with
any
franchise tax due or assessable by the State of Delaware. We view
this provision terminating our corporate life by _______, 2009 as an obligation
to our stockholders, and our executive officers and directors have agreed
that
they will not take any action to amend or waive this provision to allow us
to
survive for a longer period of time except in connection with the consummation
of our initial business combination.
If
we are
unable to complete an initial business combination within 24 months after the
completion of this offering, as soon as practicable thereafter, we will adopt
a
plan of distribution in accordance with Section 281(b) of the Delaware General
Corporation Law. Section 278 provides that our existence will continue for
at
least three years after our expiration for the purpose of prosecuting and
defending suits, whether civil, criminal or administrative, by or against us,
and of enabling us gradually to settle and close our business, to dispose of
and
convey our property, to discharge our liabilities and to distribute to our
stockholders any remaining assets, but not for the purpose of continuing the
business for which we were organized. Our existence will continue automatically
even beyond the three-year period for the purpose of completing the prosecution
or defense of suits begun prior to the expiration of the three-year period,
until such time as any judgments, orders or decrees resulting from such suits
are fully executed. Section 281(b) will require us to pay or make reasonable
provision for all then-existing claims and obligations, including all
contingent, conditional, or unmatured contractual claims known to us, and to
make such provision as will be reasonably likely to be sufficient to provide
compensation for any then-pending claims and for claims that have not been
made
known to us or that have not arisen but that, based on facts known to us at
the
time, are likely to arise or to become known to us within 10 years after such
date. Payment or reasonable provision for payment of claims will be made in
the
discretion of the board of directors based on the nature of the claim and other
factors deemed relevant by the board of directors. Claims may be satisfied
by
direct negotiation and payment, purchase of insurance to cover the claim(s),
setting aside money as a reserve for future claims, or otherwise as determined
by the board of directors in its discretion. Under Section 281(b), the plan
of
distribution must provide for all of such claims to be paid in full or make
provision for payments to be made in full, as applicable, if there are
sufficient assets. If there are insufficient assets, the plan must provide
that
such claims and obligations be paid or provided for according to their priority
and, among claims of equal priority, ratably to the extent of legally available
assets.
68
Any
remaining assets will be available for distribution to our stockholders.
However, because we are a blank check company, rather than an operating company,
and our operations will be limited to searching for prospective target
businesses to acquire, the only likely claims to arise would be from our vendors
and service providers (such as accountants, lawyers, investment bankers, etc.)
and potential target businesses. We will seek to have all vendors, service
providers and prospective target businesses execute agreements with us waiving
any right, title, interest or claim of any kind they may have in or to any
monies held in the trust account. As a result, the claims that could be made
against us will be limited, thereby lessening the likelihood that any claim
would result in any liability extending to the trust. We therefore believe
that
any necessary provision for creditors will be reduced and should not have a
significant impact on our ability to distribute the funds in the trust account
to our public stockholders. Nevertheless, we cannot assure you of this fact
as
there is no guarantee that vendors, service providers and prospective target
businesses will execute such agreements. Nor is there any guarantee that, even
if they execute such agreements with us, they will not seek recourse against
the
trust account. A court could also conclude that such agreements are not legally
enforceable. As a result, if we liquidate, the per-share distribution from
the
trust account could be less than $9.83 (or $9.80 if the underwriters’
over-allotment option is exercised in full) due to claims or potential claims
of
creditors. We will distribute to all of our public stockholders, in proportion
to their respective equity interests, an aggregate sum equal to the amount
in
the trust account, inclusive of any interest, plus any remaining net assets
(subject to our obligations under Delaware law to provide for claims of
creditors as described below).
We
will
notify the trustee of the trust account to begin liquidating such assets
promptly after such date and anticipate it will take no more than 10 business
days to effectuate such distribution. Our existing stockholders have waived
their rights to participate in any liquidation distribution with respect to
their initial shares of common stock. There will be no distribution from the
trust account with respect to our warrants, which will expire
worthless.
We
will
pay the costs of liquidation from our remaining assets outside of the trust
account. If such funds are insufficient, our sponsor has agreed to
advance us the funds necessary to complete such liquidation (currently
anticipated to be between $15,000 and $25,000) and has agreed not to seek
repayment of such expenses.
If
we
were unable to consummate an initial business combination and expended all
of
the net proceeds of this offering, other than the proceeds deposited in the
trust account, and without taking into account interest income, if any (and
net
of taxes payable on such interest income and release of up to $2,250,000 of
interest income, after tax, available to us to fund working capital
requirements), earned on the trust account, the per share liquidation price
would be approximately $9.83, plus interest, or approximately $0.17 less than
the per-unit offering price of $10.00. The proceeds deposited in the
trust account could, however, become subject to the claims of our creditors
which will be prior to the claims of our public stockholders. Our
sponsor and our executive officers have agreed, on a joint and several basis,
that, if we liquidate prior to the consummation of our initial business
combination, they will reimburse the trust account for our debts to any vendor
for services rendered, products sold or financing provided to us, to a potential
target business or to providers of financing, if any, in each case only to
the
extent necessary to ensure that such claims do not reduce the amount in the
trust account available for payment to our stockholders in the event of a
liquidation. We currently believe that our sponsor and our executive
officers are capable of funding a shortfall in our trust account to satisfy
their foreseeable indemnification obligations. However, we cannot
assure you that our sponsor and our executive officers will be able to satisfy
those obligations. In order to protect the amounts held in the trust
account. NRDC Real Estate Advisors, LLC, the parent of our sponsor,
has separately agreed with our sponsor to provide to our sponsor any funds
required to meet these obligations. In the event that the proceeds in
the trust account are reduced and our sponsor or our executive officers assert
that they are unable to satisfy their obligations or that they have no
indemnification obligations related to a particular claim, our independent
directors would determine whether we would take legal action against our sponsor
or our executive officers to enforce their indemnification
obligations. While we currently expect that our independent directors
would take action on our behalf against our sponsor and our executive officers
to enforce its indemnification obligations to us, it is possible that our
independent directors in exercising their business judgment may choose not
to do
so
69
in
any
particular instance. Accordingly, we cannot assure you that due to
claims of creditors the actual per share liquidation price will not be less
than
approximately $9.83.
We
will
seek to obtain agreements from third parties waiving their rights or claims
to
the trust account. However, there is no guarantee that vendors,
prospective target businesses, or other entities will execute such agreements,
or even if they execute such agreements that they would be prevented from
bringing claims against the trust account, including but not limited to
fraudulent inducement, breach of fiduciary responsibility and other similar
claims, as well as claims challenging the enforceability of the waiver, in
each
case in order to gain an advantage with a claim against our assets, including
the funds held in the trust account which could have higher priority than the
claims of our public stockholders. Our sponsor and our executive
officers have agreed, on a joint and several basis, pursuant to agreements
with
us and Banc of America Securities, LLC that, if we liquidate prior to the
consummation of our initial business combination, they will be liable to ensure
that the proceeds in the trust account are not reduced by claims of target
businesses or entities that are owed money by us for services rendered or
contracted for or products sold to us. We cannot assure you, however,
that they would be able to satisfy those obligations. Accordingly,
the actual per-share liquidation price could be less than $9.83. We
currently believe that our sponsor is capable of funding a shortfall in our
trust account to satisfy their foreseeable indemnification obligations and,
based on representations made to us by each of our executive officers, we
currently believe that they are of substantial means and capable of funding
a
shortfall in our trust account to satisfy their foreseeable indemnification
obligations, but we have not asked them to reserve for such an
eventuality. Despite our belief, we cannot assure you that our
sponsor and our executive officers will be able to satisfy those
obligations. The indemnification obligations may be substantially
higher than our sponsor and our executive officers currently foresee or expect
and/or their financial resources may deteriorate in the future. As a
result, the steps outlined above may not effectively mitigate the risk of
creditors’ claims reducing the amounts in the trust account.
Furthermore,
creditors may seek to interfere with the distribution of the trust account
pursuant to federal or state creditor and bankruptcy laws which could delay
the
actual distribution of such funds or reduce the amount ultimately available
for
distribution to our public stockholders. If we are forced to file a
bankruptcy case or an involuntary bankruptcy case is filed against us which
is
not dismissed, the funds held in our trust account will be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to
claims of third parties with priority over the claims of our public
stockholders. To the extent bankruptcy claims deplete the trust
account, we cannot assure you we will be able to return to our public
stockholders the liquidation amounts they might otherwise receive.
We
expect
that our total costs and expenses associated with the implementing and
completing our liquidation will be in the range of $15,000 to
$25,000. This amount includes all costs and expenses related to our
winding up and liquidation. We believe that there should be
sufficient funds available from interest income, after tax, earned on the trust
account available to us as working capital to fund the $15,000 to $25,000 of
expenses, although we cannot give you assurances that there will be sufficient
funds for such purposes.
If
we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a
result, a bankruptcy court could seek to recover all amounts received by
our
stockholders. Furthermore, because we intend to distribute the
proceeds held in the trust account to our public stockholders promptly after
________, 2009, 24 months from the completion of this offering, this may be
viewed or interpreted as giving preference to our public stockholders over
any
potential creditors with respect to access to or distributions from our
assets. Furthermore, our board may be viewed as having breached their
fiduciary duties to our creditors and/or may have acted in bad faith, and
thereby exposing itself and us to claims of punitive damages, by paying public
stockholders from the trust account prior to addressing the claims of
creditors. We cannot assure you that claims will not be brought
against us for these reasons.
70
Our
public stockholders will be entitled to receive funds from the trust account
only in the event of the expiration of our corporate existence and liquidation
or if the stockholders seek to convert their respective shares into cash upon
a
business combination which the stockholder voted against and which is actually
consummated by us. In no other circumstances shall a stockholder have
any right or interest of any kind to or in the trust account.
Amended
and Restated Certificate of Incorporation
Our
amended and restated certificate of incorporation requires that we obtain
unanimous consent of our stockholders to amend certain provisions of our amended
and restated certificate of incorporation. However, the validity of
unanimous consent provisions under Delaware law has not been
settled. A court could conclude that the unanimous consent
requirement constitutes a practical prohibition on amendment in violation of
the
stockholders’ implicit rights to amend the corporate charter. In that
case, certain provisions of the restated certificate would be amendable without
unanimous consent and any such amendment could reduce or eliminate the
protection afforded to our stockholders. However, we view the
foregoing provisions as obligations to our stockholders, and we will not take
any action to waive or amend any of these provisions.
Neither
we nor our board of directors will propose any amendment to these provisions,
or
support, endorse or recommend any proposal that stockholders amend any of
these
provisions at any time prior to the consummation of our initial business
combination (subject to any fiduciary obligations our management or board
may
have). In addition, we believe we have an obligation in every case to structure
our initial business combination so that not less than 8,999,999
of our shares sold in this offering have the ability to be converted to
cash by public stockholders exercising their conversion rights and that,
despite
such conversions, the business combination may still proceed.
Competition
In
identifying, evaluating, and selecting a target business for an initial business
combination, we may encounter intense competition from other entities having
a
business objective similar to ours including other blank check companies,
private equity groups and leveraged buyout funds, and operating businesses
seeking acquisitions. Many of these entities are well established and
have extensive experience identifying and consummating business combinations
directly or through affiliates. Moreover, many of these competitors
possess greater financial, technical, human, and other resources than
us. While we believe there are numerous potential target businesses
with which we could combine, our ability to acquire larger target businesses
will be limited by our available financial resources. This inherent
limitation gives others an advantage in pursuing an initial business combination
with a target business. In addition:
•
the
requirement that we obtain stockholder approval of our initial business
combination and that audited and perhaps interim-unaudited financial
information be included in the proxy statement to be sent to stockholders
in connection with such business combination may delay or prevent
the
consummation of a transaction;
•
the
conversion of common stock held by our public stockholders into cash
may
reduce the resources available to us to fund an initial business
combination;
•
our
outstanding warrants, the private placement warrants and the co-investment
securities and the dilution they potentially represent, may not be
viewed
favorably by certain target businesses;
and
•
the
requirement to acquire assets or an operating business that has a
fair
market value at least equal to 80% of the balance in the trust account
(less the deferred underwriting discounts and commissions and taxes
payable) at the time of the initial business combination could require
us
to acquire several assets or closely related operating businesses
at the
same time, all of which sales
71
would
be contingent on the closings of the other sales, which could make
it more
difficult to consummate the initial business
combination.
Any
of
these factors may place us at a competitive disadvantage in successfully
negotiating an initial business combination. Our executive officers
and directors believe, however, that a privately held target business may view
our status as a well-financed public entity as offering advantages over other
entities that have a business objective similar to ours.
Facilities
We
currently maintain our executive offices at 3 Manhattanville Road, Purchase,
New
York 10577. The cost for this space is included in the $7,500
per-month fee our sponsor will charge us for general and administrative
services
commencing on the effective date of this offering pursuant to a letter
agreement
between us and our sponsor. The agreement provides for a term of up
to two years, commencing on the effective date of this offering, until
the
earlier of our consummation of an initial business combination or
our liquidation. We believe that based on rents and fees for
similar services in the Purchase, New York area, that the fee which will
be
charged by our sponsor is at least as favorable as we could have obtained
from
an unaffiliated party. We consider our existing office space adequate
for our current operations.
Employees
We
currently have four executive officers, all of whom are also members of our
board of directors. Although our executive officers are not obligated
to contribute any specific number of hours per week to our business, following
this offering, we anticipate that our executive officers will devote a portion
of their working time to our business. As noted earlier, each
of our executive officers is affiliated with other entities,
including NRDC and Apollo, and the amount of time each of them will devote
to us
in any time period will vary based on the availability of suitable target
businesses to investigate, the course of negotiations with target businesses,
and the due diligence preceding and accompanying a possible business
combination. We do not intend to have any employees prior to the
consummation of an initial business combination.
Periodic
Reporting and Financial Information
We
have
registered our securities under the Securities Exchange Act, as amended, and
after this offering will have public reporting obligations, including the filing
of annual and quarterly reports with the SEC. In accordance with the
requirements of the Securities Exchange Act, our annual report will contain
financial statements audited and reported on by our independent registered
public accounting firm and our quarterly reports will contain unaudited
financial statements.
We
will
not acquire our initial target business if we cannot obtain current audited
financial statements based on United States generally accepted accounting
principles for such target business. We will provide these financial
statements in the proxy solicitation materials sent to stockholders for the
purpose of seeking stockholder approval of our initial business
combination. Our executive officers and directors believe that the
need for target businesses to have, or be able to obtain, three years of audited
financial statements may limit the pool of potential target
businesses available for an initial business combination.
Legal
Proceedings
To
the
knowledge of management, there is no litigation currently pending or
contemplated against us or any of our executive officers or directors in
their
capacity as such.
72
Comparison
of This Offering to Those of Blank Check Companies Subject to Rule
419
The
following table compares the terms of this offering to the terms of an offering
by a blank check company subject to the provisions of Rule 419. This
comparison assumes that the gross proceeds, underwriting discounts, and
underwriting expenses of our offering would be identical to those of an offering
undertaken by a company subject to Rule 419, and that the underwriters will
not
exercise their over-allotment option. None of the provisions of Rule
419 apply to our offering.
Terms
of
Our
Offering
Terms
Under a
Rule
419 Offering
Escrow
of offering proceeds
$294,950,589
of the net proceeds from this offering and the private placement
will be
deposited in a trust account at JPMorgan Chase Bank,
N.A., maintained by Continental Stock Transfer & Trust Company,
as trustee. These proceeds consist of $277,950,589 from the net
proceeds of the offering, $9,000,000 of proceeds attributable to
the
deferred underwriting discounts and commissions and $8,000,000
of proceeds
from the private placement.
$251,100,000
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.
Investments
of net proceeds
The
$294,950,589 of net proceeds from this offering and the private
placement
held in the trust account will only be invested in United States
“government securities” within the meaning of Section 2(a)(16) of the 1940
Act with a maturity of 180 days or less or in a money market funds
meeting
conditions under Rule 2a-7 promulgated under the 1940 Act.
Proceeds
could be invested only in specified securities such as a money
market fund
meeting conditions of the 1940 Act or in securities that are direct
obligations of, or obligations guaranteed as to principal or interest
by,
the United States.
Stockholder
right to receive interest earned from funds held in the trust
account
Interest
earned on funds held in the trust account (net of taxes payable
on such
interest income and after release of up to $2,250,000 of interest
income,
after tax, to fund working capital requirements, including the
costs of
our liquidation in such an event) will be held in the trust account
for
use in consummating an initial business combination or released
to
investors upon exercise of their conversion rights or
upon liquidation.
Interest
or dividends earned on the funds, if any, shall be held in the
escrow or
trust account until the funds are released in accordance with Rule
419. Proceeds held in the escrow account would not be released
until the earlier of the consummation of an initial business combination
or the failure to consummate an initial business combination within
the
allotted time. If funds held in the escrow or trust account are
released to a purchaser of the securities, the purchaser shall
receive
interest or dividends earned, if any, on such funds up to the date
of
release. If
73
Terms
of
Our
Offering
Terms
Under a
Rule
419 Offering
funds
held in the escrow or trust account are released to the registrant,
interest or dividends earned on such funds up to the date of release
may
be released to the registrant.
Limitation
on fair value or net assets of target business
The
target for our initial business combination must have a fair market
value
equal to at least 80% of the balance in the trust account (less the
deferred underwriting discounts and commissions and taxes payable)
at the
time of such business combination. If we acquire less than 100%
of one or more target businesses in our initial business combination,
the
aggregate fair market value of the portion or portions we acquire
must
equal at least 80% of the balance in the trust account (excluding
deferred
underwriting discounts and commissions as described above) at the
time of
such initial business combination. The fair market value of a portion
of a
target business will be calculated by multiplying the fair market
value of
the entire business by the percentage of the target business we
acquire.
