Company Overview
| Company Name |
CHART ACQUISITION CORP. |
| Company Address |
75 ROCKEFELLER PLAZA
14TH FLOOR
NEW YORK, NY 10019 |
| Company Phone |
212-350-8250 |
| Company Website |
-- |
| CEO |
Joseph R. Wright |
| Employees (as of 12/14/2012) |
3 |
| State of Inc |
DE |
| Fiscal Year End |
12/31 |
| Status |
Priced (12/14/2012) |
| Proposed Symbol |
CACGU |
| Exchange |
Nasdaq SmallCap Market |
| Share Price |
$10.00 |
| Shares Offered |
7,500,000 |
| Offer Amount |
$75,000,000.00 |
| Total Expenses |
$762,500.00 |
| Shares Over Alloted |
0 |
| Shareholder Shares Offered |
-- |
| Shares Outstanding |
9,750,000 |
| Lockup Period (days) |
180 |
| Lockup Expiration |
6/12/2013 |
| Quiet Period Expiration |
1/23/2013 |
| CIK |
0001527349 |
We are offering 7,500,000 units at an offering price of $10.00 per unit. We
estimate that the net proceeds of this offering together with the funds we will
receive from the sale of the placement units (all of which will be deposited
into the trust account) will be used as set forth in the following table.
Without Overallotment
Overallotment Option
Option Exercised in Full
------------------ ---------------------
Gross proceeds
Proceeds from units offered to the public(1) $ 75,000,000 $ 86,250,000
Proceeds from private placement 3,750,000 3,750,000
Total gross proceeds $ 78,750,000 $ 90,000,000
Estimated offering expenses(2)
Underwriting commissions (2.750% of gross proceeds
from units offered to public, excluding deferred
portion)(3) $ 2,062,500 $ 2,371,875
Legal fees and expenses 250,000 250,000
Printing and engraving expenses 45,000 45,000
Accounting fees and expenses 45,000 45,000
SEC fees 13,179 13,179
FINRA fees 12,000 12,000
Nasdaq Capital Market Listing Fees 50,000 50,000
Travel and roadshow 30,000 30,000
Directors and officers insurance 250,000 250,000
Miscellaneous expenses 67,321 67,321
Total offering expenses $ 2,825,000 $ 3,134,375
Proceeds after offering expenses $ 75,925,000 $ 86,865,625
Held in trust account 75,000,000 85,940,625
% of public offering proceeds held in trust(4) 100 % 99.6 %
Not held in trust account $ 925,000 $ 925,000
The following table shows the use of the $925,000 of net proceeds of the
offering not held in the trust account and the interest earned on amounts in the
trust account that may be released to us to cover operating expenses(4).
Amount Percentage
----------------- -------------
Use of net proceeds not held in trust and approximate
amounts available from interest income earned on the
trust account(5)(6)
Due diligence (excluding accounting and legal due
diligence) of prospective target(s) $ 170,363 18.2 %
Legal and accounting expenses attendant to the due
diligence investigations, structuring and negotiations
of an initial business combination 402,137 37.4 %
Legal and accounting fees relating to SEC reporting
obligations 150,000 13.9 %
Administrative services and support payable to an
affiliate of
our sponsor (up to $10,000 per month for up to 21
months) 210,000 19.5 %
Reserve for liquidation expenses 30,000 2.8 %
Nasdaq continued listing fees 48,125 4.5 %
Other miscellaneous expenses 39,375 3.7 %
Total $ 1,025,000 100.0 %
(1) Includes amounts payable to public stockholders who properly redeem their
shares in connection with the consummation of our initial business
combination.
(2) In addition, a portion of the offering expenses have been prepaid from the
proceeds of $205,000 of a loan from our sponsor and an affiliate of our
sponsor, as described in this prospectus. In the event that offering expenses
are less than set forth in this table, any such amounts will be used for
post-closing working capital expenses.
