Restatement Of Previously Issued Financial Statement [Text Block] |
2. Restatement of Previously Issued Financial Statements
In February 2013, the Company concluded it should correct its accounting related to the Company’s outstanding warrants. The Company had initially accounted for the warrants as a component of equity but upon further evaluation of the terms of the warrant, concluded that the warrants should be accounted for as a derivative liability. The warrants contain a restructuring price adjustment provision, such that, in the event the Company completes a business combination subsequent to the initial Business Combination which results in the Company’s shares no longer being listed on a national exchange or the OTC Bulletin Board, the exercise price of the warrants will decrease by formula that causes the warrants to not be indexed to the Company’s own shares. As a result of this provision, the Company has restated its financial statements to reflect the Company’s warrants as a derivative liability with changes in the fair value recorded in the current period earnings.
The following table below summarizes the effect of the restatement to the Company’s financial statements for the period ended December 31, 2011 and to the Company’s quarterly financial statements issued during 2011 and 2012:
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As |
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Previously |
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As |
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Reported |
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Adjustments |
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Restated |
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Balance sheet as of June 30, 2011 (unaudited) |
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Common Stock Subject to Possible Redemption |
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178,887,175 |
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(22,093,625 |
) |
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156,793,550 |
|
Warrant Liability |
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- |
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22,093,625 |
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22,093,625 |
|
Common Stock |
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2,316 |
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(1,568 |
) |
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|
748 |
|
Additional Paid-in Capital |
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5,170,198 |
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(170,945 |
) |
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4,999,253 |
|
Retained Earnings |
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(172,513 |
) |
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172,513 |
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- |
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Three months ended June 30, 2011 (unaudited) |
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Change in fair value of warrant liability |
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- |
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2,559,250 |
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2,559,250 |
|
Net income (loss) |
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(162,396 |
) |
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(2,599,250 |
) |
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(2,761,646 |
) |
Net income (loss) per share |
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(0.03 |
) |
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(0.45 |
) |
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(0.48 |
) |
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Period from February 2, 2011 (inception) to June 30, 2011 (unaudited) |
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Change in fair value of warrant liability |
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- |
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2,599,250 |
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2,599,250 |
|
Net income (loss) |
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(172,513 |
) |
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(2,599,250 |
) |
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(2,771,763 |
) |
Net income (loss) per share |
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(0.04 |
) |
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(0.49 |
) |
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(0.53 |
) |
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Balance sheet as of September 30, 2011 (unaudited) |
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Common Stock Subject to Possible Redemption |
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178,574,414 |
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(19,494,375 |
) |
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159,080,039 |
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Warrant Liability |
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- |
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19,494,375 |
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19,494,375 |
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Common Stock |
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2,316 |
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(1,591 |
) |
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|
725 |
|
Additional Paid-in Capital |
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5,482,959 |
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(483,683 |
) |
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4,999,276 |
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Retained Earnings |
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(485,274 |
) |
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485,274 |
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- |
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Three months ended September 30, 2011 (unaudited) |
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Change in fair value of warrant liability |
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- |
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(2,599,250 |
) |
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(2,599,250 |
) |
Net income (loss) |
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(312,761 |
) |
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2,599,250 |
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|
2,286,489 |
|
Net income (loss) per share |
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(0.06 |
) |
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0.37 |
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|
0.31 |
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Period from February 2, 2011 (inception) to September 30, 2011 (unaudited) |
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Change in fair value of warrant liability |
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- |
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- |
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- |
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Net income (loss) |
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(485,274 |
) |
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- |
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(485,274 |
) |
Net income (loss) per share |
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(0.10 |
) |
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0.01 |
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(0.09 |
) |
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Balance sheet as of December 31, 2011 (audited) |
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Common Stock Subject to Possible Redemption |
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178,278,367 |
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(15,075,650 |
) |
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163,202,717 |
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Warrant Liability |
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- |
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15,075,650 |
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15,075,650 |
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Common Stock |
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2,316 |
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(1,632 |
) |
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|
684 |
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Additional Paid-in Capital |
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5,482,959 |
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(483,640 |
) |
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4,999,319 |
|
Retained Earnings |
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(781,319 |
