Organization and Business Operations |
8 Months Ended |
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Sep. 30, 2011 | |
Organization and Business Operations |
Note 2. Organization and Business Operations
Incorporation
The
Company was incorporated in Delaware on February 2,
2011.
Sponsor
The
Company’s sponsor is Global Eagle Acquisition, LLC, a
Delaware limited liability company (the “Sponsor”).
Members of the Sponsor include Harry E. Sloan, the Company’s
Chairman and Chief Executive Officer, Jeff Sagansky, the
Company’s President, and James A. Graf, the Company’s
Vice President, Chief Financial Officer, Treasurer and
Secretary.
Fiscal
Year End
The
Company has selected December 31 as its fiscal year
end.
Business
Purpose
The
Company was formed to effect a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses (a “Business
Combination”).
Financing
On
May 18, 2011, the Company consummated a public offering (the
“Public Offering” - Note 4) and a private placement
(Note 5) and placed $189,626,500 of the proceeds thereof in the
Trust Account (discussed below). The Company intends to finance a
Business Combination in part with proceeds from the Public Offering
and the private placement.
Trust
Account
The
amounts held in the trust account (the “Trust Account”)
are required to be invested in United States “government
securities” within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940, as amended (the “Investment
Company Act”), having a maturity of 180 days or less, or in
money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act which
invest only in direct U.S. government treasury
obligations.
Except
for a portion of interest income earned on the Trust Account
balance that may be released to the Company to pay any taxes on
such interest and to fund working capital requirements, and any
amounts necessary for the Company to purchase up to 50% of the
Company’s public shares if the Company seeks stockholder
approval of the Business Combination, none of the funds held in the
Trust Account will be released until the earlier of: (i) the
consummation of the Business Combination; or (ii) the redemption of
100% of the shares of common stock, par value $0.0001 per share,
included in the units sold in the Public Offering (“Public
Shares”) if the Company is unable to consummate a Business
Combination within 21 months from the closing of the Public
Offering (subject to the requirements of law).
Business
Combination
A
Business Combination is subject to the following size, focus and
stockholder approval provisions:
Size and Nature of Transaction — The Company’s
Business Combination must occur with one or more target businesses
that together have a fair market value of at least 80% of the
assets held in the Trust Account (excluding the deferred
underwriting commissions and taxes payable on the income earned on
the Trust Account) at the time of the agreement to enter into the
Business Combination. The Company will not complete a Business
Combination unless it acquires 50% or more of the outstanding
voting securities of a target company or is otherwise not required
to register as an investment company under the Investment Company
Act.
Focus — The Company’s efforts in identifying
prospective target businesses initially will be focused on
businesses in the media or entertainment sectors, but the Company
may pursue opportunities in other business sectors.
Tender Offer/Stockholder Approval — The Company, after
signing a definitive agreement for a Business Combination, will
either (i) seek stockholder approval of the Business Combination at
a meeting called for such purpose in connection with which holders
of Public Shares (“Public Stockholders”) may seek to
redeem their shares, regardless of whether they vote for or against
the Business Combination, for cash equal to their pro rata share of
the aggregate amount then on deposit in the Trust Account,
including interest but less franchise and income taxes payable, or
(ii) provide Public Stockholders with the opportunity to sell their
shares to the Company by means of a tender offer (and thereby avoid
the need for a stockholder vote) for an amount in cash equal to
their pro rata share of the aggregate amount then on deposit in the
Trust Account, including interest but less franchise and income
taxes payable. The decision as to whether the Company will seek
stockholder approval of the Business Combination or will allow
Public Stockholders to sell their shares in a tender offer will be
made by the Company, solely in its discretion, and will be based on
a variety of factors such as the timing of the transaction and
whether the terms of the transaction would otherwise require the
Company to seek stockholder approval. If the Company seeks
stockholder approval, it will consummate the Business Combination
only if a majority of the outstanding shares of common stock voted
are voted in favor of the Business Combination. However, in no
event will the Company redeem its Public Shares in an amount that
would cause its net tangible assets to be less than $5,000,001. In
such case, the Company would not proceed with the redemption of its
Public Shares and the related Business Combination, and instead may
search for an alternate Business Combination.
Regardless
of whether the Company holds a stockholder vote or a tender offer
in connection with a Business Combination, Public Stockholders will
have the right to redeem their shares for an amount in cash equal
to their pro rata share of the aggregate amount then on deposit in
the Trust Account, including interest but less franchise and income
taxes payable upon the closing of the Business Combination. As a
result, such shares of common stock were recorded at
conversion/tender value and classified as temporary equity in
accordance with Financial Accounting Standards Board, or FASB, ASC
Topic 480, “Distinguishing Liabilities from
Equity.”
Permitted Purchase of Public Shares — If the Company
seeks stockholder approval prior to the Business Combination and
does not conduct redemptions pursuant to the tender offer rules,
prior to the Business Combination, the Company’s Amended and
Restated Certificate of Incorporation permits the release to the
Company from the Trust Account amounts necessary to purchase up to
50% of the Public Shares. All shares so purchased by the Company
will be immediately cancelled.
Liquidation
If
the Company does not consummate a Business Combination within 21
months from the closing of the Public Offering, the Company will
(i) cease all operations except for the purpose of winding up, (ii)
as promptly as reasonably possible but not more than ten business
days thereafter, redeem 100% of the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on
deposit in the Trust Account, including interest but net of
franchise and income taxes payable (less up to $100,000 of such net
interest to pay dissolution expenses), divided by the number of
then outstanding Public Shares, which redemption will completely
extinguish Public Stockholders’ rights as stockholders
(including the right to receive further liquidation distributions,
if any), subject to applicable law, and subject to the requirement
that any refund of income taxes that were paid from the Trust
Account which is received after such redemption shall be
distributed to the former Public Stockholders, and (iii) as
promptly as reasonably possible following such redemption, subject
to the approval of the Company’s remaining stockholders and
the Company’s board of directors, dissolve and liquidate,
subject in each case to the Company’s obligations under
Delaware law to provide for claims of creditors and the
requirements of other applicable law.
In
the event of liquidation, it is possible that the per share value
of the residual assets remaining available for distribution
(including Trust Account assets) will be less than the price per
unit sold in the Public Offering (assuming no value is attributed
to the warrants contained in the units offered in the Public
Offering discussed in Note 4).
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