(3) The underwriters have agreed to defer approximately $2.34 million of their
underwriting commissions (or approximately $2.7 million if the underwriters’
overallotment option is exercised in full), which equals 3.125% of the gross
proceeds from the units offered to the public, until consummation of initial
business combination. Upon consummation of our initial business combination,
approximately $2.34 million, which constitutes the underwriters’ deferred
commissions (or approximately $2.7 million if the underwriters’ overallotment
option is exercised in full) will be paid to the underwriters from the funds
held in the trust account, and the remaining funds will be released to us and
can be used to pay all or a portion of the purchase price of the business or
businesses with which our initial business combination occurs or for general
corporate purposes, including payment of principal or interest on
indebtedness incurred in connection with our initial business combination, to
fund the purchases of other companies or for working capital.
(4) All of the proceeds of the private placement and a portion of the net
proceeds of the offering (being $71,250,000 of the net proceeds from this
offering, including deferred underwriting commissions of approximately $2.34
million (or $82,190,625 of the net proceeds from this offering, including
deferred underwriting commissions of approximately $2.7 million, if the
underwriters’ overallotment option is exercised in full)), will be placed in
a trust account at J.P. Morgan Chase Bank, N.A. located in the United States,
maintained by Continental Stock Transfer & Trust Company, acting as trustee.
(5) These expenses are estimates only. Our actual expenditures for some or all of
these items may differ from the estimates set forth herein. For example, we
may incur greater legal and accounting expenses than our current estimates in
connection with negotiating and structuring a business combination based upon
the level of complexity of such business combination. In the event we
identify an acquisition target in a specific industry subject to specific
regulations, we may incur additional expenses associated with legal due
diligence and the engagement of special legal counsel. In addition, our
staffing needs may vary and as a result, we may engage a number of
consultants to assist with legal and financial due diligence. We do not
anticipate any change in our intended use of proceeds, other than
fluctuations among the current categories of allocated expenses, which
fluctuations, to the extent they exceed current estimates for any specific
category of expenses, would not be available for our expenses. The amount of
interest available to us from the trust account may be less than expected as
a result of the current interest rate environment. Based on the current
interest rate environment, we would expect approximately $100,000 (after
payment of taxes owed on such interest income) to be available to us from
interest earned on the funds held in the trust account; however, we can
provide no assurances regarding this amount. This estimate assumes an
interest rate of 0.17% per annum based upon current yields of securities in
which the trust account may be invested.
(6) Includes estimated amounts that may also be used in connection with our
initial business combination to fund a “no shop” provision (a provision
designed to keep target businesses from “shopping” around for transactions
with other companies on terms more favorable to such target businesses) and
commitment fees for financing.
A total of approximately $75.0 million (or approximately $85.9 million if the
underwriters’ over-allotment option is exercised in full) of the aggregate net
proceeds from this offering and all of the private placement, including
approximately $2.34 million (or approximately $2.7 million if the underwriters’
overallotment option is exercised in full) of the deferred underwriting
discount, will be placed in a trust account with Continental Stock Transfer &
Trust Company acting as trustee and will be invested only in United States
government treasury bills with a maturity of 180 days or less or in money market
funds investing solely in United States Treasuries and meeting certain
conditions under Rule 2a-7 under the Investment Company Act. Except for any
interest income released to us for working capital purposes or the payment of
taxes or dissolution expenses, none of the funds held in the trust account will
be released, subject to the requirements of law, until the earlier of (i) the
consummation of our initial business combination; (ii) the expiration or
termination of any tender offer conducted by us in connection with a proposed
business combination not otherwise withdrawn; (iii) the redemption of our
public shares if we are unable to consummate a business combination within
21 months from the date of this prospectus, subject to applicable law; or (iv)
otherwise upon our liquidation or in the event our board of directors resolves
to liquidate the trust account and ceases to pursue the consummation of a
business combination prior to the expiration of the 21 month period (our board
of directors may determine to liquidate the trust account prior to such
expiration if it determines, in its business judgment, that it is improbable
within the remaining time to identify an attractive business combination or
satisfy regulatory and other business and legal requirements to consummate a
business combination).
