UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the year ended December 31, 2007
Commission
File Number 001-33247
Geneva
Acquisition Corporation
(Exact
name of Registrant as specified in its charter)
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Delaware
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41-2207517
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification
Number)
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400
Crown Colony Drive, Suite 104
Quincy,
Massachusetts 02169
(Address
of principal executive offices)
(617)
933-1700
(Registrant’s
telephone number, including area code)
Securities
to be registered pursuant to Section 12(b) of the Act:
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Name
of each exchange
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Title
of each class
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on
which registered
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Units,
each consisting of one share of Common Stock, $0.0001 par value,
and two
Warrants
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American
Stock Exchange
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Common
Stock included in the Units
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American
Stock Exchange
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Warrants
included in the Units
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American
Stock Exchange
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Securities
registered pursuant to Section 12(g) of the Act:
None
(Title
of
class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act.
o
Yes
x
No
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
o
Yes
x
No
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
x
Yes
o
No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K.
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
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Large
accelerated filer
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Accelerated
filer
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Smaller
reporting company
x
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(Do
not check if a smaller
reporting
company)
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Indicate
by check mark whether the registrant is a shell company (as defined by
Rule 12b-2 of the Act).
x
Yes
o
No
The
aggregate market value of the voting common stock held by non-affiliates of
the
registrant computed by reference to the closing sales price for the registrant’s
common stock on June 30, 2007, as reported on the American Stock Exchange,
was
approximately $63,825,000.
The
number of shares of common stock outstanding as of March 26, 2008 was
14,000,000.
GENEVA
ACQUISITION CORPORATION
2007
ANNUAL REPORT ON FORM 10-K
TABLE
OF CONTENTS
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FORWARD-LOOKING
STATEMENTS
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1
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PART
I
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Item
1.
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Business
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2
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Item
1A.
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Risk
Factors
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12
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Item
1B.
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Unresolved
Staff Comments
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21
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Item
2.
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Properties
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22
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Item
3.
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Legal
Proceedings
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22
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Item
4.
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Submission
Of Matters To A Vote Of Security Holders
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22
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PART
II
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Item
5.
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Market
For Registrant’s Common Equity, Related Stockholder Matters And Issuer
Purchases Of Equity Securities
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22
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Item
6.
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Selected
Financial Data
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24
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Item
7.
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Management’s
Discussion And Analysis Of Financial Condition And Results Of
Operations
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24
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Item
7A.
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Quantitative
And Qualitative Disclosures About Market Risk
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27
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Item
8.
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Financial
Statements And Supplementary Data
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27
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Item
9.
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Changes
In And Disagreements With Accountants On Accounting And Financial
Disclosure
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27
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Item
9A.
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Controls
And Procedures
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28
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Item
9B.
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Other
Information
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28
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PART
III
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Item
10.
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Directors,
Executive And Corporate Governance
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28
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Item
11.
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Executive
Compensation
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32
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Item
12.
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Security
Ownership Of Certain Beneficial Owners And Management And Related
Stockholder Matters
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33
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Item
13.
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Certain
Relationships And Related Transactions, And Director
Independence
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36
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Item
14.
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Principal
Accountant Fees And Services
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37
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PART
IV
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Item
15.
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Exhibits
And Financial Statement Schedules
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38
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Index
to Financial Statements
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F-1
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SIGNATURES
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FORWARD-LOOKING
STATEMENTS
In
addition to historical information, this Annual Report on Form 10-K
contains statements relating to our future results (including certain
projections and business trends) that are “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
“
Securities
Act
”),
and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“
Exchange
Act
”),
and
are subject to the “safe harbor” created by those sections. Words such as
“anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,”
“will” and variations of such words and similar expressions are intended to
identify such forward-looking statements.
Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that could cause our actual results, performance or
achievements of, or industry results, to differ materially from any future
results, performance or achievement implied by such forward-looking
statements.
Factors
that might cause such differences include, but are not limited to, those
discussed in the section entitled “Risk Factors” set forth in Item 1A and
elsewhere in this report and those described from time to time in our other
filings with the Securities and Exchange Commission (the “
SEC
”),
including the Quarterly Reports on Form 10-Q to be filed by us in the
future. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management’s opinions only as of the
date hereof.
There
can
be no assurance that (i) we have correctly measured or identified all of
the factors affecting our business or the extent of these factors’ likely
impact, (ii) the available information with respect to these factors on
which such analysis is based is complete or accurate, (iii) such analysis
is correct or (iv) our strategy, which is based in part on this analysis,
will be successful.
We
undertake no obligation to revise or release publicly the results of any
revision to these forward-looking statements.