The
fair value or net assets of a target business must represent at least
80%
of the maximum offering proceeds.
Trading
of securities issued
The
units will begin trading on or promptly after the date of this
prospectus. The common stock and warrants comprising the units
will begin trading separately five (5) business days following the
earlier
to occur of termination of the underwriters’ over-allotment option or its
exercise in full.
No
trading of the units or the underlying common stock and warrants
would be
permitted until the consummation of an initial business
combination. During this period, the securities would be held
in the escrow or trust account.
In
no event will the common stock and warrants be traded separately
until we
have filed a Current Report on Form 8-K with the SEC containing an
audited
balance sheet reflecting our receipt of the gross proceeds of this
offering, including proceeds from exercise of the over-allotment
option if
such option has
74
Terms
of
Our
Offering
Terms
Under a
Rule
419 Offering
then
been exercised. We will file this Form 8-K upon the completion
of this offering. If the over-allotment option is exercised
following the initial filing of such Form 8-K, an additional Current
Report on Form 8-K will be filed to provide updated financial information
to reflect the exercise of the over-allotment option.
Exercise
of the warrants
The
warrants (excluding the co-investment warrants) cannot be exercised
until
the later of the consummation of an initial business combination
or one
year from the completion of this offering (assuming in each case
that
there is an effective registration statement covering the shares
of common
stock underlying the warrants in effect) and, accordingly, will only
be
exercised after the trust account has been terminated and
distributed.
The
warrants could be exercised prior to the consummation of an initial
business combination, but securities received and cash paid in connection
with the exercise would be deposited in the escrow or trust
account.
Election
to remain an investor
Stockholders
will have the opportunity to vote on the initial business
combination. Each stockholder will be sent a proxy statement
containing information required by the SEC. If our shares are
listed on AMEX, the meeting to vote on the initial business combination
will take place not less than 23 days after mailing the proxy
statement. If our shares are not listed on AMEX, the meeting to
vote on the initial business combination will take place not less
than 10
days after the certification date of mailing the proxy
statement. A stockholder following the procedures described in
this prospectus is given the right to convert his, her or its shares
into
a pro rata share of the trust account, including accrued interest
(net of
taxes payable on such interest income and after release of up to
$2,250,000 of interest income, after tax, to fund working capital
requirements). However, a
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
a
post-effective amendment to the company’s registration statement, to
decide if he, she, or it elects to remain a stockholder of the company
or
require the return of his, her, or its investment. If the
company has not received the notification by the end of the 45th
business
day, funds and interest or dividends, if any, held in the trust or
escrow
account are automatically returned to the stockholder. Unless a
sufficient number of investors elect to remain investors, all funds
on
deposit in the escrow account must be returned to all of the investors
and
75
Terms
of
Our
Offering
Terms
Under a
Rule
419 Offering
stockholder
who does not follow these procedures or a stockholder who does not
take
any action, including abstaining from the vote, would not be entitled
to
the return of any funds from the trust account. A quorum of our
stockholders must vote on the initial business
combination. Abstentions are not considered to be voting “for”
or “against” a transaction and will have no effect on the outcome of the
vote to approve our initial business combination. If a majority
of the shares of common stock voted by the public stockholders are
not
voted in favor of a proposed initial business combination but 24 months
have not yet passed since the completion of this offering, we may seek
other target businesses that meet the criteria set forth in this
prospectus with which to consummate our initial business
combination. If at the end of such 24 month period we have not
obtained stockholder approval for an alternate initial business
combination, we will liquidate and promptly distribute the proceeds
of the
trust account, including accrued interest (net of taxes payable on
such
interest income, and after release of up to $2,250,000 of interest
income,
after tax, to fund working capital requirements).
none
of the securities are issued.
76
Terms
of
Our
Offering
Terms
Under a
Rule
419 Offering
Initial
business combination deadline
Pursuant
to our amended and restated certificate of incorporation, our corporate
existence will cease 24 months from the completion of this offering
except
for the purposes of winding up our affairs and we will
liquidate. However, if we complete our initial business
combination within this time period, we will amend this provision
to allow
for our perpetual existence following such business
combination.
If
we are unable to complete a business combination within 24 months
after
the completion of this offering, our existence will automatically
terminate and as promptly as practicable thereafter the trustee will
commence liquidating the investments constituting the trust account
and
distribute the proceeds to our public stockholders, including any
interest
earned on the trust account not used to cover liquidation expenses,
net of
income taxes payable on such interest and after distribution to us
of
interest income on the trust account balance as described in this
prospectus.
If
an initial business combination has not been consummated within 18
months
after the effective date of the company’s registration statement, funds
held in the trust or escrow account are returned to
investors.
Release
of funds held in the trust account
Except
with respect to interest income earned on the trust account balance
released to us to pay any income taxes on such interest and interest
income of up to $2,250,000 million on the balance in the trust
account
released to us to fund our working capital requirements (subject
to the
payment of taxes on such interest), the proceeds held in the
trust account
will not be released to us until the earlier of the completion
of our
initial business combination or the failure to complete our initial
business combination within the allotted time.
The
proceeds held in the escrow account are not released until the
earlier of
the consummation of an initial business combination or the failure
to
consummate an initial business combination within the allotted
time Liquidation will require stockholder approval of a plan
of liquidation approved by our board of directors prior to releasing
the proceeds held in the escrow account. However, since all
securities are required to be held in the escrow or trust
account, liquidation will not require solicitation of public
stockholders or compliance with the SEC proxy rules. In the
event an initial business combination is
77
Terms
of
Our
Offering
Terms
Under a
Rule
419 Offering
not
consummated within 18 months, proceeds held in the trust account would
be
returned within 5 business days of such
date.
78
MANAGEMENT
Our
executive officers and directors, their ages and positions are as
follows:
Name:
Age:
Position:
William
L. Mack
67
Chairman
of the Board
Robert
C. Baker
72
Vice-Chairman
of the Board
Richard
A. Baker
41
Chief
Executive Officer and Director
Lee
Neibart
57
President
and Director
Michael
J. Indiveri
56
Director
Edward
H. Meyer
80
Director
Laura
Pomerantz
60
Director
Ronald
W. Tysoe
54
Director
Below
is
a summary of the business experience of each of our executive officers and
directors.
William
L. Mack – Chairman. Mr. Mack is a founder of NRDC Real
Estate Advisors, LLC and NRDC Equity Partners. He is also a founder
and Senior Partner of Apollo Real Estate Advisors since its inception in 1993
and the President of the corporate general partners of the Apollo real estate
funds. Since 1993, Apollo has overseen the investment of 16 real
estate funds and numerous joint ventures, through which it has invested over
$7
billion in more than 350 transactions. The Apollo real estate funds
target a broad range of opportunistic, value-added and debt investments in
real
estate assets and portfolios throughout the United States, Europe and
Japan. Mr. Mack is also a Senior Partner of the Mack Organization, a
national owner of industrial buildings and other income-producing real estate
investments. Mr. Mack serves as non-executive Chairman of the Board
of Directors of Mack-Cali Realty Corporation, a publicly traded real estate
investment trust. He has been a Director of Mack-Cali since the 1997
merger of the Mack Organization’s office portfolio into
Mack-Cali. Mr. Mack also serves as a Trustee of the University of
Pennsylvania, as an Overseer of the Wharton School of Business, as Vice Chairman
of the Board and as an Executive Committee Member of the North Shore Long Island
Jewish Health System and as the Chairman of the Solomon R. Guggenheim
Foundation. Mr. Mack attended the University of Pennsylvania’s
Wharton School of Business and received a B.S. in Business Administration from
the New York University School of Business.
Robert
C. Baker – Vice-Chairman.Mr. Baker is a founder of
NRDC Real Estate Advisors, LLC and NRDC Equity Partners. He is also
the Chairman and CEO of National Realty & Development Corporation and has
been since its founding in 1978. National Realty & Development
Corporation has amassed a real estate portfolio in excess of 18 million square
feet, which includes shopping centers, corporate business centers and
residential communities in 20 states. The company’s tenants include
prominent retailers such as Wal-Mart, Kohl’s, Lowe’s, Toys ‘R Us, The Home
Depot, Sears, Staples, Supervalu, and T.J. Maxx, among
others. National Realty & Development Corporation remains one of
the largest privately owned development companies in the United
States. Mr. Baker has over 46 years experience in land acquisition,
construction, financing and management. Mr. Baker is a graduate of
Yale University and Yale Law School. He has recently funded the
Dean’s Discretionary Fund at Yale Law School and is a member of the Yale Law
School Executive Committee. Mr. Baker is a Trustee of the Guggenheim
Museum and is a member of the Executive Committee and the Real Estate and
Development Committee. Mr. Baker is also a member of the Board of
Directors of Johns Hopkins Medicine. Mr. Robert Baker is the father
of Mr. Richard Baker, our Chief Executive Officer.
Richard
A. Baker – Chief Executive Officer. Mr. Baker is a
founder and President and Chief Executive Officer of NRDC Real Estate Advisors,
LLC and NRDC Equity Partners. Mr. Baker is also vice chairman of
National Realty & Development Corporation, a privately owned real estate
development company owned by him and Mr. Robert Baker. Mr. Baker is
Chairman of Lord & Taylor Holdings, LLC, and a director of the Hudson’s Bay
Company and Brunswick School. Mr. Baker is a graduate of Cornell
University and
79
serves
on
the Dean’s Advisory Board of the hotel and real estate program. Mr.
Richard Baker is the son of Mr. Robert Baker, our Vice-Chairman.
Lee
Neibart – President. Mr. Neibart is a founder of NRDC
Real Estate Advisors, LLC and NRDC Equity Partners. He has been a
Senior Partner of Apollo Real Estate Advisors since 1993. Mr. Neibart
oversees the global day-to-day activities of Apollo Real Estate Advisors,
including portfolio company and fund management, strategic planning and new
business development. From 1989 to 1993, most recently as Executive
Vice President and Chief Operating Officer, Mr. Neibart worked at the Robert
Martin Company, a real estate development and management firm. Mr.
Neibart is a director of Linens ‘N Things. He also serves as a
director on various boards relating to Apollo’s investment
portfolio. Mr. Neibart serves on the Advisory Boards of both The
Enterprise Foundation and The Real Estate Institute of New York
University. He is a past President of the New York Chapter of the
National Association of Industrial and Office Parks. Mr. Neibart
graduated with a B.A. from the University of Wisconsin and an M.B.A. from New
York University.
Michael
J. Indiveri – Director. Michael J.
Indiveri currently serves as Chief Financial Officer of Amalgamated Bank
in New
York. From 1997 until July 2007, Mr. Indiveri served as the Executive
Vice President & Chief Financial Officer of City & Suburban Federal
Savings Bank, where he was also a director. Mr. Indiveri served as
Senior Vice President & Chief Financial Officer of New York Federal Savings
Bank from 1994 to 1997. Mr. Indiveri received a B.A. in Political
Science from Rutgers University and an M.B.A. from Fordham
University.
Edward
H. Meyer – Director. Edward H. Meyer
was Chairman and CEO of the advertising firm Grey Global Group from 1970
until
2006. Prior to becoming Chairman, he was President of Grey from 1968
until 1970. Prior to Grey, he was as associate
at Bloomingdales. He also served as a director of the May
Department Stores for 17 years. Since leaving Grey in 2006, Mr.
Meyer has acted as a director for a number of companies. He is currently
on the board of Ethan Allen Inc., the Jim Pattison Group, National Cinemedia,
LLC, and Harman International Industries, Inc. Mr. Meyer serves as
Treasurer and Trustee of the Solomon R. Guggenheim Museum and as a Trustee
of
the New York University Medical Center. Mr. Meyer received a B.A. in
Economics from Cornell University
Laura
Pomerantz – Director. Laura Pomerantz
is a Principal at PBS Realty Advisors LLC. Prior to joining PBS in
2001, Ms. Pomerantz was a Senior Managing Director at Newmark & Company Real
Estate. Prior to joining Newmark in 1996, Ms. Pomerantz was Executive
Managing Director of S.L. Green and prior to that she was the Executive Vice
President of The Leslie Fay Companies, Inc., having responsibility for
supervising several of its upscale fashion divisions. She was with
Leslie Fay for over 18 years and served on the company’s Board of
Directors. Ms. Pomerantz is a member of the Carnegie Hall Board of
Trustees. She graduated from Miami Dade Community
College.
Ronald
W. Tysoe – Director. Mr. Tysoe
has been a Senior Advisor at Perella Weinberg Partners LP, a boutique investment
banking firm, since October 2006. Prior to that he was Vice Chairman
of Federated
80
Department
Stores, Inc., a position he held since April of 1990. Mr. Tysoe
served as Chief Financial Officer of Federated from 1990 to 1997 and served
on
the Federated board of directors from 1988 until May 2005. Mr.
Tysoe is currently a member of the board of directors of the E.W. Scripps
Company, and of Canadian Imperial Bank of Commerce. Mr. Tysoe
received both his Bachelor of Commerce and Bachelor of Law degrees at the
University of British Columbia.
Number
and Terms of Directors
Our
board
of directors has nine directors, eight of whom are listed above and one
of whom
we are currently identifying. Our board of directors is divided into
three classes with only one class of directors being elected in each year
and
each class serving a three-year term. The term of office of the first
class of directors, consisting of Michael J. Indiveri, Edward M. Meyer
and Laura
Pomerantz, will expire at our first annual meeting of
stockholders. The term of office of the second class of directors,
consisting of William L. Mack, Ronald W. Tysoe and an additional
director to be identified, will expire at the second annual
meeting. The term of office of the third class of directors,
consisting of Richard A. Baker, Robert C. Baker and Lee Neibart, will
expire at the third annual meeting.
Our
directors will play a key role in identifying and evaluating prospective target
businesses, selecting the target business, and structuring, negotiating and
consummating its combination with us. None of our directors has been
a principal of or affiliated with a public blank check company that executed
a
business plan similar to our business plan and none of our directors is
currently affiliated with such an entity.
Director
Independence
The
American Stock Exchange listing standards require that a majority of our
board
of directors be independent. Our board of directors has determined
that Michael J. Indiveri, Edward H. Meyer, Laura Pomerantz and Ronald W.
Tysoe
are “independent directors” as defined in the American Stock Exchange listing
standards and applicable SEC rules. We intend to identify one additional
independent director. Our independent directors will have regularly
scheduled meetings at which only independent directors are present. In addition,
the independent directors will monitor compliance on a quarterly basis with
the
terms of this offering. If any noncompliance is identified, then the
independent directors will be charged with the responsibility to immediately
take all necessary action to rectify such noncompliance or otherwise cause
compliance with the terms of this offering. The independent
directors’ approval will be required for any affiliated party
transaction.
Committees
of the Board of Directors
Audit
Committee
Our
board
of directors has an Audit Committee that reports to the board of
directors. Michael J. Indiveri and Ronald W. Tysoe serve as members
of our Audit Committee. When we have identified one additional
independent director, as we intend to do, he or she will serve as a member
of
our Audit Committee. Under the American Stock Exchange listing standards
and applicable SEC rules, we are required to have three members of the
Audit
Committee, all of whom must be independent. All of the members of our Audit
Committee are independent.
Michael
J. Indiveri serves as the Chairman of the Audit Committee. Each
member of the Audit Committee is financially literate and our board of
directors
has determined that Michael J. Indiveri qualifies as an “audit
committee financial expert” as defined in applicable SEC rules.
The
Audit
Committee is responsible for:
•
meeting
with our independent accountants regarding, among other issues, audits,
and adequacy of our accounting and control
systems;
81
•
monitoring
the independence of the independent
auditor;
•
verifying
the rotation of the lead (or coordinating) audit partner having primary
responsibility for the audit and the audit partner responsible for
reviewing the audit as required by
law;
•
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;
•
monitoring
compliance on a quarterly basis with the terms of this offering and,
if
any noncompliance is identified, immediately taking all action necessary
to rectify such noncompliance or otherwise causing compliance with
the
terms of this offering; and
•
reviewing
and approving all payments made to our existing stockholders, sponsors,
officers or directors and their respective affiliates, other than
a
payment of an aggregate of $7,500 per month to our sponsor for office
space and administrative services. Any payments made to members of
our
Audit Committee will be reviewed and approved by our board of directors,
with the interested director or directors abstaining from such review
and
approval.
Compensation
Committee
Our
board
of directors has a Compensation Committee that reports to the board of
directors. Edward H. Meyer, Laura Pomerantz and Ronald W. Tysoe, each
of whom is “independent” as defined in the rules of the American Stock Exchange
and the SEC, serve as members of our Compensation Committee. Ronald
W. Tysoe serves as the Chairman of the Compensation
Committee. The functions of our Compensation Committee
include:
•
Establishing
overall employee compensation policies and recommending to our board
of
directors major compensation
programs;
•
Subsequent
to our consummation of a business combination, reviewing and approving
the
compensation of our officers and directors, including salary and
bonus
awards;
•
Administering
our various employee benefit, pension and equity incentive
programs;
•
Reviewing
officer and director indemnification and insurance matters;
and
•
Following
the completion of this offering, preparing an annual report on executive
compensation for inclusion in our proxy
statement.
82
Governance
and Nominating Committee
We
do not
currently have a Governance and Nominating Committee. The independent
members of our board of directors perform the functions of a Governance and
Nominating Committee.