We may increase the initial amount held in the trust account from approximately
$10.00 per public share prior to the effectiveness of the registration statement
of which this prospectus forms a part. In such case, we expect that the increase
would be funded by an increase in the amount of the deferral by the underwriters
of the underwriting discount payable in connection with this offering, an
increase in the number of placement units to be purchased by our sponsor, Joseph
Wright or Cowen Overseas at $10.00 per unit and/or a reduction from $925,000 of
the amount initially available to us for working capital that is not held in the
trust account. Public stockholders would own a smaller percentage of our
outstanding common stock on a fully diluted basis to the extent that our
sponsor, Joseph Wright or Cowen Overseas purchases additional placement units.
We do not intend to reduce the initial amount to be held in the trust account.
The net proceeds held in the trust account may be used as consideration to pay
the sellers of a target business with which we ultimately complete a business
combination. If our initial business combination is paid for using stock or debt
securities, or not all of the funds released from the trust account are used for
payment of the purchase price in connection with our business combination, we
may apply the cash released from the trust account that is not applied to the
purchase price for general corporate purposes, including for maintenance or
expansion of operations of acquired businesses, the payment of principal or
interest due on indebtedness incurred in consummating the initial business
combination, to fund the purchase of other companies or for working capital.
We believe that amounts not held in trust plus interest income on the amount in
the trust account that may be released to fund working capital requirements will
be sufficient to pay the costs and expenses to which such proceeds are
allocated. This belief is based on the fact that while we may begin preliminary
due diligence of a target business in connection with an indication of interest,
we intend to undertake in-depth due diligence, depending on the circumstances of
the relevant prospective acquisition, only after we have negotiated and signed a
letter of intent or other preliminary agreement that addresses the terms of a
business combination. However, if our estimate of the costs of undertaking
in-depth due diligence and negotiating a business combination is less than the
actual amount necessary to do so, 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 the underwriters exercise their
overallotment option, the interest income we may withdraw from the trust account
will proportionately increase. In addition, if the size of this offering is
increased or decreased, it would result in a proportionate increase or decrease
in the amount of interest earned in the trust account. We will use any such
increase in interest income to cover our working capital expenses. While we
currently do not know what our future working capital expenses will be and while
they will not necessarily be proportionate to the size of the offering, we
believe that any additional interest income earned and released to us would
facilitate our ability finance the exploration and consideration of a greater
number of potential acquisition targets.
Commencing on the date that our securities are first listed on Nasdaq, we have
agreed to pay The Chart Group L.P., an affiliate of our sponsor, a total of
$10,000 per month for office space, administrative services and secretarial
support. This arrangement is being agreed to by The Chart Group L.P. for our
benefit and is not intended to provide The Chart Group L.P. compensation in
lieu of salary or other remuneration. We believe that such fees are at least as
favorable as we could have obtained from an unaffiliated person. Upon
consummation of our initial business combination or our liquidation, we will
cease paying these monthly fees.
As of the date of this prospectus, our sponsor and an affiliate of our sponsor
have loaned to us a total of $205,000 to be used for a portion of the expenses
of this offering. These loans are non-interest bearing, unsecured and are due at
the earlier of December 31, 2012 or the closing of this offering. The loan will
be repaid upon the closing of this offering out of the proceeds of this
offering.
In addition, in order to finance transaction costs in connection with an
intended initial business combination, our sponsor or an affiliate of our
sponsor or certain of our officers and directors may, but are not obligated to,
loan us funds as may be required. If we consummate an initial business
combination, we would repay such loaned amounts. In the event that the initial
business combination does not close, we may use a portion of the working capital
held outside the trust account to repay such loaned amounts but no proceeds from
our trust account would be used to repay such loaned amounts. Up to $750,000 of
such loans may be convertible into warrants of the post business combination
entity at a price of $0.75 per warrant at the option of the lender. The warrants
would be identical to the placement warrants issued to the initial holders
(except that the placement warrants issued to Cowen Overseas, so long as held by
Cowen Overseas or any of its related persons under FINRA rules, will expire five
years from the effective date of the registration statement of which this
prospectus forms a part, or earlier upon our liquidation). The terms of such
loans by our officers and directors, if any, have not been determined and no
written agreements exist with respect to such loans.