) |
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781,319 |
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- |
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Period from February 2, 2011 (inception) to December 31, 2011 (audited) |
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Change in fair value of warrant liability |
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- |
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(4,418,725 |
) |
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(4,418,725 |
) |
Net income (loss) |
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(781,319 |
) |
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4,418,725 |
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3,637,406 |
|
Net income (loss) per share |
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(0.05 |
) |
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0.65 |
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0.60 |
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As |
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Previously |
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As |
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Reported |
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Adjustments |
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Restated |
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Balance sheet as of March 31, 2012 (unaudited) |
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Common Stock Subject to Possible Redemption |
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177,981,042 |
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(12,736,325 |
) |
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165,244,717 |
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Warrant Liability |
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- |
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12,736,325 |
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12,736,325 |
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Common Stock |
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2,316 |
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(1,652 |
) |
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664 |
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Additional Paid-in Capital |
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6,076,329 |
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(1,076,992 |
) |
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4,999,337 |
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Retained Earnings |
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(1,078,644 |
) |
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1,078,644 |
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- |
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Three months ended March 31, 2012 (unaudited) |
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Change in fair value of warrant liability |
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- |
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(2,339,325 |
) |
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(2,339,325 |
) |
Net income (loss) |
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(297,325 |
) |
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2,339,325 |
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2,042,000 |
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Net income (loss) per share |
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(0.01 |
) |
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0.31 |
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0.30 |
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Balance sheet as of June 30, 2012 (unaudited) |
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Common Stock Subject to Possible Redemption |
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177,661,208 |
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(13,366,325 |
) |
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164,294,883 |
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Warrant Liability |
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- |
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12,736,325 |
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12,736,325 |
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Common Stock |
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536 |
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|
131 |
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|
667 |
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Additional Paid-in Capital |
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6,397,947 |
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(1,398,611 |
) |
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4,999,336 |
|
Retained Earnings |
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(1,398,480 |
) |
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1,398,480 |
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- |
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Three months ended June 30, 2012 (unaudited) |
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Change in fair value of warrant liability |
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- |
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- |
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- |
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Net income (loss) |
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(319,836 |
) |
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- |
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(319,836 |
) |
Net income (loss) per share |
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(0.06 |
) |
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0.01 |
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(0.05 |
) |
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Six months ended June 30, 2012 (unaudited) |
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Change in fair value of warrant liability |
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- |
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(2,339,325 |
) |
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(2,339,325 |
) |
Net income (loss) |
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(617,161 |
) |
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2,339,325 |
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|
1,722,164 |
|
Net income (loss) per share |
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(0.12 |
) |
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0.38 |
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|
0.26 |
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Balance sheet as of September 30, 2012 (unaudited) |
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Common Stock Subject to Possible Redemption |
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177,301,453 |
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(8,057,675 |
) |
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169,243,778 |
|
Warrant Liability |
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|
- |
|
|
|
8,057,675 |
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|
8,057,675 |
|
Common Stock |
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|
540 |
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|
84 |
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|
624 |
|
Additional Paid-in Capital |
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|
6,757,696 |
|
|
|
(1,758,313 |
) |
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4,999,383 |
|
Retained Earnings |
|
|
(1,758,229 |
) |
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|
1,758,229 |
|
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|
- |
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Three months ended September 30, 2012 (unaudited) |
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|
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Change in fair value of warrant liability |
|
|
- |
|
|
|
(4,678,650 |
) |
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|
(4,678,650 |
) |
Net income (loss) |
|
|
(359,749 |
) |
|
|
4,678,650 |
|
|
|
4,318,901 |
|
Net income (loss) per share |
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|
(0.07 |
) |
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|
0.72 |
|
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|
0.65 |
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Nine months ended September 30, 2012 (unaudited) |
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Change in fair value of warrant liability |
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|
- |
|
|
|
(7,017,975 |
) |
|
|
(7,017,975 |
) |
Net income (loss) |
|
|
(976,910 |
) |
|
|
7,017,975 |
|
|
|
6,041,065 |
|
Net income (loss) per share |
|
|
(0.18 |
) |
|
|
1.08 |
|
|
|
0.90 |
|