Executive
Officer and Director Compensation
No
compensation of any kind, including finder’s and consulting fees, will be paid
to any of our executive officers, directors, or existing stockholders, or any
of
their respective affiliates (except as otherwise set forth in this prospectus),
for services rendered prior to or in connection with an initial business
combination. However, our executive officers and directors will be
reimbursed for any out-of-pocket expenses incurred in connection with activities
on our behalf, such as attending board of directors meetings, participating
in
the offering process, identifying potential target businesses and performing
due
diligence on suitable business combinations. There is no limit on the
amount of out-of-pocket expenses reimbursable by us and there will be no review
of the reasonableness of the expenses by anyone other than our board of
directors, which includes persons who may seek reimbursement, or a court of
competent jurisdiction if such reimbursement is challenged. To the
extent such out-of-pocket expenses exceed the available proceeds not deposited
in the trust account, such out-of-pocket expenses would not be reimbursed by
us
unless we consummate an initial business combination.
In
addition, our current executive officers and directors may or may not remain
with us following an initial business combination, depending on the type of
business acquired and the industry in which the target business
operates. If they do remain with our company, we may enter into
employment or other compensation arrangements with them following an initial
business combination, the terms of which have not yet been
determined. We cannot assure you that our current executive officers
and directors will be retained in any significant role, or at all, and have
no
ability to determine what remuneration, if any, will be paid to them if they
are
retained following an initial business combination.
Code
of Ethics
We
have
adopted a Code of Ethics that applies to our officers, directors and
employees. We have filed a copy of our Code of Ethics as an exhibit
to the registration statement of which this prospectus is a part. You
will be able to review this document by accessing our public filings at the
SEC’s web site at www.sec.gov. In addition, a copy of the Code of
Ethics will be provided without charge upon request from us. We
intend to disclose any amendments to or waivers of certain provisions of our
Code of Ethics in a Form 8-K.
83
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Prior
Share Issuances
On
July
13, 2007, we issued 8,625,000 shares of our common stock (including 1,125,000
shares that are subject to forfeiture to the extent the underwriters do not
exercise their over-allotment option) to our sponsor for $25,000 in cash
at a
purchase price of approximately $0.003 per share, after giving effect to
a 6 for
5 stock split of our common stock on September 4, 2007. NRDC Capital
Management, LLC is a single member limited liability company, whose sole
member
is NRDC Real Estate Advisors, LLC, the sole members of which are our executive
officers. Our sponsor will transfer to each of our
independent directors an equal number of shares on the same conditions and
for the same price per share as those we extended to our
sponsor.
On
[ ], 2007, we entered into an agreement
with our sponsor pursuant to which it has agreed to purchase an aggregate of
8,000,000 warrants at a purchase price of $1.00 per warrant. These
warrants will be purchased in a private placement pursuant to an exemption
from
registration contained in Section 4(2) of the Securities Act. The
private placement will occur immediately prior to completion of this
offering.
Our
sponsor will be entitled to make up to three demands that we register these
securities pursuant to an agreement to be signed prior to or on the date of
this
prospectus. Our sponsor can elect to exercise these registration
rights at any time beginning three months prior to the date on which the
transfer restriction period applicable to such shares expires. In
addition, our sponsor has certain “piggy-back” registration rights with respect
to these shares on registration statements filed subsequent to such
date. Our other existing stockholders have piggy-back registration
rights with respect to their shares on registration statements filed following
the date three months prior to the date on which they become available for
resale. We will bear the expenses incurred in connection
with the filing of any such registration statements.
Co-investment
Units
Our
sponsor has agreed to purchase 2,000,000 co-investment units in connection
with
our initial business combination at a purchase price of 10.00 per unit
for an
aggregate purchase price of $20,000,000, from us in a private placement
that
will occur immediately prior to the consummation of our initial business
combination. This will not occur until the execution of a definitive
business combination agreement and the approval of our initial business
combination by our stockholders. These co-investment units will be
identical to the units sold in this offering except that the common stock
and
the warrants included in the co-investment units, and the common stock
issuable
upon exercise of those warrants, with certain limited exceptions, may not
be
transferred or sold for one year after the consummation of our initial
business
combination. Additionally, the warrants included in the co-investment
units are (1) exercisable only after the date on which the last sales price
of
our common stock on the American Stock Exchange, or other national securities
exchange on which our common stock may be traded, equals or exceeds $14.25
per
share for any 20 trading days within any 30-trading-day period beginning
at
least 90 calendar days after the consummation of our initial business
combination, (2) exercisable on a cashless basis so long as they are held by the
original purchaser or its permitted transferees and (3) not subject to
redemption by us. As the proceeds from the sale of the co-investment
units will not be received by us until immediately prior to our consummation
of
a business combination, these proceeds will not be deposited into the trust
account and will not be available for distribution to our public stockholders
in
the event of a liquidating distribution. Our sponsor will not receive
any additional carried interest (in the form of additional units, common
stock,
warrants or otherwise) in connection with the co-investment. The
business purpose of the co-investment is to provide additional capital
to us and
to demonstrate our sponsor’s further commitment to our completion of a business
combination. We have agreed with our sponsor that if any person that
has a co-investment obligation does not consummate the co-investment when
required to do so, that person will forfeit all of the shares and private
placement warrants that such person purchased prior to the completion of
this
offering.
84
Conflicts
of Interest
Potential
investors should be aware of the following potential conflicts of
interest:
•
None
of our executive officers and directors is required to commit his
full
time to our affairs and, accordingly, they may have conflicts of
interest
in allocating management time among various business
activities. Each of our executive officers and directors is
engaged in several other business endeavors. Our executive
officers and directors are not obligated to contribute any specific
number
of hours per week to our affairs.
•
In
the course of their other business activities, our executive officers
and
directors may become aware of investment and business opportunities
that
may be appropriate for presentation to us as well as the other entities
with which they are affiliated. They may have conflicts of
interest in determining to which entity a particular business opportunity
should be presented. For a complete description of our
executive officers’ and directors’ other affiliations, see the section
entitled “Management.” We and they have determined to deal with these
potential conflicts as discussed
below.
•
Our
executive officers and directors are, and may in the future become,
affiliated with entities engaged in business activities similar to
those
intended to be conducted by us but have agreed not to become affiliated
with any other blank check companies until the earlier of our consummation
of an initial business combination or our
liquidation.
•
We
may decide to acquire one or more businesses affiliated with our
executive
officers, directors or existing stockholders. Despite our
agreement to obtain an opinion from an independent investment banking
firm
that a business combination with one or more businesses affiliated
with
our executive officers, directors or existing stockholders is fair
to our
stockholders from a financial point of view, potential conflicts
of
interest may still exist, and as a result, the terms of our initial
business combination may not be as advantageous to our public stockholders
as it would be absent any conflicts of
interest.
•
The
personal and financial interests of our executive officers and directors
may influence their motivation in identifying and selecting target
businesses and consummating an initial business combination in a
timely
manner. These interests include membership interests held by
our executive officers, all of whom are also directors, in our sponsor,
and through those interests an indirect ownership in our common stock,
private placement warrants and co-investment securities held by our
sponsor. Our executive officers, directors and existing
stockholders have entered into a lock-up agreement with the underwriters.
Under the terms of this agreement, our executive officers, directors
and
existing stockholders have agreed not to enter into any agreement
to sell
or transfer any of their common stock held prior to the completion
of this
offering, if any, until one year after the consummation of our initial
business combination, and any of their private placement warrants,
if any,
until after the consummation of our initial business
combination.
•
It
is possible that Messrs Mack, Robert Baker, Richard Baker and Neibart,
as
our executive officers, could be negotiating the terms and conditions
of
the business combination on our behalf at the same time that they,
as
individuals, were negotiating the terms and conditions related to
an
employment, consulting or other agreement with representatives of
the
potential business combination
candidate.
•
Our
sponsorhas agreed that, commencing on the effective
date of this prospectus it will make available to us office space
and
certain general and administrative services, as we may require from
time
to time. We have agreed to pay our sponsor, $7,500 per month
for these services. As a result of this agreement, our
executive officers will benefit from the transaction to the extent
of
85
their
indirect interest in our sponsor. However, these arrangements
are solely for our benefit and are not intended to provide any
of our
executive officers or directors compensation in lieu of a
salary. We believe, based on rents and fees for similar office
space and services in the Purchase, New York area, that the fees
charged
by our sponsor, are at least as favorable as we could have obtained
from
unaffiliated third-parties.
In
general, executive officers and directors of a corporation incorporated under
the laws of the State of Delaware are required to present business opportunities
to a corporation if:
•
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.
As
a
result of multiple business affiliations, our executive officers and
directors
may have similar legal obligations relating to presenting business opportunities
meeting the above-listed criteria to other entities. In
addition, conflicts of interest may arise when our board of directors
evaluates
a particular business opportunity with respect to the above-listed
criteria. Thus, our executive officers and directors may present
business combination opportunities to the other entities to which they
owe a
pre-existing fiduciary duty before presenting such opportunities to
us. In this connection, we have entered into a business opportunity
right of first offer agreement with our sponsor, NRDC Real Estate Advisors,
LLC
and NRDC Equity Partners and with our executive officers and
directors. This right of first offer provides that from the date of
this prospectus until the earlier of the consummation of our initial
business
combination or our liquidation, we will have a right of first offer if
any of
these parties becomes aware of, or involved with, a business combination
opportunity with any operating business. Subject to their respective
pre-existing fiduciary obligations, these parties to the right of first
offer
agreement will, and will cause companies or entities under their management
or
control, to first offer any such business opportunity to us and they
will not,
and will cause each other company or entity under their management or
control
not, to pursue any such business opportunity unless and until our board
of
directors, including a majority of our disinterested independent directors,
has
determined that we will not pursue such opportunity.
We
recognize that each of our executive officers and directors may be deemed
an
affiliate of any company for which such executive officer or director
serves as
an officer or director or for which such executive officer or director
otherwise
has a pre-existing fiduciary duty and that a conflict of interest could
arise if
an opportunity is appropriate for one of such companies. As part of
this right of first offer, we have established procedures with respect
to the
sourcing of a potential business combination by our executive officers
and
directors to eliminate such conflict for our executive officers and directors,
whereby a potential business combination that must be presented to
any company for which such executive officer or director, as the case may
be, serves as an officer or director or otherwise has a pre-existing
fiduciary
duty (other than our sponsor, NRDC Real Estate Advisors, LLC and NRDC
Equity
Partners) will not be presented to us until after such executive officer
or
director has presented the opportunity to such company and such company
has
determined not to proceed.
Our
existing stockholders have waived their rights to participate in any liquidating
distributions occurring upon our failure to consummate an initial business
combination with respect to the shares of common stock that they acquire prior
to this offering. Our existing stockholders will participate in any
liquidating distributions with respect to any shares of common stock acquired
by
them in connection with or following this offering. In addition, in
connection with any vote required for our initial business combination, our
existing stockholders have agreed to vote all of the shares of common stock
owned by them immediately before the completion of this offering either for
or
against an initial business combination and amending our amended and restated
certificate of incorporation to provide for our perpetual existence in the
same
manner
86
that
the
majority of the shares of common stock are voted by our public
stockholders. Our executive officers, directors and existing
stockholders also have agreed that if they acquire shares of common stock in
or
following completion of this offering, they will vote all such acquired shares
in favor of our initial business combination and in favor of amending our
amended and restated certificate of incorporation to provide for our perpetual
existence. Accordingly, our existing stockholders will not have any
conversion rights with respect to those shares acquired in or following
completion of this offering. A stockholder is eligible to exercise
its conversion rights only if it votes against an initial business combination
that is ultimately approved and consummated.
NRDC
Capital Management, LLC, our sponsor and an existing stockholder, made us an
interest-free loan of $200,000 for the payment of offering
expenses. The loan will be repaid upon the completion of this
offering out of the proceeds of this offering.
We
will
reimburse our executive officers and directors for any out-of-pocket business
expenses incurred by them in connection with certain activities on our behalf
such as identifying and investigating possible target businesses and business
combinations. There is no limit on the amount of accountable
out-of-pocket expenses reimbursable by us, which will be reviewed only by our
board of directors or a court of competent jurisdiction if such reimbursement
is
challenged. To the extent such out-of-pocket expenses exceed the
available proceeds not deposited in the trust account, such out-of-pocket
expenses would not be reimbursed by us unless we consummate an initial business
combination.
Other
than the repayment of the $200,000 interest-free loan described above, the
payment of $7,500 per month to our sponsor in connection with the office space
and certain general and administrative services rendered to us and reimbursement
for out-of-pocket expenses payable to our executive officers and directors,
no
compensation of any kind, including finder’s and consulting fees, will be paid
to any of our executive officers, directors, or existing stockholders or any
of
their respective affiliates prior to or in connection with our initial business
combination.
All
ongoing and future transactions between us and any of our executive officers
and
directors or their respective affiliates, including loans by our executive
officers and directors, will be on terms believed by us to be no less favorable
than are available from unaffiliated third parties and such transactions or
loans, including any forgiveness of loans, will require prior approval in each
instance by a majority of our uninterested “independent” directors (to the
extent we have any) or the members of our board of directors who do not have
an
interest in the transaction, in either case who had access, at our expense,
to
our attorneys or independent legal counsel.
We
consider Messrs. William L. Mack, Robert C. Baker, Richard A. Baker and Lee
Neibart to be our “promoters” and our sponsor to be our “parent” as these terms
are defined under the federal securities laws.
87
PRINCIPAL
STOCKHOLDERS
The
following table sets forth information regarding the beneficial ownership of
our
common stock as of the date of this prospectus after giving effect to a 6 for
5
stock split of our common stock and as adjusted to reflect the sale of our
common stock included in the units offered by this prospectus, (assuming no
purchase of units in this offering) by:
•
each
person known by us to be the beneficial owner of more than 5% of
our
outstanding shares of common stock;
•
each
of our executive officers and directors;
and
•
all
of our executive officers and directors as a
group.
As
Adjusted for the Public Offering
No
Exercise of
Over-allotment
Option
Full
Exercise of
Over-allotment
Option
Name
of Beneficial Owners(1)
Number
of Shares before Offering and Private Placement
(2)
Percentage
of Outstanding Common Stock
Number
of Shares(3)
Percentage
of Outstanding Common Stock
Number
of Shares (2)
Percentage
of Outstanding Common Stock
NRDC
Capital Management, LLC(2)(6)
8,625,000
100.00
%
7,500,000
20.00
%
8,625,000
20.00
%
William
L. Mack(3)(6)
8,625,000
100.00
%
7,500,000
20.00
%
8,625,000
20.00
%
Robert
C. Baker(3)(4)(6)
8,625,000
100.00
%
7,500,000
20.00
%
8,625,000
20.00
%
Richard
A. Baker(3)(4)(6)
8,625,000
100.00
%
7,500,000
20.00
%
8,625,000
20.00
%
Lee
Neibart(3)(6)
8,625,000
100.00
%
7,500,000
20.00
%
8,625,000
20.00
%
Michael
J. Indiveri(5)
45,000
0.52
%
45,000
*
45,000
*
Edward
H. Meyer(5)
45,000
0.52
%
45,000
*
45,000
*
Laura
Pomerantz(5)
45,000
0.52
%
45,000
*
45,000
*
Ronald
W. Tysoe(5)
45,000
0.52
%
45,000
*
45,000
*
All
Directors and Officers as a Group (9 persons)(7)
8,625,000
100.00
%
45,000
20.00
%
8,625,000
20.00
%
*
represents less than 1%
(1)
Unless
otherwise noted, the business address of each of the following is
3
Manhattanville Road, Purchase, New York
10577.
(2)
NRDC
Real Estate Advisors, LLC, as the sole member of our sponsor, may
be
deemed to be the beneficial owner of the shares of common stock held
by
our sponsor. William L. Mack, Robert C. Baker, Richard A. Baker
and Lee Neibart, as the members of NRDC Real Estate Advisors, LLC,
may be
deemed to be the beneficial owners of the shares of common stock
held by
NRDC Real Estate Advisors, LLC. Includes 1,125,000 shares of
common stock that are subject to forfeiture to the extent the underwriters
do not exercise their over-allotment
option.
(3)
Includes
shares issued to our sponsor. See footnote (2)
above.
88
(4)
Mr.
Robert C. Baker and Mr. Richard A. Baker are father and son, but
do not
share the same residence.
(5)
Each
of our independent directors will receive 45,000 shares of common
stock in
a private transfer from our sponsor at the same price and on
the same
terms as those we extended to our
sponsor.
(6)
Upon
consummation of the co-investment, our sponsor would own approximately
24.1% of our outstanding common stock, assuming that no additional
shares
are otherwise issued as consideration for our initial business
combination
and that our sponsor does not purchase any additional shares of
our common
stock in this offering or after completion of this
offering.
(7)
Includes
one additional independent director which we intend to identify.
In
addition, in connection with any vote required for our initial business
combination, our existing stockholders have agreed to vote all of the shares
of
common stock held by them prior to the completion of this offering either
for or
against a business combination and amending our amended and restated certificate
of incorporation to provide for our perpetual existence in the same manner
that
the majority of the shares of common stock are voted by our public
stockholders. Our executive officers, directors and existing
stockholders also have agreed that if they acquire shares of common stock
in or
following completion of this offering, they will vote all such acquired shares
in favor of our initial business combination and in favor of amending our
amended and restated certificate of incorporation to provide for our perpetual
existence.