If we seek stockholder approval of our initial business combination and we do
not conduct redemptions in connection with our business combination pursuant to
the tender offer rules, we may enter into privately negotiated transactions to
purchase public shares from stockholders following consummation of the initial
business combination with proceeds released to us from the trust account
immediately following consummation of the initial business combination. Our
initial stockholders, directors, officers or their affiliates may also purchase
shares in privately negotiated transactions either prior to or following the
consummation of our initial business combination. Neither we nor our initial
stockholders, directors, officers, advisors or their affiliates will make any
such purchases when we or they are in possession of any material non-public
information not disclosed to the seller. Although we do not currently anticipate
paying any premium purchase price for such public shares, in the event we do,
the payment of a premium may not be in the best interest of those stockholders
not receiving any such additional consideration. In addition, the payment of a
premium by us after the consummation of our initial business combination may not
be in the best interest of the remaining stockholders who do not redeem their
shares. Such stockholders will experience a reduction in book value per share
compared to the value received by stockholders that have their shares purchased
by us at a premium. Except for the limitations described above on use of trust
proceeds released to us prior to consummating our initial business combination,
there is no limit on the number of shares that could be acquired by us or our
affiliates, or the price we or they may pay, if we hold a stockholder vote.
In no event will we redeem our public shares in an amount that would cause our
net tangible assets to be less than $5,000,001. Furthermore, the redemption
threshold may be further limited by the terms and conditions of our initial
business combination. In such case, we would not proceed with the redemption of
our public shares or the business combination, and instead may search for an
alternate business combination.
A public stockholder will be entitled to receive funds from the trust account
only upon the earlier to occur of: (i) the consummation of our initial business
combination; (ii) the expiration or termination of any tender offer conducted by
us in connection with a proposed business combination not otherwise withdrawn;
(iii) the redemption of our public shares if we are unable to consummate a
business combination within 21 months from the date of this prospectus, subject
to applicable law; or (iv) otherwise upon our liquidation or in the event our
board of directors resolves to liquidate the trust account and ceases to pursue
the consummation of a business combination prior to the expiration of the 21
month period (our board of directors may determine to liquidate the trust
account prior to such expiration if it determines, in its business judgment,
that it is improbable within the remaining time to identify an attractive
business combination or satisfy regulatory and other business and legal
requirements to consummate a business combination). In no other circumstances
will a public stockholder have any right or interest of any kind to or in the
trust account.
Our initial stockholders and Cowen Overseas (as applicable) has each agreed to
waive their redemption rights with respect to its founder shares and placement
shares (i) in connection with the consummation of a business combination, (ii)
if we fail to consummate our initial business combination within 21 months from
the date of this prospectus, (iii) in connection with an expired or unwithdrawn
tender offer, and (iv) upon our liquidation prior to the expiration of the 21
month period. However, if our initial stockholders or any of our officers,
directors or affiliates, or Cowen Overseas, acquires public shares after this
offering, they will be entitled to redemption rights with respect to such public
shares if we fail to consummate our initial business combination within the
required time period.
In identifying, evaluating and selecting a target business for a business
combination, we may encounter intense competition from other entities having a
business objective similar to ours, including other blank check companies,
private equity groups and leveraged buyout funds, and operating businesses
seeking strategic acquisitions. Many of these entities are well established and
have extensive experience identifying and effecting business combinations
directly or through affiliates. Moreover, many of these competitors possess
greater financial, technical, human and other resources than us. Our ability to
acquire larger target businesses will be limited by our available financial
resources. This inherent limitation gives others an advantage in pursuing the
acquisition of a target business. Furthermore, our obligation to pay cash to our
public stockholders who exercise their redemption rights may reduce the
resources available to us for an initial business combination. In addition, the
number of our outstanding warrants, and the future dilution they potentially
represent, may not be viewed favorably by certain target businesses. Either of
these factors may place us at a competitive disadvantage in successfully
negotiating an initial business combination.
Company Description
We are a newly organized blank check company formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more businesses,
which we refer to throughout this prospectus as our initial
business
combination. We have not identified any acquisition target and we have not, nor
has anyone on our behalf, initiated any discussions, directly or indirectly,
with respect to identifying any acquisition target. We have conducted no
operations and have generated no revenues to date and we will not generate
operating revenues at the earliest until we consummate our initial business
combination.
