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
________________________________

Units:

NAQ.U

 

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Common Stock:

NAQ

 

Warrants:

NAQ.WS

Offering proceeds to be held in

the trust account:

$296,450,589 of the proceeds from this offering and the private placement (approximately $9.88 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, $10,500,000, representing deferred underwriting discounts and commissions, will be paid to the underwriters upon consummation of our initial business combination (subject to a $0.35 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 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 24, 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 September 21, 2007, 3.52%, 3.82% and 3.99% per annum, respectively.  However, the actual interest rates that we

 

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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 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, subject to the respective pre-existing fiduciary duties of our executive officers and directors, 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 the respective pre-existing fiduciary duties of our executive officers and directors, 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.

 

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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 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

 

 

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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 $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

 

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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 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).

 

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

 

 

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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 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

 

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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. 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 $9.88 per share,

 

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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 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 $9.88 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 $9.88 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.”

 

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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.

 

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				296,724,858
Total liabilities			219,768				10,500,000	(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 ($12,075,000 if the underwriters’ over-allotment option is exercised in full) which is payable to the underwriters upon completion of a business combination less $0.35 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 $9.88 per share (or up to $88,935,167 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 $0.35 per share (or $3,150,000 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 $10,500,000 ($12,075,000 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 $0.35 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

 

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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 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 $9.88, 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.

 

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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 $10,500,000, or $12,075,000 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.

 

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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 $296,450,589 (or $339,875,589, 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;

 

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•

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;

 

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•	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

 

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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

 

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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 24, 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 September 21, 2007, 3.52%, 3.82% and 3.99% 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

 

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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

 

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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 $9.88 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 $9.88, 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

 

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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 $9.88 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 $9.88 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

 

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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.

 

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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

 

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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. Mack, Robert Baker, Richard Baker and 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,

 

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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., The Bear Stearns Companies, Inc., Bowne and Company, Inc., Cablevision, Inc., Gabelli Asset Management, Intercontinental Exchange, 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, subject to the respective pre-existing fiduciary duties of our executive officers and directors, 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 the respective pre-

 

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existing fiduciary duties of our executive officers and directors, 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.

 

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

 

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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 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., The Bear Stearns Companies, Inc., Bowne and Company, Inc., Cablevision, Inc., Gabelli Asset Management, Intercontinental Exchange, 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.  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 criterion or if one of our executive officers, directors or existing stockholders is affiliated with that target business, we will obtain an opinion from an unaffiliated, independent investment banking firm which is a member of the Financial Industry Regulatory Authority (FINRA) with respect to the fair market value of the target business.  In all other instances, we will have no obligation to obtain or provide our stockholders with a fairness opinion.

 

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

 

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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 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

 

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•	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,

 

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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.

 

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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.  Any common stock acquired by our sponsor or our executive officers and directors in this offering or in the secondary market will be considered part of the holdings of public stockholders.  As a result of their

 

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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, and 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).

 

Our staggered board may entrench management and discourage unsolicited stockholder proposals that may be in the best interests of stockholders.

 

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 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.  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.

 

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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 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.

 

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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 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

 

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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 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

 

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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.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

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.

 

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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			10,500,000				12,075,000
Total amount in the trust account		$	296,450,589			$	339,875,589
Percentage of the gross proceeds of the offering held in the trust account			98.8	%			98.5	%
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

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(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 3.5% of the gross proceeds from the sale of the units to the public stockholders, or $10,500,000 ($12,075,000 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, $10,500,000 ($12,075,000 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 $0.35 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, $296,450,589 (or $339,875,589 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, $10,500,000 (or $12,075,000 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 $0.35 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.

 

 

 

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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,

 

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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.

 

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In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account.

 

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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 3.5% of the gross proceeds, or $10,500,000 ($12,075,000 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.

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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 $10,500,000, representing the deferred underwriting discounts and commissions payable on consummation of an initial business combination.

 

 

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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					296,700,589
Less:  Deferred underwriting costs excluded from net tangible book value before this offering and the private placement(1)					(10,500,000)
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 $0.35 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.

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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.

 

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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

 

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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 $10,500,000 (or $12,075,000 if the underwriters’ over-allotment option is exercised in full), $296,450,589 (or $339,875,589 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 $10,500,000 (or $12,075,000 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 $0.35 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

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combination.  However, we may need to obtain additional financing to the extent such financing is required to consummate an initial business 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.

 

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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.