Our
executive officers, directors and existing stockholders have entered into a
lock-up agreement with the underwriters. Under the terms of this
agreement, and other than in respect of the co-investment units, we may not
issue any new units, shares of common stock or warrants, or publicly announce
the intention to do any of the foregoing, without the prior written consent
of
Banc of America Securities LLC, until or in connection with the consummation
of
our initial business combination. Additionally, subject to certain
limited exceptions, our executive officers, directors and existing stockholders
have agreed not to enter into any agreement to sell or transfer any of their
common stock held prior to the completion of this offering, if any, until one
year after the consummation of our initial business combination, and any of
their private placement warrants, if any, until after the consummation of our
initial business combination. This consent may be given at any time
without public notice. However, if (1) during the last 17 days of the
applicable lock-up period, we issue material news or a material event relating
to us occurs or (2) before the expiration of the applicable lock-up period,
we
announce that material news or a material event will occur during the 16-day
period beginning on the last day of the applicable lock-up period, the
applicable lock-up period will be extended for up to 18 days beginning on the
issuance of the material news or the occurrence of the material
event.
89
DESCRIPTION
OF SECURITIES
General
We
are
authorized to issue 106,000,000 shares of common stock, par value $0.0001 per
share, and 5,000 shares of preferred stock, par value $0.0001 per
share. As of the date of this prospectus, 8,625,000 shares of common
stock are outstanding, held by one record holder, and no shares of preferred
stock are outstanding. If the underwriters do not exercise the
over-allotment option in full, up to 1,125,000 of such shares are subject to
forfeiture. The underwriting agreement prohibits us, prior to an initial
business combination, from issuing additional units, additional common stock,
preferred stock, additional warrants, or any options or other securities
convertible or exchangeable into common stock or preferred stock which
participates in any manner in the proceeds of the trust account, or which votes
as a class with the common stock on a business combination.
Units
Each
unit
consists of one share of common stock and one warrant. Each warrant
entitles the holder to purchase one share of common stock. Each of
the common stock and warrants will begin trading separately on the earlier
to
occur of the termination of the underwriters’ option to purchase up to 4,500,000
additional units to cover over-allotments or the exercise by the underwriters
of
such option. In no event may the common stock and warrants be traded
separately until we have filed with the SEC a Current Report on Form 8-K that
includes an audited balance sheet reflecting our receipt of the gross proceeds
of this offering. We will file a Current Report on Form 8-K that
includes this audited balance sheet upon the completion of this offering, which
is anticipated to take place three business days after the date of this
prospectus. The audited balance sheet will reflect proceeds we
receive from the exercise of the over-allotment option, if the over-allotment
option is exercised prior to the filing of the Current Report on Form 8-K,
and
if such over-allotment option is exercised after such time, we will file an
additional Current Report on Form 8-K including an audited balance sheet
reflecting our receipt of the gross proceeds from such exercise of the
over-allotment option. Following the date the common stock and the
warrants are eligible to trade separately, the units will continue to be listed
for trading and any stockholder may elect to trade the common stock and the
warrants separately or as a unit. Even if the component parts of the
units are broken apart and traded separately, the units will continue to be
listed as a separate security and any stockholder of our common stock and
warrants may elect to combine them and to trade them as a
unit. Stockholders will have the ability to trade our securities as
units until such time as the warrants expire or are redeemed.
Common
Stock
Our
stockholders are entitled to one vote for each share held of record on all
matters to be voted on by stockholders. In connection with any vote
required for our initial business combination, our executive officers, directors
and existing stockholders have agreed to vote all of the shares of common stock
owned by them prior to the completion of this offering either for or against
an
initial business combination in the same manner that the majority of the shares
of common stock are voted by our public stockholders. Our executive
officers, directors and existing stockholders also have agreed that if they
acquire shares of common stock in or following the completion of this offering,
they will vote all such acquired shares in favor of our initial business
combination. However, our executive officers, directors and existing
stockholders will vote all of their shares in any manner they determine, in
their sole discretion, with respect to any other items that come before a vote
of our stockholders.
We
will
proceed with the initial business combination only if a majority of the shares
of common stock voted by the public stockholders are voted in favor of the
initial business combination, public stockholders owning less than 30% of the
shares sold in this offering both vote against the proposed initial business
combination and exercise their conversion rights as discussed above and a
majority of the outstanding
90
shares
of
our common stock are voted in favor of an amendment to our amended and restated
certificate of incorporation to provide for our perpetual
existence.
Pursuant
to our certificate of incorporation, if we do not consummate our initial
business combination within 24 months after the completion of this offering,
our
corporate existence will cease except for the purposes of winding up our affairs
and liquidating. If we are forced to liquidate prior to our initial business
combination, our public stockholders are entitled to share ratably in the trust
account, inclusive of any interest not previously released to us to fund working
capital requirements and net of any income taxes due on such interest, which
income taxes, if any, shall be paid from the trust account, and any assets
remaining available for distribution to them. If we do not complete our initial
business combination and the trustee must distribute the balance of the trust
account, the underwriters have agreed that: (i) they will forfeit any rights
or
claims to their deferred underwriting discounts and commissions, including
any
accrued interest thereon, then in the trust account, and (ii) the deferred
underwriting discounts and commission will be distributed on a pro rata basis
among the public stockholders, together with any accrued interest thereon,
net
of income taxes payable on such interest. Our existing stockholders,
including our executive officers and directors, have waived their right to
participate in any liquidating distributions occurring upon our failure to
consummate an initial business combination with respect to shares of common
stock acquired by them prior to this offering. However, our existing
stockholders will participate in any liquidating distributions with respect
to
any other shares of common stock acquired by any of them in connection with
or
following this offering.
Our
stockholders have no conversion, preemptive, or other subscription rights and
there are no sinking fund or redemption provisions applicable to the common
stock, except that public stockholders, other than our existing stockholders,
have the right to have their shares of common stock converted to cash equal
to
their pro rata share of the trust account if they vote against the initial
business combination and the initial business combination is approved and
consummated. Public stockholders who convert their stock into their
share of the trust account still have the right to exercise the warrants that
they received as part of the units.
Preferred
Stock
Our
amended and restated certificate of incorporation authorizes the issuance of
5,000 shares of blank check preferred stock with such designation, rights and
preferences as may be determined from time to time by our board of
directors. No shares of preferred stock have been or are being issued
or registered in this offering. Accordingly, our board of directors
is empowered, without stockholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting, or other rights which could adversely
affect the voting power or other rights of the holders of common
stock. We may issue some or all of the preferred stock to consummate
a business combination. In addition, the preferred stock could be
utilized as a method of discouraging, delaying or preventing a change in control
of us. However, the underwriting agreement prohibits us, prior to an
initial business combination, from issuing preferred stock which participates
in
any manner in the proceeds of the trust account, or which votes as a class
with
the common stock on a business combination. Although we do not
currently intend to issue any shares of preferred stock, we cannot assure you
that we will not do so in the future.
Warrants
No
warrants are currently outstanding. Each warrant entitles the
registered holder to purchase one share of our common stock at a price of $7.50
per share, subject to adjustment as discussed below, at any time, unless we
earlier redeem the warrants, commencing on the later of:
•
the
consummation of the initial business combination;
or
•
one
year from the completion of this
offering.
91
The
warrants will expire four years from the completion of this offering at 5:00
p.m., New York City time. We may call the warrants for redemption at
any time after the warrants become exercisable:
•
in
whole and not in part;
•
at
a price of $0.01 per warrant;
•
upon
a minimum of 30 days’ prior written notice to each warrant holder;
and
•
if,
and only if, the last sales price of our common stock on the American
Stock Exchange, or other principal market on which our common stock
may be
traded, equals or exceeds $14.25 per share for any 20 trading days
within
a 30 trading day period ending three business days before we send
the
notice of redemption to warrant holders, and a registration statement
under the Securities Act relating to shares of common stock issuable
upon
exercise of the warrants is effective and expected to remain effective
and
a prospectus is available for use to and including the redemption
date.
We
have
established this last criterion to provide warrant holders with a premium to
the
initial warrant exercise price as well as a degree of liquidity to cushion
the
market reaction, if any, to our redemption call. If the foregoing
conditions are satisfied and we call the warrants for redemption, each warrant
holder will then be entitled to exercise his warrants prior to the scheduled
redemption date. There can be no assurance that the price of the
common stock will exceed either the redemption price of $14.25 per share of
common stock or the warrant exercise price of $7.50 per share of common stock
after we call the warrants for redemption. Our right to redeem the
outstanding warrants includes the private placement warrants.
The
right
to exercise the warrants will be forfeited unless they are exercised before
the
date specified in the notice of redemption. From and after the
redemption date, the record holder of a warrant will have no further rights
except to receive, upon surrender of the warrants, the redemption
price.
The
warrants will be issued in registered form under a warrant agreement between
Continental Stock Transfer & Trust Company, as warrant agent, and
us. You should review a copy of the warrant agreement, which has been
filed as an exhibit to the registration statement of which this prospectus
is a
part, for a complete description of the terms and conditions applicable to
the
warrants.
The
exercise price and number of shares of common stock issuable on exercise of
the
warrants may be adjusted in certain circumstances including in the event of
a
stock dividend, or our recapitalization, reorganization, merger, or
consolidation. However, the warrants will not be adjusted for
issuances of common stock at a price below their respective exercise
prices.
The
warrants may be exercised upon surrender of the warrant certificate on or prior
to the expiration date at the offices of the warrant agent, with the exercise
form on the reverse side of the warrant certificate completed and executed
as
indicated, accompanied by full payment of the exercise price, by certified
check
payable to us, for the number of warrants being exercised. The
warrant holders do not have the rights or privileges of holders of common stock
and any voting rights until they exercise their warrants and receive shares
of
common stock. After the issuance of shares of common stock upon
exercise of the warrants, each holder will be entitled to one vote for each
share held of record on all matters to be voted on by
stockholders. The private placement warrants may be exercised on a
cashless basis so long as they are held by our sponsor or its permitted
transferees.
No
warrants will be exercisable unless at the time of exercise a registration
statement relating to shares of common stock issuable upon exercise of the
warrants is effective and a prospectus relating to shares of common stock
issuable upon exercise of the warrants is available for use and the common
stock
has been registered or qualified or deemed to be exempt under the securities
laws of the state of residence of the holder
92
of
the
warrants. Holders of the warrants are not entitled to net cash
settlement and the warrants may only be settled by delivery of shares of our
common stock and not cash. Under the terms of the warrant agreement,
we have agreed to meet these conditions and use our best efforts to maintain
an
effective registration statement and a current prospectus relating to common
stock issuable upon exercise of the warrants until the expiration of the
warrants. However, we cannot assure you that we will be able to do
so. We have no obligation to settle the warrants in the absence of an
effective registration statement or a prospectus available for use. The warrants
may never become exercisable if we never comply with these registration
requirements. The warrants may be deprived of any value and the
market for the warrants may be limited if an effective registration statement
and the prospectus relating to the common stock issuable upon the exercise
of
the warrants is not current or if the common stock is not qualified or exempt
from qualification in the jurisdictions in which the holders of the warrants
reside and we will not be required to cash settle any such warrant
exercise. Warrants included in the units issued in this offering will
not be exercisable on a cashless basis. The private placement
warrants will not be exercisable at any time unless a registration statement
is
effective and a prospectus is available for the public warrant
holders.
No
fractional shares will be issued upon exercise of the warrants. If,
upon exercise of the warrants, a holder would be entitled to receive a
fractional interest in a share, we will, upon exercise, round up to the nearest
whole number the number of shares of common stock to be issued to the warrant
holder.
Initial
Shares and Co-investment Shares
Our
sponsor and other holders of shares of our common stock issued prior to the
consummation of this offering have the same rights as public stockholders,
except that they will not participate in any distribution of amounts in the
trust account in the event that we fail to consummate our initial business
combination within 24 months after the date of this prospectus and are not
entitled to conversion rights in the event of our initial business
combination. Holders of the co-investment shares, if and when issued,
will be entitled to the same rights as our public stockholders. The
initial shares and the co-investment shares are not transferable or saleable,
with limited exceptions, until one year after the consummation of our initial
business combination. Additionally, because our executive officers are the
sole members in NRDC Real Estate Advisors, the sole member of our sponsor,
these
executive officers have agreed not to sell or otherwise transfer their ownership
interests in NRDC Real Estate Advisors until we have consummated our initial
business combination, subject to the same limitation as noted
above.
Private
Placement Warrants
The
warrants issued in the private placement will be identical to the warrants
included in the units to be sold and issued in this offering, except that our
sponsor or its permitted transferees will have the right to exercise those
warrants on a cashless basis. If a holder of the private placement
warrants elects to exercise them on a cashless basis, that holder would pay
the
exercise price by surrendering his, her or its 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. The reason
that we have agreed that these warrants will be exercisable on a cashless basis
so long as they are held by our the sponsor and its permitted transferees is
because it is not known at this time whether they will be affiliated with us
following a business combination. If they remain affiliated with us, their
ability to sell our securities in the open market will be significantly limited.
We expect to have policies in place that prohibit insiders from selling our
securities except during specific periods of time. Even during such periods
of
time when insiders will be permitted to sell our securities, an insider cannot
trade in our securities if he or she is in possession of material non-public
information. Accordingly, unlike public stockholders who could exercise their
warrants and sell the shares of common stock received upon such exercise freely
in the open market in order to recoup the cost of such exercise, the insiders
could be significantly restricted from selling such
93
securities.
As a result, we believe that allowing the holders to exercise such warrants
on a
cashless basis is appropriate. We would not receive additional
proceeds to the extent the warrants are exercised on a cashless
basis. Warrants included in the units issued in this offering will
not be exercisable on a cashless basis.
Dividends
We
have
not paid any dividends on our common stock to date. It is the present
intention of our board of directors to retain all earnings, if any, for use
in
our business operations and, accordingly, our board of directors does not
anticipate declaring any dividends in the foreseeable future. The
payment of dividends, if any, will be contingent upon our revenues and earnings,
if any, capital requirements and general financial condition. We do
not intend to pay any dividends prior to the consummation of our initial
business combination. The payment of any dividends subsequent to an
initial business combination will be within the discretion of our then board
of
directors.
Our
Transfer Agent and Warrant Agent
The
transfer agent for our securities and warrant agent for our warrants is
Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New
York 10004.
Certain
Anti-Takeover Provisions of Delaware Law and our Amended and Restated
Certificate of Incorporation and Bylaws
Staggered
board of directors
Our
amended and restated certificate of incorporation, which will be in effect
upon
consummation of this offering, will provide that our board of directors will
be
classified into three classes of directors of approximately equal size. As
a
result, in most circumstances, a person can gain control of our board only
by
successfully engaging in a proxy contest at two or more annual
meetings.
Special
meeting of stockholders
Our
bylaws provide that special meetings of our stockholders may be called only
by a
majority vote of our board of directors, by our chief executive officer, our
chairman or secretary or at the request in writing of stockholders owning a
majority of our issued and outstanding capital stock entitled to
vote.
Advance
notice requirements for stockholder proposals and director
nominations
Our
bylaws provide that stockholders seeking to bring business before our annual
meeting of stockholders, or to nominate candidates for election as directors
at
our annual meeting of stockholders, must provide timely notice of their intent
in writing. To be timely, a stockholder’s notice must be delivered to our
principal executive offices not later than the close of business on the 90th
day
and not earlier than the close of business on the 120th day, prior to the first
anniversary of the preceding year’s annual meeting of stockholders. For the
first annual meeting of stockholders after the closing of this offering, a
stockholder’s notice shall be timely if delivered to our principal executive
offices not later than the 90th day prior to the scheduled date of the annual
meeting of stockholders or the 10th day following the day on which public
announcement of the date of our annual meeting of stockholders is first made
or
sent by us. Our bylaws also specify certain requirements as to the form and
content of a stockholders’ meeting. These provisions may preclude our
stockholders from bringing matters before our annual meeting of stockholders
or
from making nominations for directors at our annual meeting of
stockholders.
94
Limitation
on Liability and Indemnification of Directors and Officers
Our
amended and restated certificate of incorporation provides that our directors
and officers will be indemnified by us to the fullest extent authorized by
Delaware law as it now exists or may in the future be amended. In addition,
our
amended and restated certificate of incorporation provides that our directors
will not be personally liable for monetary damages to us for breaches of
their
fiduciary duty as directors, unless they violated their duty of loyalty to
us or
our stockholders, acted in bad faith, knowingly or intentionally violated
the
law, authorized unlawful payments of dividends, unlawful stock purchases
or
unlawful redemptions, or derived an improper personal benefit from their
actions
as directors.
Our
bylaws permit us to secure insurance on behalf of any officer, director or
employee for any liability arising out of his or her actions, regardless of
whether Delaware law would permit indemnification. We will purchase a policy
of
directors’ and officers’ liability insurance that insures our directors and
officers against the cost of defense, settlement or payment of a judgment in
some circumstances and insures us against our obligations to indemnify the
directors and officers.
These
provisions may discourage stockholders from bringing a lawsuit against our
directors for breach of their fiduciary duty. These provisions also may have
the
effect of reducing the likelihood of derivative litigation against directors
and
officers, even though such an action, if successful, might otherwise benefit
us
and our stockholders. Furthermore, a stockholder’s investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification provisions. We believe
that these provisions, the insurance and the indemnity agreements are necessary
to attract and retain talented and experienced directors and
officers.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion
of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Shares
Eligible For Future Sale
Immediately
after the completion of this offering, we will have 38,625,000 shares of common
stock (including 1,125,000 shares that are subject to forfeiture to the extent
the underwriters’ over-allotment option is not exercised) outstanding (or
43,125,000 shares if the underwriters’ over-allotment option is exercised in
full). Of these shares, the 30,000,000 shares sold in this offering
(or 34,500,000 shares if the over-allotment option is exercised in full) will
be
freely tradable without restriction or further registration under the Securities
Act, except for any shares purchased by one of our affiliates within the meaning
of Rule 144 under the Securities Act. All of the remaining 8,625,000
shares (7,500,000 shares if the underwriters’ over-allotment option is not
exercised) are restricted securities under Rule 144, in that they were issued
in
private transactions not involving a public offering. None of these
shares will be eligible for sale under Rule 144 prior to July 13,
2008. Notwithstanding this restriction, except in limited
circumstances, (i) the private placement warrants will not be transferable
until
after the consummation of our initial business combination and (ii) the shares
of common stock issued to the existing stockholders will not be transferable
until one year following the consummation of our initial business
combination. For more information about these exceptions, see the
section entitled “Principal Stockholders.”