We seek to capitalize on the global network and investing and operating
experience of our management team to identify, acquire and operate one or more
businesses focused on the provision and/or outsourcing of government services
operating within or outside of the United States, although we may pursue
acquisition opportunities in other business sectors. We believe that the
acquisition and operation of an established business focused on the provision
and/or outsourcing of government services will provide a foundation from which
to build, through acquisition or organic growth, a diversified business
platform. We believe our management team has the skills and experience to
identify, evaluate and consummate a business combination and is positioned to
assist businesses we acquire to satisfy the demand for the provision and/or
outsourcing of government services created by the expected constraints on state
and federal budgets. However, our management team’s global network and investing
and operating experience do not guarantee a successful initial business
combination. The members of our management team are not required to devote any
significant amount of time to our business and are concurrently involved with
other businesses. There is no guarantee that our current officers and directors
will continue their respective roles, or any other role, after our initial
business combination, and their expertise may only be of benefit to us until our
initial business combination is completed. Past performance by our management
team is not a guarantee of success with respect to any business combination we
may consummate. Although we may acquire a non-United States business, our
primary search for acquisition targets will focus on domestic operating
businesses.
We anticipate structuring a business combination to acquire 100% of the equity
interest or assets of the target business or businesses. We may, however,
structure a business combination to acquire less than 100% of such interests or
assets of the target business, but we will only consummate such business
combination if we (or any entity that is a successor to us in a business
combination) acquire a majority of the outstanding voting securities or assets
of the target with the objective of making sure that we are not required to
register as an investment company under the Investment Company Act of 1940, as
amended, or the Investment Company Act, based on the fact that less than 40% of
our assets will be defined as investment securities under the provisions of that
statute. We will not consider any transaction that does not meet these criteria.
Even though we will own a majority interest in the target, our stockholders
prior to the business combination may collectively own a minority interest in
the post business combination company, depending on valuations ascribed to the
target and us in the business combination transaction. The Nasdaq rules require
that our initial business combination must be with one or more target businesses
that together have a fair market value equal to at least 80% of the balance in
the trust account (less any deferred underwriting commissions and taxes payable
on interest earned), which is in the United States maintained by Continental
Stock Transfer & Trust Company, acting as trustee, and which we refer to as the
trust account, at the time of our signing a definitive agreement in connection
with our initial business combination. The fair market value of the target or
targets will be determined by our board of directors based upon one or more
standards generally accepted by the financial community, such as discounted
cash flow valuation or value of comparable businesses. If our board is not able
independently to determine the fair market value of the target business or
businesses, we will obtain an opinion from an independent investment banking
firm that is a member of the Financial Industry Regulatory Authority, or FINRA,
with respect to the satisfaction of such criteria. However, if our securities
are not listed on Nasdaq or another securities exchange, we will no longer be
required to consummate a business combination with a target whose fair market
value equals to at least 80% of the balance in the trust account (less any
deferred underwriting commissions and taxes payable on the income earned on the
trust account).
Our management team intends to focus on increasing stockholder value by growing
revenue (through organic growth and acquisitions) and improving the efficiency
of business operations of the acquired company. Consistent with this strategy,
we believe the following general criteria and guidelines are important in
evaluating prospective target businesses. We will use these criteria and
guidelines in evaluating acquisition opportunities, but we may decide to enter
into a business combination with a target business that does not meet these
criteria and guidelines.
• Opportunities for Platform Growth: We will seek to acquire one or more
businesses or assets that we can grow both organically and through
acquisitions. Particularly in regard to the provision and/or outsourcing of
government services, we may initially consider those sectors that complement
our management team’s background, such as information technology and
analysis, communications, equipment manufacturing and assembling, advanced
materials, electronic components, and imaging and sensors.
• History of and Potential for Strong Free Cash Flow Generation: We will seek
to acquire one or more businesses that have the potential to generate strong
free cash flow (i.e., companies that typically generate cash in excess of
that required to maintain or expand the business’s asset base ). We will
focus on one or more businesses that have recurring revenue streams and low
working capital and capital expenditure requirements. We may also seek to
prudently leverage this cash flow in order to enhance stockholder value.
