Public Offering |
8 Months Ended |
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Sep. 30, 2011 | |
Public Offering |
Note 4. Public Offering
Public
Units
On
May 18, 2011, the Company sold 18,992,500 units at a price of
$10.00 per unit in the Public Offering (which included 1,497,500
units to cover the partial exercise of the over allotment option of
the underwriters). Each unit consists of one Public Share and one
warrant (the “Public Warrants”).
Public
Warrant Terms and Conditions
Exercise conditions — Each Public Warrant entitles the
holder to purchase from the Company one share of common stock at an
exercise price of $11.50 per share commencing on the later of: (i)
30 days after the consummation of a Business Combination, or (ii)
12 months from the date of the prospectus for the Public Offering,
provided that the Company has an effective registration statement
covering the shares of common stock issuable upon exercise of the
Public Warrants (or the Public Warrants are exercisable on a
cashless basis) and such shares are registered or qualified under
the securities laws of the state of the exercising holder. The
Public Warrants expire five years from the date of the Prospectus,
unless earlier redeemed. The Public Warrants are redeemable in
whole and not in part at a price of $0.01 per warrant upon a
minimum of 30 days’ notice after the warrants become
exercisable, only in the event that the last sale price of the
common stock exceeds $17.50 per share for any 20 trading days
within a 30-trading day period. If the Public Warrants are redeemed
by the Company, management will have the option to require all
holders that wish to exercise warrants to do so on a cashless
basis.
Registration Risk — In accordance with the warrant
agreement relating to the Public Warrants, the Company will be
required to use its best efforts to maintain the effectiveness of a
registration statement relating to common stock which would be
issued upon exercise of the Public Warrants. The Company will not
be obligated to deliver securities, and there are no contractual
penalties for failure to deliver securities, if a registration
statement is not effective at the time of exercise. Additionally,
in the event that a registration is not effective at the time of
exercise, the holders of such Public Warrants shall not be entitled
to exercise such Public Warrants (except on a cashless basis under
certain circumstances) and in no event (whether in the case of a
registration statement not being effective or otherwise) will the
Company be required to net cash settle or cash settle the Public
Warrants. Consequently, the Public Warrants may expire unexercised,
unredeemed and worthless.
Accounting — Because the Company is not required to
net cash settle the Public Warrants, the Public Warrants were
recorded at fair value and classified within stockholders’
equity as “Additional paid-in capital” upon their
issuance in accordance with FASB ASC Topic 815-40.
Underwriting
Discount
The
Company paid an underwriting discount of 2.0% of the public unit
offering price to the underwriters at the closing of the Public
Offering and is committed to pay to the underwriters an additional
fee of 3.5% of the gross offering proceeds payable upon the
Company’s consummation of a Business Combination. Such amount
is reflected as deferred offering compensation of $6,647,375 on the
consolidated balance sheet. The underwriters will not be entitled
to any interest accrued on the deferred discount.
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