In
addition, immediately prior to the consummation of our initial business
combination, our sponsor will purchase 2,000,000 co-investment units at
a
purchase price of $10.00 per unit ($20,000,000 in the aggregate). The
co-investment units, co-investment common stock and co-investment warrants,
with
limited exceptions, will not be transferable for one year after the date
of our
initial business combination. Additionally, the warrants
included in the co-investment units are (1) exercisable only after the
date on
which the last sales price of our common stock on the American Stock Exchange,
or other national securities exchange on which our common stock may be
traded,
equals or exceeds $14.25 per share for any 20 trading
95
days
within any 30-trading-day period beginning at least 90 calendar days after
the
consummation of our initial business combination, (2) exercisable on a
cashless
basis so long as they are held by the original purchaser or its permitted
transferees and (3) not subject to redemption by us.
Rule
144
In
general, under Rule 144 as currently in effect, a person who has beneficially
owned restricted shares of our common stock for at least one year would be
entitled to sell within any three-month period a number of shares that does
not
exceed the greater of either of the following:
•
1%
of the number of shares of common stock then outstanding, which will
equal
375,000 shares immediately after this offering (or 431,250 if the
underwriters exercise their over-allotment option in full);
and
•
the
average weekly trading volume of the common stock during the four
calendar
weeks preceding the filing of a notice on Form 144 with respect to
the
sale.
Sales
under Rule 144 are also limited by manner of sale provisions and notice
requirements and to the availability of current public information about
us.
Rule
144(k)
Under
Rule 144(k), a person who is not
deemed to be one of our affiliates at the time of, or at any time during the
three months preceding, a sale and who has beneficially owned the restricted
shares proposed to be sold for at least two years, including the holding period
of any prior owner other than an affiliate, is entitled to sell those shares
without complying with the manner of sale, public information, volume limitation
or notice provisions of Rule 144.
SEC
Position on Rule 144 Sales
The
SEC
has taken the position that a promoter or affiliate of a blank check company
and
any of its transferees, both before and after a business combination, would
act
as an “underwriter” under the Securities Act when reselling the
securities of a blank check company acquired prior to the completion of its
initial public offering. Accordingly, the SEC believes that those
securities can be resold only through a registered offering and that Rule 144
would not be available for those resale transactions despite technical
compliance with the requirements of Rule 144.
Registration
Rights
Our
sponsor will be entitled to make up to three demands that we register the
8,625,000 shares of common stock (including 1,125,000 shares of common stock
that are subject to forfeiture to the extent the underwriters’ over-allotment
option is not exercised), the 8,000,000 private placement warrants and the
shares for which they are exercisable, and the 2,000,000 co-investment shares
and the 2,000,000 co-investment warrants and the shares of common stock for
which they are exercisable, pursuant to an agreement to be signed prior to
the
date of this prospectus. Our sponsor may elect to exercise its
registration rights at any time beginning on the date three months prior
to the
expiration of the applicable transfer restrictions. The restricted
transfer period for the shares and the co-investment shares of common stock
expires on the date that is one year after the consummation of the initial
business combination, and the restricted transfer period for the private
placement warrants and the shares for which they are exercisable expires
on the
consummation of our initial business combination. Our directors will
have “piggy-back” registration rights with respect to the share of common stock
that they own prior to the completion of this offering, subject to the same
limitations with respect to the transfer restriction period. In addition,
our
sponsor and our directors each have certain “piggy-back” registration rights
with respect to the shares held by them on registration statements filed
by us
on or
96
subsequent to the expiration of the applicable transfer
restriction period and unlimited registration rights with respect to a
registration statement on Form S-3. We will bear the expenses
incurred in connection with the filing of any registration
statement. Pursuant to the registration rights agreement, our sponsor
and our executive officers and directors will waive any claims to monetary
damages for any failure by us to comply with the requirements of the
registration rights agreement.
Listing
We
have
applied to have our units listed on the American Stock Exchange under the symbol
“NAQ.U” and, once the common stock and warrants begin separate trading, to have
our common stock and warrants listed on the American Stock Exchange under the
symbols “NAQ” and “NAQ.WS,” respectively.
Based
upon the proposed terms of this offering, after giving effect to this offering
we expect to meet the minimum initial listing standards set forth in Section
101(c) of the American Stock Exchange Company Guide, which consist of the
following:
•
Stockholders
equity of at least $4.0 million;
•
Total
market capitalization of at least $50.0
million;
•
Aggregate
market value of publicly held shares of at least $15.0
million;
•
Minimum
public distribution of at least 1,000,000 units with a minimum of
400
public holders; and
•
A
minimum market price of $2.00 per
unit.
97
UNITED
STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS
The
following is a general discussion of material United States federal tax
consequences of the acquisition, ownership, and disposition of our units, common
stock and warrants purchased pursuant to this offering. This
discussion assumes that holders will hold our securities issued pursuant to
this
offering as capital assets within the meaning of the Internal Revenue Code
of
1986, as amended, which we refer to as the Code. This discussion does
not address all aspects of United States federal taxation that may be relevant
to a particular investor in light of the investor’s individual investment or tax
circumstances. In addition, this discussion does not address (a)
United States gift or estate tax laws except to the limited extent set forth
below, (b) state, local or non-United States tax consequences, (c) the special
tax rules that may apply to certain investors, including without limitation
banks, insurance companies, financial institutions, broker-dealers, taxpayers
that have elected mark-to-market accounting, taxpayers that are subject to
the
alternative minimum tax, tax-exempt entities, regulated investment companies,
real estate investment trusts, taxpayers whose functional currency is not the
United States dollar, or United States expatriates or former long-term residents
of the United States, or (d) the special tax rules that may apply to an investor
that acquires, holds, or disposes of our securities as part of a straddle,
hedge, wash sale (except to the limited extent described below), constructive
sale, or conversion transaction or other integrated
investment. Additionally, the discussion does not consider the tax
treatment of partnerships (including entities treated as partnerships for United
States federal income tax purposes) or pass-through entities or persons who
hold
our units, common stock or warrants through such entities.
This
discussion is based on current provisions of the Code, final, temporary and
proposed United States Treasury Regulations, judicial opinions, and published
positions of the Internal Revenue Service, which we refer to as the IRS, all
as
in effect on the date hereof and all of which are subject to differing
interpretations or change, possibly with retroactive effect. We have
not sought, and will not seek, any ruling from the IRS or any opinion of counsel
with respect to the tax consequences discussed herein, and there can be no
assurance that the IRS will not take a position contrary to the tax consequences
discussed below or that any position taken by the IRS would not be
sustained.
As
used
in this discussion, the term “United States person” means a person that is, for
United States federal income tax purposes (i) an individual citizen or resident
of the United States, (ii) a corporation (or other entity treated as a
corporation for United States federal income tax purposes) created or organized
in the United States or under the laws of the United States, any state thereof,
or the District of Columbia, (iii) an estate the income of which is subject
to
United States federal income taxation regardless of its source, or (iv) a trust
if (A) a court within the United States is able to exercise primary supervision
over the administration of the trust and one or more United States persons
have
the authority to control all substantial decisions of the trust, or (B) it
has
in effect a valid election to be treated as a United States
person. As used in this prospectus, the term “United States holder”
means a beneficial owner of our securities that is a United States person and
the term “non-United States holder” means a beneficial owner of our securities
(other than a partnership or other entity treated as a partnership or as a
disregarded or pass-through entity for United States federal income tax
purposes) that is not a United States person.
The
tax
treatment of a partnership and each partner thereof will generally depend upon
the status and activities of the partnership and such partner. A holder that
is
treated as a partnership for United States federal income tax purposes should
consult its own tax advisor regarding the United States federal income tax
considerations applicable to it and its partners of the purchase, ownership
and
disposition of our units, common stock and warrants.
This
discussion is only a summary of material United States federal income and estate
tax consequences of the acquisition, ownership and disposition of our
securities. Investors are urged to consult their own tax advisors
with respect to the particular tax consequences to them of the acquisition,
ownership and disposition of our securities, including the effect of any United
States federal tax laws other than income and estate tax laws, any state, local
or non-United States tax laws, and any applicable tax treaty.
98
General
There
is
no authority addressing the treatment, for United States federal income tax
purposes, of securities with terms substantially the same as the units, and,
therefore, such treatment is not entirely clear. We intend to treat each unit
for United States federal income tax purposes as an investment unit consisting
of one share of our common stock and a warrant to acquire one share of our
common stock. Pursuant to this treatment, each holder of a unit must allocate
the purchase price paid by such holder for such unit between the share of common
stock and the warrant based on their respective relative fair market values.
In
addition, pursuant to this treatment, a holder’s initial tax basis in the common
stock and the warrant included in each unit should equal the portion of the
purchase price of the unit allocated thereto.
Our
view
of the characterization of the units described above and a holder’s purchase
price allocation are not, however, binding on the IRS or the courts. Because
there are no authorities that directly address instruments that are similar
to
the units, no assurance can be given that the IRS or the courts will agree
with
the characterization described above or the discussion below. Accordingly,
prospective investors are urged to consult their own tax advisors regarding
the
United States federal tax consequences of an investment in a unit (including
alternative characterizations of a unit) and with respect to any tax
consequences arising under the laws of any state, local or non-United States
taxing jurisdiction. Unless otherwise stated, the following discussions are
based on the assumption that the characterization of the units and the
allocation described above are accepted for United States federal tax
purposes.
Tax
Consequences of an Investment in our Common Stock
Dividends
and Distributions
If
we pay
cash distributions to holders of shares of our common stock, such distributions
generally will constitute dividends for United States federal income tax
purposes to the extent paid from our current or accumulated earnings and
profits, as determined under United States federal income tax
principles. Distributions in excess of current and accumulated
earnings and profits will constitute a return of capital that will be applied
against and reduce (but not below zero) the holder’s adjusted tax basis in our
common stock. Any remaining excess will be treated as gain realized
on the sale or other disposition of the common stock and will be treated as
described under “—Gain or Loss on Sale, Exchange or Other Taxable Disposition of
Common Stock” below.
Any
dividends we pay to a United States holder that is a taxable corporation
generally will qualify for the dividends received deduction if the requisite
holding period is satisfied. With certain exceptions (including but
not limited to dividends treated as investment income for purposes of investment
interest deduction limitations), and provided certain holding period
requirements are met, qualified dividends received by a non-corporate United
States holder generally will be subject to tax at the maximum tax rate accorded
to capital gains for taxable years beginning on or before December 31, 2010,
after which the rate applicable to dividends is scheduled to return to the
tax
rate generally applicable to ordinary income. There is substantial
uncertainty, however, as to whether the conversion rights with respect to the
common stock, described above under “Proposed Business—Consummating an Initial
Business Combination—Conversion Rights”, may prevent a United States holder from
satisfying the applicable holding period requirements with respect to the
dividends received deduction or the capital gains tax rate, as the case may
be.
Dividends
paid to a non-United States holder that are not effectively connected with
the
non-United States holder’s conduct of a trade or business in the United States
generally will be subject to withholding of United States federal income tax
at
the rate of 30% or such lower rate as may be specified by an applicable income
tax treaty. A non-United States holder who wishes to claim the benefit of an
applicable income tax treaty withholding rate and avoid backup withholding,
as
discussed below, for dividends will be required to (1) complete IRS Form
W-8BEN (or other applicable form) and certify under penalties of perjury that
such holder is not a United States person as defined under the Code and is
eligible for the benefits of the applicable
99
income
tax treaty or (2) if our common stock is held through certain foreign
intermediaries, satisfy the relevant certification requirements of applicable
Treasury Regulations. These forms must be periodically updated. Non-United
States holders should consult their tax advisors regarding their entitlement
to
benefits under an applicable income tax treaty and the manner of claiming
the
benefits of such treaty (including, without limitation, the need to obtain
a
United States taxpayer identification number). In addition, if we determine
that
we are likely to be classified as a “United States real property holding
corporation” (see “—Gain or Loss on Sale, Exchange or Other Taxable Disposition
of Common Stock” below), we currently intend to withhold 10% of any distribution
that exceeds our current and accumulated earnings and profits, which withheld
amount may be claimed by the non-United States holder as a credit against
the
non-United States holder’s United States federal income tax
liability.
Dividends
that are effectively connected with a non-United States holder’s conduct of a
trade or business in the United States and, if provided in an applicable income
tax treaty, that are attributable to a permanent establishment or fixed base
maintained by the non-United States holder in the United States are subject
to
United States federal income tax on a net income basis at generally applicable
United States federal income tax rates and are not subject to the United States
withholding tax, provided that the non-United States holder establishes an
exemption from such withholding by complying with certain certification and
disclosure requirements. Any effectively connected dividends or dividends
attributable to a permanent establishment received by a non-United States holder
that is treated as a foreign corporation for United States federal income tax
purposes may be subject to an additional “branch profits tax” at a 30% rate, or
such lower rate as may be specified by an applicable income tax
treaty.
A
non-United States holder eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by timely filing an appropriate claim for refund with
the IRS.
Gain
or Loss on Sale, Exchange or Other Taxable Disposition of Common
Stock
In
general, a United States holder must treat any gain or loss recognized upon
a
sale, exchange or other taxable disposition of a share of our common stock
(which would include a liquidation in the event we do not consummate a business
combination within the required timeframe) as capital gain or
loss. Any such capital gain or loss will be long-term capital gain or
loss if the United States holder’s holding period with respect to the common
stock so disposed of exceeds one year. There is substantial
uncertainty, however, as to whether the conversion rights with respect to
the
common stock, described above under “Proposed Business—Consummating an Initial
Business Combination—Conversion Rights”, may prevent a United States holder from
satisfying the applicable holding period requirements. In general, a
United States holder will recognize gain or loss in an amount equal to the
difference between (i) the sum of the amount of cash and the fair market
value
of any property received in such disposition (or, if the common stock is
held as
part of a unit at the time of disposition of the unit, the portion of the
amount
realized on such disposition that is allocated to the common stock based
upon
the then fair market value of such common stock) and (ii) the United States
holder’s adjusted tax basis in the share of common stock. A United
States holder’s adjusted tax basis in the common stock generally will equal the
United States holder’s acquisition cost (that is, as discussed above, the
portion of the purchase price of a unit allocated to that common stock) less
any
prior return of capital. Long-term capital gain realized by a
non-corporate United States holder generally will be subject to a maximum
rate
of 15% for tax years beginning on or before December 31, 2010, after which
the
maximum long-term capital gains tax rate is scheduled to increase to
20%. The deduction of capital losses is subject to limitations, as is
the deduction for losses upon a taxable disposition by a United States holder
of
our common stock (whether or not held as part of a unit) if, within a period
beginning 30 days before the date of such disposition and ending 30 days
after
such date, such United States holder has acquired (by purchase or by an exchange
on which the entire amount of gain or loss was recognized by law), or has
entered into a contract or option so to acquire, substantially identical
stock
or securities.
100
Any
gain
realized by a non-United States holder upon a sale, exchange or other taxable
disposition of our common stock (whether or not held as part of a unit at the
time of the sale, exchange, or other taxable disposition) generally will not
be
subject to United States federal income tax unless: (1) the gain is
effectively connected with a trade or business of the non-United States holder
in the United States (and, if required by an applicable income tax treaty,
is
attributable to a United States permanent establishment or fixed base of the
non-United States holder), (2) the non-United States holder is an
individual who is present in the United States for 183 days or more in the
taxable year of that disposition, and certain other conditions are met, or
(3) we are or have been a “United States real property holding corporation”
for United States federal income tax purposes at any time during the shorter
of
the five-year period ending on the date of disposition or the period that the
non-United States holder held the common stock, and, in the case where the
shares of our common stock are regularly traded on an established securities
market, the non-United States holder owns or has owned, or is treated as owning,
more than 5% of our common stock at any time during the five-year period ending
on the date of disposition. Special rules may apply to the
determination of the 5% threshold described in clause (3) of the preceding
sentence in the case of a holder of a warrant (whether or not held as part
of a
unit). As a result, holders of warrants are urged to consult their
own tax advisors regarding the effect of holding the warrants on the calculation
of such 5% threshold.
Net
gain
realized by a non-United States holder described in clauses (1) and (3) of
the preceding paragraph will be subject to tax at generally applicable United
States federal income tax rates. Any gains of a foreign corporation non-United
States holder described in clause (1) of the preceding paragraph may also
be subject to an additional “branch profits tax” at a 30% rate, or such lower
rate as may be specified by an applicable income tax treaty. Gain realized
by an
individual non-United States holder described in clause (2) of such
paragraph (which may be offset by United States source capital losses) will
be
subject to a flat 30% tax, even though the individual is not considered a
resident of the United States. The gross proceeds from transactions that
generate gains described in clause (3) of the preceding paragraph will generally
be subject to a 10% withholding tax, which may be claimed by the non-United
States holder as a credit against the non-United States holder’s United States
federal income tax liability.
We
do not
believe that we currently are a “United States real property holding
corporation”. Moreover, we cannot yet determine whether we will be a “United
States real property holding corporation” for United States federal income tax
purposes, and will be unable to do so until we effect a business combination.