• Established Companies with Proven Track Records: We will seek to acquire
established companies, particularly those focused on industries connected to
the provision and/or outsourcing of government services with sound historical
financial performance. We will typically focus on companies with a history of
strong operating and financial results. Although we are not restricted from
doing so, we do not intend to acquire start-up companies.
• Experienced and Motivated Management Teams: We will seek to acquire
businesses that have strong, experienced management teams with a substantial
personal economic stake in the performance of the acquired business. We will
focus on management teams with a proven track record of driving revenue
growth, enhancing profitability and generating strong free cash flow. We
expect that the operating expertise of our officers and directors will
complement, not replace the target’s management team.
• Strong Competitive Industry Position: We will seek to acquire businesses
focused on the provision and/or outsourcing of government services industries
that have strong fundamentals although we may acquire businesses in other
industries. The factors we will consider include growth prospects,
competitive dynamics, level of consolidation, need for capital investment and
barriers to entry. We will focus on companies that have a leading or niche
market position. We will analyze the strengths and weaknesses of target
businesses relative to their competitors, focusing on product quality,
customer loyalty, cost impediments associated with customers switching to
competitors, intellectual property protection and brand positioning. We will
seek to acquire one or more businesses that demonstrate advantages when
compared to their competitors, which may help to protect their market
position and profitability.
These criteria are not intended to be exhaustive. Any evaluation relating to the
merits of a particular initial business combination may be based, to the extent
relevant, on these general guidelines as well as other considerations, factors
and criteria that our management may deem relevant. In the event that we decide
to enter into a business combination with a target business that does not meet
the above criteria and guidelines, we will disclose that the target business
does not meet the above criteria in our stockholder communications related to
our initial business combination, which, as discussed in this prospectus, would
be in the form of tender offer documents or proxy solicitation materials that
we would file with the SEC.
Our management team and board of directors have engaged in many different
aspects of government services with a focus on defense, intelligence and
national security and, as a result, have developed a global network of contacts
in those sectors. We anticipate that our management team’s global network of
contacts would provide us with insight into the changing nature and needs of
these sectors which tend to predominantly fall under the purview of state and
federal governments. We believe we can leverage the experience of our officers
and directors and the network of contacts they maintain within these industries
to identify and potentially consummate a business combination within these
sectors.
Our chairman and chief executive officer, Joseph R. Wright, has served in the
United States government in various capacities since the 1980s and is currently
a member of the Defense Business Board. Mr. Wright also has corporate
experience, including as chief executive officer of PanAmSat Corporation and
chairman of Intelsat Ltd., providers of satellite/fiber services with global
fleets providing services to international corporations and governments. Mr.
Wright has additional industry experience through his role as chairman of GRC
International, a public company providing advanced information technologies
primarily to government customers. Mr. Wright is also an independent director of
Cowen Group, Inc., the parent company of Cowen and Company, LLC, one of the lead
underwriters in this offering. Our president, Christopher D. Brady, who is
affiliated with The Chart Group L.P., a member of our sponsor, has over 25 years
experience in private equity, venture capital, corporate finance and capital
markets. Mr. Brady has had experience working on various government-related
transactions, a focus of the business of The Chart Group L.P. Our chief
financial officer, Michael LaBarbera, serves as managing director of Chart Group
Advisors, an affiliate of The Chart Group L.P., and has over 25 years experience
in arranging acquisition and growth capital financings for both private and
public companies. Peter A. Cohen, one of our directors, is Chairman and Chief
Executive Officer of Cowen Group, Inc. Mr. Cohen has over 40 years experience in
the financial industry, including serving as Chairman and Chief Executive
Officer of Shearson Lehman Brothers. Over his career he has served on a number
of corporate, industry and philanthropic boards, including The New York Stock
Exchange, The Federal Reserve International Capital Markets Advisory Committee,
The Depository Trust Company, The Ohio State University Foundation, The New York
City Opera, The American Express Company, GRC International, Olivetti SpA,
Société Générale de Belgique, Telecom Italia SpA, Presidential Life Corporation,
Kroll, Inc., and L-3 Communications. He is presently a Director of Mount Sinai
Hospital, Safe Auto Insurance, and Scientific Games Corporation.