A
corporation is a “United States real property holding corporation” if the fair
market value of its United States real property interests equals or exceeds
50%
of the sum of the fair market value of its worldwide real property interests
plus its other assets used or held for use in a trade or business.
Conversion
of Common Stock
In
the
event that a holder converts common stock into a right to receive cash pursuant
to the exercise of a conversion right, the transaction will be treated for
United States federal income tax purposes as a redemption of the common
stock. If the conversion qualifies as a sale of common stock by a
holder under Section 302 of the Code, the holder will be treated as described
under “—Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common
Stock” above. If the conversion does not qualify as a sale of common
stock under the Code, a holder will be treated as receiving a corporate
distribution with the tax consequences described below. Whether the
conversion qualifies for sale treatment will depend largely on the total number
of shares of our common stock treated as held by the holder (including any
common stock constructively owned by the holder as a result of, among other
things, owning warrants). The conversion of common stock generally
will be treated as a sale or exchange of the common stock (rather than as a
corporate distribution) if the receipt of cash upon the conversion (1) is
“substantially disproportionate” with respect to the holder, (2) results in a
“complete termination” of the holder’s interest in us or (3) is “not essentially
equivalent to a dividend” with respect to the holder. These tests are
explained more fully below.
In
determining whether any of the foregoing tests are satisfied, a holder takes
into account not only stock actually owned by the holder, but also shares of
our
stock that are constructively owned by it. A holder
101
may
constructively own, in addition to stock owned directly, stock owned by certain
related individuals and entities in which the holder has an interest or that
have an interest in such holder, as well as any stock the holder has a right
to
acquire by exercise of an option, which would generally include common stock
which could be acquired pursuant to the exercise of the warrants. In
order to meet the substantially disproportionate test, the percentage of
our
outstanding voting stock actually and constructively owned by the holder
immediately following the conversion of common stock must, among other
requirements, be less than 80% of the percentage of our outstanding voting
stock
actually and constructively owned by the holder immediately before the
conversion. There will be a complete termination of a holder’s
interest if either (1) all of the shares of our stock actually and
constructively owned by the holder are converted or (2) all of the shares
of our
stock actually owned by the holder are converted and the holder is eligible
to
waive, and effectively waives in accordance with specific rules, the attribution
of stock owned by certain family members and the holder does not constructively
own any other stock. The conversion of the common stock will not be
essentially equivalent to a dividend if a holder’s conversion results in a
“meaningful reduction” of the holder’s proportionate interest in
us. Whether the conversion will result in a meaningful reduction in a
holder’s proportionate interest will depend on the particular facts and
circumstances. However, the IRS has indicated in a published ruling
that even a small reduction in the proportionate interest of a small minority
stockholder in a publicly held corporation who exercises no control over
corporate affairs may constitute such a “meaningful
reduction.”
If
none
of the foregoing tests are satisfied, then the conversion will be treated as
a
corporate distribution and the tax effects will be as described above under
“—Dividends and Distributions”. After the application of those rules,
any remaining tax basis of the holder in the converted common stock will be
added to the holder’s adjusted tax basis in his remaining common stock, or, if
it has none, to the holder’s adjusted tax basis in its warrants or possibly in
other common stock constructively owned by it.
Persons
who actually or constructively own 5% or more of our stock (by vote or value)
may be subject to special reporting requirements with respect to a conversion
of
common stock.
Exercise
of a Warrant
Upon
its
exercise of a warrant, a holder will not be required to recognize taxable
gain
or loss with respect to the warrant. The holder’s tax basis in the
share of our common stock received by such holder generally will be an amount
equal to the sum of the holder’s initial investment in the warrant (i.e., the
portion of the holder’s purchase price for a unit that is allocated to the
warrant, as described above under “—General”) and the exercise price (i.e.,
initially, $7.50 per share of our common stock). The holder’s holding
period for the share of our common stock received upon exercise of the warrant
should begin on the date following the date of exercise (or possibly the
date of
exercise) of the warrant and will not include the period during which the
holder
held the warrant.
Sale,
Exchange, Redemption or Expiration of a Warrant
Upon
a
sale, exchange (other than by exercise) or redemption of a warrant, a United
States holder will be required to recognize taxable gain or loss in an amount
equal to the difference between (i) the amount realized upon such disposition
(or, if the warrant is held as part of a unit at the time of the disposition
of
the unit, the portion of the amount realized on the disposition of the unit
that
is allocated to the warrant based on the then fair market value of the warrant)
and (ii) the United States holder’s tax basis in the warrant (that is, the
portion of the United States holder’s purchase price for a unit that is
allocated to the warrant, as described above under “—General”). Upon
the expiration of a warrant (whether or not held as part of a unit at the time
of such expiration), a United States holder will be required to recognize a
taxable loss in an amount equal to the United States holder’s tax basis in the
warrant. Such gain or loss will generally be treated as capital gain
or loss and will be treated as long-term capital gain or loss if the warrant
was
held by the United States holder for more than one year at the time of such
disposition or expiration. As discussed above, the deductibility of
capital losses is subject to certain limitations, as is the deduction for losses
upon a taxable disposition by a United States holder of a warrant (whether
or
not held as part of a unit) if, within a period beginning 30 days
102
before
the date of such disposition and ending 30 days after such date, such United
States holder has acquired (by purchase or by an exchange on which the entire
amount of gain or loss was recognized by law), or has entered into a contract
or
option so to acquire, substantially identical stock or securities.
The
United States federal income tax treatment of a non-United States holder’s gains
recognized on a sale, exchange, redemption, or expiration of a warrant will
generally correspond to the United States federal income tax treatment of a
non-United States holder’s gains recognized on a taxable disposition of our
common stock, as described under “—Gain or Loss on Sale, Exchange or Other
Taxable Disposition of Common Stock” above.
Federal
Estate Tax
Shares
of
our common stock owned or treated as owned by an individual who is not a United
States citizen or resident of the United States (as specially defined for United
States federal estate tax purposes) at the time of death will be included in
the
individual’s gross estate for United States federal estate tax purposes unless
an applicable estate tax or other treaty provides otherwise, and therefore
may
be subject to United States federal estate tax. The foregoing will
also apply to warrants.
Information
Reporting and Backup Withholding
Under
United States Treasury Regulations, we must report annually to the IRS and
to
each holder the amount of dividends paid to such holder on our common stock
and
the tax withheld with respect to those dividends, regardless of whether
withholding was required. In the case of a non-United States holder,
copies of the information returns reporting those dividends and withholding
may
also be made available to the tax authorities in the country in which the
non-United States holder is a resident under the provisions of an applicable
income tax treaty or agreement.
The
gross
amount of dividends paid to a holder that fails to provide the appropriate
certification in accordance with applicable United States Treasury Regulations
generally will be reduced by backup withholding at the applicable rate
(currently 28%).
A
non-United States holder is required to certify its foreign status under
penalties of perjury or otherwise establish an exemption in order to avoid
information reporting and backup withholding on disposition proceeds where
the
transaction is effected by or through a United States office of a
broker. Such information reporting and backup withholding generally
will not apply to a payment of proceeds of a disposition of common stock where
the transaction is effected outside the United States through a foreign office
of a foreign broker. However, information reporting requirements, but
not backup withholding, generally will apply to such a payment if the broker
is
(i) a United States person, (ii) a foreign person that derives 50% or more
of
its gross income for certain periods from the conduct of a trade or business
in
the United States, (iii) a controlled foreign corporation as defined in the
Code; or (iv) a foreign partnership with certain United States connections,
unless the broker has documentary evidence in its records that the holder is
a
non-United States holder and certain conditions are met or the holder otherwise
establishes an exemption.
Backup
withholding is not an additional tax. Amounts that we withhold under
the backup withholding rules may be refunded or credited against the holder’s
United States federal income tax liability, if any, provided that certain
required information is furnished to the IRS in a timely manner.
Holders
should consult their own tax advisors regarding application of backup
withholding in their particular circumstance and the availability of and
procedure for obtaining an exemption from backup withholding under current
United States Treasury Regulations.
103
UNDERWRITING
We
intend
to offer the units described in this prospectus through the underwriters. Banc
of America Securities LLC is acting as sole manager of this offering and as
representative of the underwriters. We have entered into a firm commitment
underwriting agreement with the underwriters. Subject to the terms and
conditions of the underwriting agreement, we have agreed to sell to the
underwriters, and each underwriters has agreed to purchase, the number of units
listed next to its name in the following table:
Underwriters
Number of Units
Banc
of America Securities LLC
Total
30,000,000
The
underwriting agreement is subject to a number of terms and conditions and
provides that the underwriters must buy all of the units if they buy any of
them. The underwriters will sell the units to the public when and if the
underwriters buy the units from us.
The
underwriters initially will offer the units to the public at the initial public
offering price specified on the cover page of this prospectus. The underwriters
may allow a concession of not more than [$0.__] per unit to selected dealers.
The underwriters may also allow, and the dealers may re-allow, a concession
of
not more than [$0.__] per unit to some other dealers. If all the units that
the
underwriters have committed to purchase from us are not sold at the initial
public offering price, the underwriters may change the public offering price
and
the concession and discount to broker/dealers. The units are offered subject
to
a number of conditions, including:
•
receipt
and acceptance of the units by the underwriters;
and
•
the
underwriters’ right to reject orders in whole or in
part.
Option
to Purchase Additional Units
We
have
granted the underwriters an option to purchase up to 4,500,000 additional units
at the same price per unit as they are paying for the units shown in the table
above. These additional units would cover sales by the underwriters that exceed
the total number of units shown in the table above. The underwriters may
exercise this option at any time and from time to time, in whole or in part,
within 30 days after the date of this prospectus. To the extent that the
underwriters exercise this option, each underwriter will purchase additional
units from us in approximately the same proportion as it purchased the units
shown in the table above. We will pay the expenses associated with the exercise
of this option.
104
Discounts
and Commissions
The
following table shows the per unit and total underwriting discounts and
commissions to be paid to the underwriters by us. The amounts are shown assuming
no exercise and full exercise of the underwriters’ option to purchase additional
units.
Paid
by Us
Underwriting
Discount
No Exercise
Full Exercise
Per
Unit (1)
$0.40
$0.40
Total
(1)
$12,000,000
$13,800,000
(1)
The
total underwriting discount as a percentage of the gross offering
proceeds
is equal to 4.0%. This amount excludes deferred underwriting discounts
and
commissions equal to 3.0% of the gross proceeds, or $9,000,000
($10,350,000 if the underwriters’ over-allotment option is exercised in
full), or $0.30 per unit, which will be deposited in the trust account
and
which the underwriters have agreed to defer until the consummation
of our
initial business combination. These funds (less the amounts the
underwriters have agreed to forego with respect to any shares public
stockholders convert into cash pursuant to their conversion rights)
will
be released to the underwriters upon consummation of our initial
business
combination. If we do not consummate an initial business combination,
the
deferred underwriting discounts and commissions will not be paid
to the
underwriters and the full amount plus the retained interest thereon
will
be included in the amount available to our public stockholders upon
our
liquidation.
We
estimate that the expenses of the offering to be paid by us, not including
the
underwriting discounts and commissions, will be approximately
$750,000.
Listing
There
is
currently no market for our units, common stock or warrants. We anticipate
that
the units will be listed on the American Stock Exchange under the symbol NAQ.U
on or promptly after the date of this prospectus. Upon separate trading of
the
securities comprising the units, we anticipate that the common stock and the
warrants will be listed on the American Stock Exchange under the symbols NAQ
and
NAQ.WS, respectively.
Stabilization
In
connection with this offering, the underwriters may engage in activities that
stabilize, maintain or otherwise affect the price of our units,
including:
•
stabilizing
transactions;
•
short
sales;
•
syndicate
covering transactions;
•
imposition
of penalty bids; and
•
purchases
to cover positions created by short
sales.
Stabilizing
transactions consist of bids or purchases made for the purpose of preventing
or
retarding a decline in the market price of our units while this offering is
in
progress. Stabilizing transactions may include making short sales of our units,
which involves the sale by the underwriters of a greater number of units than
they are required to purchase in this offering, and purchasing units from us
or
on the open market to cover positions created by short sales. Short sales may
be
“covered” shorts, which are short positions in an amount
105
not
greater than the underwriters’ option to purchase additional units referred to
above, or may be “naked” shorts, which are short positions in excess of that
amount. Syndicate covering transactions involve purchases of our common stock
in
the open market after the distribution has been completed in order to cover
syndicate short positions.
The
underwriters may close out any covered short position either by exercising
their
option to purchase additional units, in whole or in part, or by purchasing
units
in the open market. In making this determination, the underwriters will
consider, among other things, the price of units available for purchase in
the
open market compared to the price at which the underwriters may purchase units
through the over-allotment option.
A
naked
short position is more likely to be created if the underwriters are concerned
that there may be downward pressure on the price of the units in the open market
that could adversely affect investors who purchased in this offering. To the
extent that the underwriters create a naked short position, they will purchase
units in the open market to cover the position.
The
representative also may impose a penalty bid on underwriters and dealers
participating in the offering. This means that the representative may reclaim
from any syndicate members or other dealers participating in the offering the
underwriting discount or selling concession on units sold by them and purchased
by the representative in stabilizing or short covering
transactions.
These
activities may have the effect of raising or maintaining the market price of
our
units or preventing or retarding a decline in the market price of our units.
As
a result of these activities, the price of our units may be higher than the
price that otherwise might exist in the open market. If the underwriters
commence these activities, they may discontinue them at any time. The
underwriters may carry out these transactions on the American Stock Exchange,
in
the over-the-counter market or otherwise.
Pursuant
to Regulation M promulgated under the Securities Exchange Act, the distribution
of the units will end and this offering will be completed when all of the
units,
including any over-allotted units, have been distributed. Because the
underwriters have agreed that they may only exercise the over-allotment option
to cover any short position that they may have, exercise of the
over-allotment option by the underwriters will not affect the completion
of the
distribution of the units.
Discretionary
Accounts
The
underwriters have informed us that they do not expect to make sales to accounts
over which they exercise discretionary authority in excess of 5% of the
units.
IPO
Pricing
Prior
to
this offering, there has been no public market for our common stock. The initial
public offering price was negotiated between us and the underwriters. Among
the
factors considered in these negotiations were:
•
the
history of, and prospects for companies whose principal business
is the
acquisition of other businesses;
•
prior
offerings of those companies;
•
our
prospects for acquiring an operating business at attractive
values;
•
our
capital structure;
106
•
an
assessment of our executive officers and their experience in identifying
target businesses and structuring
acquisitions;
•
general
conditions of the securities markets at the time of the
offering;
•
the
likely competition for target
businesses;
•
the
likely number of potential targets;
and
•
our
executive officers’ estimate of our operating expenses for the next 24
months.
Lock-up
Agreement
Our
executive officers, directors and existing stockholders have entered into
a
lock-up agreement with the underwriters. Under the terms of this agreement,
and
other than in respect of the co-investment units, we may not issue any
new
units, shares of common stock or warrants, or publicly announce the intention
to
do any of the foregoing, without the prior written consent of Banc of America
Securities LLC, until or in connection with the consummation of our initial
business combination. Additionally, subject to certain exceptions,
our executive officers, directors and existing stockholders have agreed
not to
enter into any agreement to sell or transfer any of their common stock
held
prior to the completion of this offering, if any, until one year after
the
consummation of our initial business combination, and any of their private
placement warrants, if any, until after the consummation of our initial
business
combination. These exceptions include transfers to family members, affiliates,
charitable organizations and trusts for estate planning purposes, transfers
to
our other officers and directors, transfers pursuant to a qualified domestic
relations order and in the event of a merger, capital stock exchange, stock
purchase, asset acquisition or other similar transaction which results
in all of
our stockholders having the right to exchange their shares of common stock
or
other securities for cash, securities or other property subsequent to our
consummation of our intial business combination. This consent may be given
at any time without public notice. However, if (1) during the last 17 days
of
the applicable lock-up period, we issue material news or a material event
relating to us occurs or (2) before the expiration of the applicable lock-up
period, we announce that material news or a material event will occur during
the
16-day period beginning on the last day of the applicable lock-up period,
the
applicable lock-up period will be extended for up to 18 days beginning
on the
issuance of the material news or the occurrence of the material
event.
Selling
Restrictions
Each
underwriter intends to comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers securities or
has
in its possession or distributes this prospectus.
In
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a “Relevant Member State”), with
effect from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State an offer of the securities to the
public may not be made in that Relevant Member State prior to the publication
of
a prospectus in relation to the securities which has been approved by the
competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that an offer to the public in that Relevant Member State
of
any securities may be made at any time under the following exemptions under
the
Prospectus Directive if they have been implemented in the Relevant Member
State:
(a) to
legal entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is solely
to invest in securities;
(b) to
any legal entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance sheet of more
than
€43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown
in its last annual or consolidated accounts; or
(c) in
any other circumstances falling within Article 3 (2) of the Prospectus
Directive,
107
provided
that no such offer of securities shall result in a requirement for the
publication by us or any underwriter of a prospectus pursuant to Article 3
of
the Prospectus Directive.
For
the
purposes of this provision, the expression an “offer of securities to the
public” in relation to any securities in any Relevant Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the securities to be offered so as to enable an investor
to decide to purchase or subscribe the securities, as the same may be varied
in
that Member State by any measure implementing the Prospectus Directive in that
Member State and the expression Prospectus Directive means Directive 2003/71/EC
and includes any relevant implementing measure in each Relevant Member
State.
No
prospectus (including any amendment, supplement or replacement thereto) has
been
prepared in connection with the offering of the securities that has been
approved by the Autorité des marchés financiers or by the competent authority of
another State that is a contracting party to the Agreement on the European
Economic Area and notified to the Autorité des marchés financiers; no securities
have been offered or sold and will be offered or sold, directly or indirectly,
to the public in France except to permitted investors (“Permitted Investors”)
consisting of persons licensed to provide the investment service of portfolio
management for the account of third parties, qualified investors (investisseurs
qualifiés) acting for their own account and/or investors belonging to a limited
circle of investors (cercle restreint d’investisseurs) acting for their own
account, with “qualified investors” and “limited circle of investors” having the
meaning ascribed to them in Articles L. 411-2, D. 411-1, D. 411-2, D. 411-4,
D.
734-1, D. 744-1, D. 754-1 and D. 764-1 of the French Code Monétaire et Financier
and applicable regulations thereunder; none of this prospectus or any
other materials related to the offering or information contained therein
relating to the securities has been released, issued or distributed to the
public in France except to Permitted Investors; and the direct or
indirect resale to the public in France of any securities acquired by any
Permitted Investors may be made only as provided by Articles L. 411-1, L. 411-2,
L. 412-1 and L. 621-8 to L. 621-8-3 of the French Code Monétaire et Financier
and applicable regulations thereunder.
In
addition:
•
an
invitation or inducement to engage in investment activity (within
the
meaning of Section 21 of the Financial Services and Markets Act 2000
(the
“FSMA”)) has only been communicated or caused to be
communicated and will only be communicated or caused to be communicated
)
in connection with the issue or sale of the securities in circumstances
in
which Section 21(1) of the FSMA does not apply to us;
and
•
all
applicable provisions of the FSMA have been complied with and will
be
complied with, with respect to anything done in relation to the
securities in, from or otherwise involving the United
Kingdom.
This
document is only being distributed to and is only directed at (i) persons who
are outside the United Kingdom or (ii) to investment professionals falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other
persons to whom it may lawfully be communicated, falling within Article 49(2)(a)
to (d) of the Order (all such persons together being referred to as “relevant
persons”). The securities are only available to, and any invitation,
offer or agreement to subscribe, purchase or otherwise acquire such securities
will be engaged in only with, relevant persons. Any person who is not
a relevant person should not act or rely on this document or any of its
contents.
The
offering of the units has not been cleared by the Italian Securities Exchange
Commission (Commissione Nazionale per le Società e la Borsa, the “CONSOB”)
pursuant to Italian securities legislation and, accordingly, the units may
not
and will not be offered, sold or delivered, nor may or will copies of the
prospectus or any other documents relating to the units be distributed in Italy,
except (i) to professional investors (operatori qualificati), as
defined in Article 31, second paragraph, of CONSOB Regulation No.
108
11522
of
July 1, 1998, as amended, (the “Regulation No. 11522”), or (ii) in other
circumstances which are exempted from the rules on solicitation of investments
pursuant to Article 100 of Legislative Decree No. 58 of February 24, 1998 (the
“Financial Service Act”) and Article 33, first paragraph, of CONSOB Regulation
No. 11971 of May 14, 1999, as amended.
Any
offer, sale or delivery of the units or distribution of copies of the prospectus
or any other document relating to the units in Italy may and will be effected
in
accordance with all Italian securities, tax, exchange control and other
applicable laws and regulations, and, in particular, will be: (i) made by an
investment firm, bank or financial intermediary permitted to conduct such
activities in Italy in accordance with the Financial Services Act, Legislative
Decree No. 385 of September 1, 1993, as amended (the “Italian Banking Law”),
Regulation No. 11522, and any other applicable laws and regulations; (ii) in
compliance with Article 129 of the Italian Banking Law and the implementing
guidelines of the Bank of Italy; and (iii) in compliance with any other
applicable notification requirement or limitation which may be imposed by CONSOB
or the Bank of Italy.
Any
investor purchasing the units in the offering is solely responsible for ensuring
that any offer or resale of the units it purchased in the offering occurs in
compliance with applicable laws and regulations.
This
prospectus and the information contained herein are intended only for the use
of
its recipient and, unless in circumstances which are exempted from the rules
on
solicitation of investments pursuant to Article 100 of the “Financial Service
Act” and Article 33, first paragraph, of CONSOB Regulation No. 11971 of May 14,
1999, as amended, is not to be distributed, for any reason, to any third party
resident or located in Italy. No person resident or located in Italy other
than
the original recipients of this document may rely on it or its
content.
Italy
has
only partially implemented the Prospectus Directive and the provisions regarding
“European Economic Area” above shall apply with respect to Italy only to the
extent that the relevant provisions of the Prospectus Directive have already
been implemented in Italy.
Insofar
as the requirements above are based on laws which are superseded at any time
pursuant to the implementation of the Prospectus Directive, such requirements
shall be replaced by the applicable requirements under the Prospectus
Directive.
Conflicts/Affiliates
The
underwriters and their affiliates have provided, and may in the future provide,
various investment banking, commercial banking and other financial services
for
certain of our affiliates for which services they have received, and may in
the
future receive, customary fees.
Indemnification
We
will
indemnify the underwriters against some liabilities, including liabilities
under
the Securities Act of 1933, as amended, and state securities legislation. If
we
are unable to provide this indemnification, we will contribute to payments
the
underwriters may be required to make in respect of those
liabilities.
LEGAL
MATTERS
Sidley
Austin llp will pass upon the validity of the securities offered in this
prospectus for us. Certain legal matters with respect to this
offering will be passed upon for the underwriters by Bingham McCutchen
LLP.
109
EXPERTS
The
financial statements of NRDC Acquisition Corp. as of July 13, 2007 and for
the
period from July 10, 2007 (date of inception) through July 13, 2007 appearing
in
this prospectus and in the registration statement have been included in this
prospectus and in the registration statement in reliance upon the report of
Goldstein Golub Kessler LLP , independent registered public accounting firm,
given on the authority of such firm as experts in accounting and auditing in
giving said reports.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
have
filed with the SEC a registration statement on Form S-1, which includes
exhibits, schedules and amendments, under the Securities Act, with respect
to
this offering of our securities. Although this prospectus, which
forms a part of the registration statement, contains all material information
included in the registration statement, parts of the registration statement
have
been omitted as permitted by rules and regulations of the SEC. We
refer you to the registration statement and its exhibits for further information
about us, our securities and this offering. The registration
statement and its exhibits, as well as our other reports filed with the SEC,
can
be inspected and copied at the SEC’s public reference room at 100 F Street,
N.E., Washington, D.C. 20549. The public may obtain information about
the operation of the public reference room by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains a web site at
http://www.sec.gov which contains the Form S-1 and other reports, proxy and
information statements and information regarding issuers that file
electronically with the SEC.
Report
of Independent Registered Public Accounting Firm
F-2
Financial
Statements
Balance
Sheet as of July 13, 2007
F-3
Statement
of Operations for the period from July 10, 2007 (inception) to July
13,
2007
F-4
Statement
of Stockholders’ Equity for the period from July 10, 2007 (inception) to
July 13, 2007
F-5
Statement
of Cash Flows for the period from July 10, 2007 (inception) to July
13,
2007
F-6
Notes
to Financial Statements for the period from July 10, 2007 (inception)
to
July 13, 2007
F-7
See
notes to financial
statements.
F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors and Stockholder
NRDC
Acquisition Corp.
We
have
audited the accompanying balance sheet of NRDC Acquisition Corp., a corporation
in the development stage, (the Company) as of July 13, 2007, and the related
statements of operations, stockholder’s equity and cash flows for the period
from July 10, 2007 (inception) to July 13, 2007. 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 audit.
We
conducted our audit 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 audit provides 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 NRDC Acquisition Corp. as of July
13, 2007, and the results of its operations and its cash flows for the period
from July 10, 2007 (inception) to July 13, 2007 in conformity with United States
generally accepted accounting principles.
Common
Stock, $0.0001 par value, 106,000,000 shares
authorized;
8,625,000 shares issued and outstanding
862
Additional
paid-in capital
24,138
Deficit
accumulated during the development stage
(731
)
Total
stockholder’s equity
24,269
Total
liabilities and stockholder’s equity
$
244,037
See
notes to financial statements.
F-3
NRDC
Acquisition Corp.
(a
corporation in the development stage)
Statement
of Operations
For
the period from July 10, 2007 (inception) to July 13, 2007
Formation
costs
$
731
Net
loss
$
(731
)
Basic
and diluted net loss per share
$
(0.00
)
Weighted
average shares outstanding – basic and diluted
8,625,000
See
notes
to financial statements.
F-4
NRDC
Acquisition Corp.
(a
corporation in the development stage)
Statement
of Stockholder’s Equity
For
the period from July 10, 2007 (Inception) to July 13, 2007
Deficit
Accumulated
Common
Stock
Additional
Paid-In
During
the Development
Stockholder’s
Shares
Amount
Capital
Stage
Equity
Sale
of shares at approximately $0.003 per share on July 13,
2007
8,625,000
$
862
$
24,138
$
25,000
Net
loss
—
—
—
$
(731
)
(731
)
Balances
at July 13, 2007
8,625,000
$
862
$
24,138
$
(731
)
$
24,269
See
notes
to financial statements.
F-5
NRDC
Acquisition Corp.
(a
corporation in the development stage)
Statement
of Cash Flows
For
the period from July 10, 2007 (Inception) to July 13, 2007
Cash
flows from operating activities:
Net
loss
$
(731
)
Adjustments
to reconcile net loss
to net cash used in operating activities
Increase
in accrued
expenses
731
Net
cash used in operating
activities
-
Cash
flows from financing activities:
Proceeds
from note payable to
affiliate
200,000
Proceeds
from sale of
stock
25,000
Net
cash provided by financing
activities
225,000
Net
increase in cash
225,000
Cash
at beginning of period
—
Cash
at end of period
$
225,000
Supplemental
schedule of non-cash financing activities
Accrual
of deferred offering costs
$
19,037
See
notes
to financial statements.
F-6
NRDC
ACQUISITION CORP.
(a
corporation in the development stage)
Notes
to Financial Statements
Note
1 — Organization and Nature of Business Operations
NRDC
Acquisition Corp. (the “Company”) is a blank check company incorporated on July
10, 2007 for the purpose of effecting a merger, capital stock exchange, stock
purchase, asset acquisition or other similar business combination with one
or
more existing operating businesses.
At
July
13, 2007, the Company had not commenced any operations. All activity through
July 13, 2007 relates to the Company’s formation and of the proposed public
offering described below. The Company has selected December 31 as its fiscal
year end.
The
Company’s ability to commence operations is contingent upon obtaining adequate
financial resources through a proposed public offering (“Proposed Offering”)
which is discussed in Note 3. The Company’s management has broad discretion with
respect to the specific application of the net proceeds of this Proposed
Offering, although substantially all of the net proceeds of the Proposed
Offering are intended to be applied toward effecting a merger, capital stock
exchange, stock purchase, asset acquisition or other similar business
combination. As used herein, a “Business Combination” shall mean the acquisition
of one or more businesses that at the time of the Company’s initial business
combination has a fair market value of at least 80.0% of the Company’s assets
held in the trust account excluding the deferred underwriting discounts and
commissions from the proposed offering of $9,000,000 ($10,350,000 if the
over-allotment option is exercised in full) and taxes payable.
Upon
closing of the Proposed Offering, approximately 98% of the proceeds ($295.0
million, or $338.1 million if the over-allotment option is exercised in full)
of
this offering will be placed in a trust account invested until the earlier
of
(i) the consummation of the Company’s first Business Combination or (ii) the
liquidation of the Company. The proceeds in the trust account include the
deferred underwriting discount of $9.0 million ($10.35 million if the
over-allotment option is exercised in full) that will be released to the
underwriters on completion of a Business Combination (subject to a $0.30
per
share reduction for public stockholders who exercise their conversion rights).
Interest (after taxes) earned on assets held in the trust account will remain
in
the trust account. However, up to $2.25 million of the after tax interest
earned on the trust account may be released to the Company to cover a
portion of the Company’s operating expenses.
The
Company will seek stockholder approval before it will effect any Business
Combination. “Public Stockholders” is defined as the holders of common stock
sold as part of the units in the Proposed Offering or in the aftermarket. The
Company will proceed with a Business Combination only if a majority of the
shares of common stock voted by the Public Stockholders are voted in favor
of
the Business Combination and Public Stockholders owning less than 30% of the
shares sold in the Public Offering vote against the Business Combination and
exercise their right to convert their shares into a pro rata share of the
aggregate amount then on deposit in the trust account and a majority of the
outstanding shares of the Company’s common stock vote in favor of an amendment
to the Company’s amended and restated certificate of incorporation to provide
for its perpetual existence.
If
a
Business Combination is approved and completed, Public Stockholders voting
against a Business Combination will be entitled to convert their stock into
a
pro rata share of the total amount on deposit in the trust account including
the
deferred underwriters’ discount, and including any interest earned on their
portion of the trust account, net of up to $2.25 million of the after
tax interest earned on the trust account which may be released to the
Company to cover a portion of the Company’s operating expenses. Public
Stockholders who
F-7
NRDC
ACQUISITION CORP.
(a
corporation in the development stage)
Notes
to Financial Statements
convert
their stock into their share of the trust account will continue to have the
right to exercise any warrants they may hold.
The
Company will liquidate and promptly distribute only to its Public Stockholders
the amount in the trust account, less any income taxes payable on interest
income, plus any remaining net assets if the Company does not effect a Business
Combination within 24 months after consummation of the Proposed Offering. 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 Proposed
Offering (assuming no value is attributed to the Warrants contained in the
units
to be offered in the Proposed Offering discussed in Note 3.)
Note
2 — Summary of Significant Accounting Policies
Loss
per Common Share
Loss
per
share is computed by dividing net loss applicable to common stockholders by
the
weighted average number of common shares outstanding for the
period.
Concentration
of credit risk
Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of cash accounts in a financial institution, which at times exceeds
the Federal depository insurance coverage of $100,000. The Company
has not experienced losses on these accounts and management believes the Company
is not exposed to significant risks on such accounts
Use
of Estimates
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 and disclosure of contingent 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.
Income
taxes
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 has recorded a
deferred tax asset for the tax effect of temporary differences of
$249. 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 July 13, 2007.
The
effective tax rate differs from the statutory rate of 34% due to the increase
in
the valuation allowance.
Deferred
offering costs
Deferred
offering costs consist of legal costs of $19,037 incurred through the balance
sheet date that are related to the Proposed Offering and that will be charged
to
capital upon completion of the Proposed Offering or charged to expense if the
Proposed Offering is not completed.
F-8
NRDC
ACQUISITION CORP.
(a
corporation in the development stage)
Notes
to Financial Statements
Recently
issued accounting pronouncements
The
Company does not believe that any recently issued, but not yet effective,
accounting pronouncements if currently adopted would have a material effect
on
the accompanying financial statements.
Note
3 — Proposed Public Offering
The
Proposed Offering calls for the Company to offer for public sale 30,000,000
units (“Units”) at a price of $10.00 per unit. Each Unit consists of one share
of the Company’s common stock, $0.0001 par value, and one warrant. Each warrant
will entitle the holder to purchase from the Company one share of common stock
at an exercise price of $7.50, commencing the later of the completion of a
Business Combination or one year from the date of this prospectus and expiring
four years from the date of this prospectus, unless earlier redeemed. The
warrants will be redeemable at the Company’s option, at a price of $0.01 per
warrant upon 30 days’ written notice after the warrants become exercisable, only
in the event that the last sale price of the common stock is at least $14.25
per
share for any 20 trading days within a 30 trading day period ending on the
third
business day prior to the date on which notice of redemption is
given.
In
accordance with the warrant agreement relating to the warrants to be sold and
issued in the Proposed Offering, the Company is only required to use its best
efforts to maintain the effectiveness of the registration statement covering
the
warrants. The Company will not be obligated to deliver securities,
and there are no contractual penalties for failure to deliver securities, if
a
registration statement is not effective at the time of
exercise. Additionally, in the event that a registration is not
effective at the time of exercise, the holder of such warrant shall not be
entitled to exercise such warrant and in no event (whether in the case of a
registration statement not being effective or otherwise) will the Company be
required to net cash settle the warrant exercise. Consequently, the
warrants may expire unexercised and unredeemed.
The
Company will pay the underwriters in the Proposed Offering an underwriting
discount of 7% of the gross proceeds of the Proposed
Offering. However, the underwriters have agreed that 3% of the
underwriting discounts will not be payable unless and until the Company
completes a Business Combination and have waived their right to receive such
payment upon the Company’s liquidation if it is unable to complete a Business
Combination.
Note
4 — Note Payable to Affiliate and Related Party
Transactions
The
Company issued an aggregate $200,000 unsecured promissory note to NRDC Capital
Management, LLC on July 13, 2007. The note is non-interest bearing and is
payable on the earlier of the consummation of the offering by the Company or
July 13, 2009. As of July 13, 2007, NRDC Capital Management, LLC, owned all
of
the outstanding equity interests in the Company.
Note
5 — Commitments
The
Company has agreed to pay up to $7,500 a month in total for office space and
general and administrative services to NRDC Real Estate Advisors, LLC, the
parent and sole member of NRDC Capital Management, LLC. Services will commence
on the effective date of the offering and will terminate upon the earlier of
(i)
the completion of the Business Combination, or (ii) the Company’s
liquidation.
NRDC
Capital Management, LLC, the Company’s sole stockholder, has agreed to acquire
warrants to purchase 8,000,000 shares of common stock from the Company at a
price of $1.00 per warrant for a total of $8,000,000 in a private placement
prior to the completion of this offering. NRDC Capital Management, LLC
F-9
NRDC
ACQUISITION CORP.