Our knowledge of the government service industry is further enhanced by virtue
of the experience of certain of our other directors. In 2003, Governor Thomas
Ridge, a director, former Congressman and former Governor of Pennsylvania, was
appointed the first Secretary of the Department of Homeland Security by
President George W. Bush. Senator Robert Kerrey, a director, was the Governor of
Nebraska from 1983-1987, and was elected to the United States Senate in 1988 and
reelected in 1994. Both Governor Ridge and Senator Kerrey served in the Vietnam
War. Senator Kerrey was a member of the National Commission on Terrorist Attacks
on the United States, or as commonly called the “9-11 Commission”, an
independent, bipartisan commission created by congressional legislation and the
signature of President Bush in 2002, chartered to prepare a full and complete
account of the circumstances surrounding the September 11, 2001 terrorist
attacks, including preparedness for and the immediate response to the attacks.
The Commission was also mandated to provide recommendations designed to guard
against future attacks. Governor Ridge gave key testimony before the 9-11
Commission, and between Governor Ridge and Senator Kerrey, they have a deep
understanding of the government and the defense industry through their political
and military backgrounds. Our director, Timothy N. Teen is a founder of Chart
Venture Partners, an affiliate of our sponsor, and founded Blue Ocean Capital
Partners, a strategic advisory firm to the Aerospace & Defense sectors and
serves as its chief executive officer. Since 2004, Mr. Teen has served as the
president and chief executive officer of InSitech, Inc., a government services
firm that advises the United States Army, Navy and Marines on private sector
trends and technology related issues.
In addition to any potential business candidates we may identify on our own, we
anticipate that other target business candidates will be brought to our
attention from various unaffiliated sources, including investment market
participants, private equity funds and large business enterprises seeking to
divest non-core assets or divisions.
In evaluating a prospective target business, we expect to conduct an extensive
due diligence review which will encompass, as applicable and among other things,
meetings with incumbent management and employees, document reviews, interviews
of customers and suppliers, inspection of facilities, as well as a review of
financial and other information which will be made available to us.
We are not prohibited from pursuing an initial business combination with a
company that is affiliated with our sponsor, officers or directors.
Additionally, we are not prohibited from partnering, submitting joint bids, or
entering into any similar transaction with our sponsor, or an affiliate of our
sponsor, in the pursuit of an initial business combination. In the event we seek
to complete an initial business combination with such a company or we partner
with our sponsor or an affiliate of our sponsor in our pursuit of an initial
business combination, we, or a committee of independent directors, would obtain
an opinion from an independent investment banking firm which is a member of the
Financial Industry Regulatory Authority, or FINRA, that such an initial business
combination is fair to our stockholders from a financial point of view.
If any of our officers or directors becomes aware of a business combination
opportunity that falls within the line of business of any entity to which he
has pre-existing fiduciary or contractual obligations, he may be required to
present such business combination opportunity to such entity prior to
presenting such business combination opportunity to us. Certain of our
directors currently have certain relevant fiduciary duties or contractual
obligations that may take priority over their duties to us. In addition, our
officers and directors have agreed not to participate in the formation of, or
become an officer or director of, any blank check company until we have entered
into a definitive agreement regarding our initial business combination or we
have failed to complete our initial business combination within 21 months from
the date of this prospectus.
We are an emerging growth company as defined in the Jumpstart Our Business
Startups Act of 2012 (which we refer to herein as the JOBS Act) and will remain
such for up to five years. If our non-convertible debt issued within a three
year period or revenues exceeds $1 billion, or the market value of our ordinary
shares that are held by non-affiliates exceeds $700 million on the last day of
the second fiscal quarter of any given fiscal year, we would cease to be an
emerging growth company as of the following fiscal year. As an emerging growth
company, we have elected, under Section 107(b) of the JOBS Act, to take
advantage of the extended transition period provided in Securities Act Section
7(a)(2)(B) for complying with new or revised accounting standards.
Our executive offices are located at 75 Rockefeller Plaza, 14th Floor, New York,
NY 10019 and our telephone number is (212) 350-8205.