(a
corporation in the development stage)
Notes
to Financial Statements
has
further agreed that it will not sell or transfer these warrants until after
the
Company consummates a Business Combination.
Our
sponsor has agreed to purchase from us an aggregate of 2,000,000 of our units
at
a price of $10.00 per unit for an aggregate purchase price of $20,000,000 in
a
private placement that will occur immediately prior to the consummation of
our
initial business combination. Each unit will consist of one share of
common stock and one warrant.
Note
6 — Common Stock
As
of
July 13, 2007, 8,625,000 shares of common stock are outstanding, held by one
stockholder, NRDC Capital Management, LLC. On July 13, 2007, the Company issued
8,625,000 shares to NRDC Capital Management, LLC for $25,000 in cash, at an
average purchase price of approximately $0.003 per share. If the over-allotment
option is not exercised in full, NRDC Capital Management, LLC will forfeit
the
number of shares necessary to cause NRDC Capital Management, LLC to maintain
a
20% ownership of the common shares after the Proposed Offering. NRDC Capital
Management, LLC will forfeit 1,125,000 shares to the extent that the
underwriters’ over-allotment is not exercised.
Note
7 — Preferred Stock
The
Company is authorized to issue 5,000 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.
Note
8 — Subsequent Events
On September
4, 2007, the Company’s Board of Directors authorized a 6 for 5
stock split with respect to all outstanding shares of the Company’s common
stock. On September 4, 2007, the Company’s Certificate of
Incorporation was amended to increase the authorized shares of common stock
from
70,000,000 to 106,000,000 shares of common stock. All references in the
accompanying financial statements to the number of shares of stock have been
retroactively restated to reflect these transactions.
In
September 2007, the Company and underwriters amended certain terms of the
Proposed Offering. All disclosures herein reflect the amended
terms.
F-10
Until
[ ], 2007, all dealers that
effect transactions in these securities, whether or not participating in
this
offering, may be required to deliver a prospectus. This is in
addition to the dealers’ obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
No
dealer, salesperson, or any other person is authorized to give any information
or make any representations in connection with this offering other than those
contained in this prospectus and, if given or made, the information or
representations must not be relied upon as having been authorized by
us. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities by anyone in any jurisdiction
in
which the offer or solicitation is not authorized or is
unlawful.
$300,000,000
NRDC
ACQUISITION CORP.
30,000,000
Units
______________________________
Prospectus
[ ]
, 2007
______________________________
Banc
of America Securities LLC
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 13. Other
Expenses of Issuance and Distribution.
The
estimated expenses payable by us in connection with the offering described
in
this registration statement (other than underwriting discounts and commissions)
will be as follows:
Initial
Trustee’s fee
$
1,000
(1)
SEC
Registration Fee
18,536
FINRA filing
fee
60,875
American
Stock Exchange filing and listing fee
70,000
Accounting
fees and expenses
60,000
Printing
and engraving expenses
90,000
Directors
and Officers liability insurance premiums
300,000
(2)
Legal
fees and expenses
400,000
Miscellaneous
100,000
(3)
Total
1,100,411
(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 annual
fees of $_______ for acting as trustee, as transfer agent of the
registrant’s common stock, as warrant agent for the registrant’s
warrants.
(2)
This
amount represents the approximate amount of director and officer
liability
insurance premiums the registrant anticipates paying over two years
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
registrant in connection with the offering over and above those
specifically listed above, including distribution and mailing
costs.
Item 14. Indemnification
of Directors and Officers.
Our
second amended and restated certificate of incorporation provides that all
directors, officers, employees and agents of the registrant shall be entitled
to
be indemnified by us to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law.
Section 145
of the Delaware
General Corporation Law concerning indemnification of officers, directors,
employees and agents is set forth below.
“Section 145. Indemnification
of officers, directors, employees and agents; insurance.
A
corporation shall have power to indemnify any person who was or is a party
or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if
the
person acted in good faith and in a manner the person reasonably believed to
be
in or not opposed to the best interests of the corporation, and, with respect
to
any criminal action or proceeding, had no reasonable cause to believe the
person’s conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the corporation,
and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that the person’s conduct was unlawful.
II-1
A
corporation shall have power to indemnify any person who was or is a party
or is
threatened to be made a party to any threatened, pending or completed action
or
suit by or in the right of the corporation to procure a judgment in its favor
by
reason of the fact that the person is or was a director, officer, employee
or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys’
fees) actually and reasonably incurred by the person in connection with the
defense or settlement of such action or suit if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall
be
made in respect of any claim, issue or matter as to which such person shall
have
been adjudged to be liable to the corporation unless and only to the extent
that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
To
the
extent that a present or former director or officer of a corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b) of this section, or
in defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred by such person in connection therewith.
Any
indemnification under subsections (a) and (b) of this section (unless
ordered by a court) shall be made by the corporation only as authorized in
the
specific case upon a determination that indemnification of the present or former
director, officer, employee or agent is proper in the circumstances because
the
person has met the applicable standard of conduct set forth in subsections
(a) and (b) of this section. Such determination shall be
made, with respect to a person who is a director or officer at the time of
such
determination, (1) by a majority vote of the directors who are not parties
to such action, suit or proceeding, even though less than a quorum, or
(2) by a committee of such directors designated by majority vote of such
directors, even though less than a quorum, or (3) if there are no such
directors, or if such directors so direct, by independent legal counsel in
a
written opinion, or (4) by the stockholders.
Expenses
(including attorneys’ fees) incurred by an officer or director in defending any
civil, criminal, administrative or investigative action, suit or proceeding
may
be paid by the corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys’ fees)
incurred by former directors and officers or other employees and agents may
be
so paid upon such terms and conditions, if any, as the corporation deems
appropriate.
The
indemnification and advancement of expenses provided by, or granted pursuant
to,
the other subsections of this section shall not be deemed exclusive of any
other
rights to which those seeking indemnification or advancement of expenses may
be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such person’s official capacity and
as to action in another capacity while holding such office.
A
corporation shall have power to purchase and maintain insurance on behalf of
any
person who is or was director, officer, employee or agent of the corporation,
or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or
other enterprise against any liability asserted against such person and incurred
by such person in any such capacity, or arising out of such person’s status as
such, whether or not the corporation would have the power to indemnify such
person against such liability under this section.
For
purposes of this section, references to “the corporation” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority
to
II-2
indemnify
its directors, officers, and employees or agents, so that any person who is
or
was a director, officer, employee or agent of such constituent corporation,
or
is or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this section
with respect to the resulting or surviving corporation as such person would
have
with respect to such constituent corporation if its separate existence had
continued.
For
purposes of this section, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on a person with respect to any employee benefit plan; and references
to “serving at the request of the corporation” shall include any service as a
director, officer, employee or agent of the corporation which imposes duties
on,
or involves services by, such director, officer, employee or agent with respect
to an employee benefit plan, its participants or beneficiaries; and a person
who
acted in good faith and in a manner such person reasonably believed to be in
the
interest of the participants and beneficiaries of an employee benefit plan
shall
be deemed to have acted in a manner “not opposed to the best interests of the
corporation” as referred to in this section.
The
indemnification and advancement of expenses provided by, or granted pursuant
to,
this section shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee
or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
The
Court
of Chancery is hereby vested with exclusive jurisdiction to hear and determine
all actions for advancement of expenses or indemnification brought under this
section or under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. The Court of Chancery may summarily
determine a corporation’s obligation to advance expenses (including attorneys’
fees).”
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers, and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion
of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
of
expenses incurred or paid by a director, officer or controlling person in a
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to the court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Paragraph A
of Article Ninth of our second amended and restated certificate of
incorporation provides:
“The
Corporation, to the full extent permitted by Section 145 of the GCL, as amended
from time to time, shall indemnify all persons whom it may indemnify pursuant
thereto. Expenses (including attorneys’ fees) incurred by an officer
or director in defending any civil, criminal, administrative, or investigative
action, suit or proceeding for which such officer or director may be entitled
to
indemnification hereunder shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if
it shall ultimately be determined that he is not entitled to be indemnified
by
the Corporation as authorized hereby.”
Pursuant
to the Underwriting Agreement filed as Exhibit 1.1 to this Registration
Statement, we have agreed to indemnify the underwriters and the underwriters
have agreed to indemnify us against certain civil liabilities that may be
incurred in connection with this offering, including certain liabilities under
the Securities Act.
II-3
Item 15. Recent
Sales of Unregistered Securities.
Since
our
inception on July 10, 2007, we sold 8,625,000 shares of common stock (after
giving effect to our 6 for 5 stock split effected on September 4,
2007) without registration under the Securities Act:
Stockholders
Number
of Shares
NRDC
Capital Management, LLC
8,625,000
Such
shares were issued on July 13, 2007 in connection with our organization pursuant
to the exemption from registration contained in Section 4(2) of the Securities
Act as they were sold to sophisticated, accredited entities. The
shares issued to the entity above were sold for an aggregate offering price
of
$25,000 at an average purchase price of approximately $0.003 per
share. Of these shares, 1,125,000 are subject to forfeiture to the
extent the underwriters do not exercise their over-allotment
option.
In
addition, our officers and directors have committed to purchase from us
8,000,000 warrants at $1.00 per warrant (for an aggregate purchase price of
$8,000,000). These purchases will take place on a private placement
basis immediately prior to the consummation of our initial public
offering. These issuances will be made pursuant to the exemption from
registration contained in Section 4(2) of the Securities Act. The
obligation to purchase the warrants undertaken by the above individuals was
made
pursuant to a Subscription Agreement, dated as of July 13, 2007 (the form of
which was filed as Exhibit 10.10 to the Registration Statement on Form
S-1). Such obligation was made prior to the filing of the
Registration Statement, and the only conditions to the obligation undertaken
by
such individuals are conditions outside of the investor’s
control. Consequently, the investment decision relating to the
purchase of the warrants was made prior to the filing of the Registration
Statement relating to the public offering and therefore constitutes a “completed
private placement.”
No
underwriting discounts or commissions were paid with respect to such
sales.
II-4
Item 16. Exhibits
and Financial Statement Schedules.
(a) The
following exhibits are filed as part of this Registration
Statement:
Exhibit
No.
Description
1.1
Form
of Underwriting Agreement.
3.1
Second
Amended & Restated Certificate of Incorporation
3.2
By-Laws*
4.1
Specimen
Unit Certificate
4.2
Specimen
Common Stock Certificate
4.3
Specimen
Warrant Certificate
4.4
Form
of Warrant Agreement between Continental Stock Transfer & Trust
Company and the Registrant
5.1
Opinion
of Sidley Austin LLP
10.1
Letter
Agreement among the Registrant, Banc of America Securities LLC
and NRDC
Capital Management, LLC
10.2
Letter
Agreement among the Registrant, Banc of America Securities LLC
and William
L. Mack
10.3
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Robert
C. Baker
10.4
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Richard
A. Baker
10.5
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Lee
Neibart
10.6
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Michael
J. Indiveri
10.7
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Edward
H. Meyer
10.8
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Laura
Pomerantz
10.9
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Ronald
W. Tysoe
10.10
Form
of Investment Management Trust Agreement between Continental Stock
Transfer & Trust Company and the Registrant
10.11
Form
of Letter Agreement between NRDC Capital Management, LLC and the
Registrant regarding office space and administrative
services
10.12
Promissory
Note issued by the Registrant to NRDC Capital Management,
LLC*
10.13
Form
of Registration Rights Agreement between the Registrant and NRDC
Capital
Management, LLC
10.14
Subscription
Agreement between the Registrant and NRDC Capital Management,
LLC*
10.15
Private
Placement Warrant Purchase Agreement between the Registrant and
NRDC
Capital Management, LLC
10.16
Right
of First Offer Agreement among the Registrant and NRDC Capital
Management,
LLC, NRDC Real Estate Advisors, LLC, NRDC Equity Partners, William
L.
Mack, Robert C. Baker, Richard A. Baker, Lee Neibart, Michael J.
Indiveri, Edward H. Meyer, Laura Pomerantz and Ronald W.
Tysoe.
10.17
Co-investment
Agreement between the Registrant and NRDC Capital Management,
LLC
10.18
Letter
Agreement between the Registrant and Apollo Real Estate
Advisors.
II-5
Exhibit
No.
Description
14
Code
of Ethics
23.1
Consent
of Goldstein Golub Kessler LLP
23.2
Consent
of Sidley Austin LLP
(included in Exhibit 5.1)
24
Power
of Attorney (included on the signature page of this registration
statement)
99.1
Audit
Committee Charter
99.2
Nominating
Committee Charter
*
Previously filed
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
To
reflect in the prospectus any facts or events arising after the effective
date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change
in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low
or
high end of the estimated maximum offering range may be reflected in the
form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change
in
the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement;
and
To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
That,
for
the purpose of determining liability under the Securities Act of 1933, each
such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
To
remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the
offering.
That,
for
the purpose of determining liability of the registrant under the Securities
Act
of 1933 to any purchaser in the initial distribution of securities, the
undersigned registrant understands that in a primary offering of securities
of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if
the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned
II-6
registrant
will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
Any
preliminary prospectus or prospectus of the undersigned registrant relating
to
the offering required to be filed pursuant to Rule 424;
Any
free
writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
Any
other
communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
The
undersigned hereby undertakes to provide to the underwriters at the closing
specified in the underwriting agreements, certificates in such denominations
and
registered in such names as required by the underwriters to permit prompt
delivery to each purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person with the securities being registered, the registrant will, unless in
the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will
be governed by the final adjudication of such issue.
The
undersigned registrant hereby undertakes that:
For
purposes of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
For
the
purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed
to
be a new registration statement relating to the securities offered therein,
and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-7
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the
requirements for filing on Form S-1 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, NY, on the 7th day of September,
2007.
NRDC
ACQUISITION CORP.
By: /s/ Richard
A. Baker
Richard
A. Baker
Chief
Executive Officer
(Principal
Executive Officer)
POWER
OF ATTORNEY
KNOW
ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Richard A. Baker his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution for him and in
his
name, place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this registration statement (and to
any
registration statement filed pursuant to Rule 462 under the Securities Act
of
1933, as amended), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do
and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his
substitute, each acting alone, may lawfully do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following persons in the capacities
and
on the date indicated.
Name
Position
Date
*
William
L. Mack
Chairman
of the Board
September
7, 2007
*
Robert
C. Baker
Vice
Chairman of the Board
September
7, 2007
/s/ RICHARD
A. BAKER
Richard
A. Baker
Chief
Executive Officer and Director (principal executive officer and
principal
financial officer)
September
7, 2007
*
Lee
Neibart
President
and Director
September
7, 2007
/s/MICHAEL
J. INDIVERI
Michael
J. Indiveri
Director
September
7, 2007
II-8
/s/EDWARD
H. MEYER
Edward
H. Meyer
Director
September
7, 2007
/s/LAURA
POMERANTZ
Laura
Pomerantz
Director
September
7, 2007
/s/RONALD
W. TYSOE
Ronald
W. Tysoe
Director
September
7, 2007
*By: /s/ RICHARD
A. BAKER
Richard
A. Baker
Attorney-in-Fact
II-9
EXHIBIT
INDEX
Exhibit
No.
Description
1.1
Form
of Underwriting Agreement.
3.1
Second
Amended & Restated Certificate of Incorporation
3.2
By-Laws*
4.1
Specimen
Unit Certificate
4.2
Specimen
Common Stock Certificate
4.3
Specimen
Warrant Certificate
4.4
Form
of Warrant Agreement between Continental Stock Transfer & Trust
Company and the Registrant
5.1
Opinion
of Sidley Austin LLP
10.1
Letter
Agreement among the Registrant, Banc of America Securities LLC
and NRDC
Capital Management, LLC
10.2
Letter
Agreement among the Registrant, Banc of America Securities LLC
and William
L. Mack
10.3
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Robert
C. Baker
10.4
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Richard
A. Baker
10.5
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Lee
Neibart
10.6
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Michael
J. Indiveri
10.7
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Edward
H. Meyer
10.8
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Laura
Pomerantz
10.9
Letter
Agreement among the Registrant, Banc of America Securities LLC
and Ronald
W. Tysoe
10.10
Form
of Investment Management Trust Agreement between Continental Stock
Transfer & Trust Company and the Registrant
10.11
Form
of Letter Agreement between NRDC Capital Management, LLC and the
Registrant regarding office space and administrative
services
10.12
Promissory
Note issued by the Registrant to NRDC Capital Management,
LLC*
10.13
Form
of Registration Rights Agreement between the Registrant and NRDC
Capital
Management, LLC
10.14
Subscription
Agreement between the Registrant and NRDC Capital Management,
LLC*
10.15
Private
Placement Warrant Purchase Agreement between the Registrant and
NRDC
Capital Management, LLC
10.16
Right
of First Offer Agreement among the Registrant and NRDC Capital
Management,
LLC, NRDC Real Estate Advisors, LLC, NRDC Equity Partners, William
L.
Mack, Robert C. Baker, Richard A. Baker, Lee Neibart, Michael J.
Indiveri, Edward H. Meyer, Laura Pomerantz and Ronald W.
Tysoe.
10.17
Co-investment
Agreement between the Registrant and NRDC Capital Management,
LLC
10.18
Letter
Agreement between the Registrant and Appollo Real Estate Advisors
L.P.
14
Code
of Ethics
23.1
Consent
of Goldstein Golub Kessler LLP
23.2
Consent
of Sidley Austin LLP
(included in Exhibit 5.1)*
24
Power
of Attorney (included on the signature page of this registration
statement)