PART
I
General
Geneva
Acquisition Corporation (the “
Company
”)
was
incorporated in Delaware on June 2, 2006 as a “blank check” company whose
objective is to acquire or merge with an operating business. The SEC
defines such a company as “a development stage company” if it either has no
specific business plan or purpose or has indicated that its business plan is
to
engage in a merger or acquisition with an unidentified company or companies,
or
other entity or person, and it has issued “penny stock,” as defined in
Rule 3a51-1 under the Exchange Act. Many states have enacted statutes,
rules and regulations limiting the sale of securities of “blank check” companies
in their respective jurisdictions. The Company is subject to the risks
associated with development stage companies.
On
June 9, 2006, the then officers and directors of the Company (the
“
Initial
Stockholders
”)
purchased an aggregate of 2,500,000 shares of the Company’s common stock, par
value $.0001 per share (the “
Common
Stock
”),
at a
price of $.01 per share.
The
registration statement for the Company’s initial public offering (the
“
Initial
Public Offering
”)
was
declared effective on February 12, 2007 (the “
Effective
Date
”).
The
Company sold 11,500,000 Units (the “
Units
”)
in the
Initial Public Offering at a price of $6.00 per Unit. Each Unit consisted of
one
share of Common Stock, and two redeemable Common Stock purchase warrants (the
“
Public
Warrants
”).
Each
Public Warrant entitles the holder thereof to purchase one share of Common
Stock
at an exercise price of $5.00 commencing on the later of (i) the completion
of a
Business Combination (as hereinafter defined) and (ii) one year from the
Effective Date, in either case subject to there being an effective and current
registration statement relating to the shares issuable upon exercise of the
Warrants, and expiring four years from the Effective Date. The Company may
redeem the Public Warrants at a price of $.01 per Public Warrant upon
30 days’ notice after the Public Warrants become exercisable, only in the
event that the last sale price of the Common Stock is at least $8.50 per share
for any 20 trading days within a 30 trading day period ending on the third
day
prior to the date on which notice of redemption is given. Simultaneously with
the consummation of the Initial Public Offering on February 16, 2007,
certain officers, directors and Initial Stockholders of the Company purchased
an
aggregate of 2,923,077 warrants at $0.65 per warrant (the “
Private
Placement Warrants
”
and,
together with the Public Warrants, the “
Warrants
”)
from
the Company in a private placement (the “
Private
Placement
”).
The
Private Placement Warrants are identical to the Public Warrants, except that
if
the Company calls the warrants for redemption, the Private Placement warrants
will be exercisable on a cashless basis so long as they are still held by the
initial purchasers. The Company received aggregate net proceeds from the Private
Placement and the Initial Public Offering of approximately
$65,409,000.
In
connection with the Initial Public Offering, we issued a five- year option
(the
“
UPO
”)
to
Lazard Capital Markets LLC, the representative of the underwriters of our
Initial Public Offering, for $100, to purchase 700,000 Units (the “
UPO
Units
”).
The
UPO Units issuable upon exercise of the UPO are identical to the Units sold
in
the Initial Public Offering, except that the exercise price is $8.50 per UPO
Unit and except that the warrants contained in the UPO Units expire five years
from the Effective Date.
The
Company’s management has broad discretion with respect to the specific
application of the net proceeds of the Initial Public Offering, although
substantially all of the net proceeds of the Initial Public Offering are
intended to be generally applied toward consummating a business combination
with
an operating business through a merger, capital stock exchange, asset
acquisition or other similar business combination (a “
Business
Combination
”), which may not necessarily constitute a
majority
of the outstanding equity of such business and may not necessarily constitute
a
business combination for accounting purposes. Furthermore, there is
no
assurance that the Company will be able to successfully effect a Business
Combination. Upon the closing of the Initial Public Offering, $67,440,000,
including $2,070,000 of deferred underwriting discounts, was placed in a Trust
Account (the “
Trust Account
”), which has been invested in
government securities until the earlier of (i) the consummation of the
Company’s first Business Combination and (ii) the liquidation of the
Company. As of December 31, 2007, $69,053,581 was held in the Trust
Account, of which $2,070,000 was reserved for deferred underwriting discount
and
$3,010,345 represented earned investment income. We are entitled to receive
up to $1,600,000 from interest earned on the Trust Account (plus $50,000
received from the net proceeds of the Initial Public Offering) to finance our
operations prior to consummating a Business Combination. The placing of funds
in
the Trust Account may not protect those funds from third party claims against
the Company. Although the Company will seek to have all vendors, prospective
target businesses or other entities it engages, execute agreements with the
Company 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. Certain of the Company’s directors have severally agreed that
they will be personally liable under certain circumstances to ensure that the
proceeds in the Trust Account are not reduced by the claims of target businesses
or vendors or other entities that are owed money by the Company for services
rendered, contracted for or products sold to the Company. However, there can
be
no assurance that the directors will be able to satisfy those obligations.
The
remaining net proceeds (not held in the Trust Account), along with interest
earned on the Trust Account, may be used to pay for business, legal and
accounting due diligence on prospective acquisitions and the Company’s general
and administrative expenses. The Company, after signing a definitive agreement
for the acquisition of a target business, is required to submit such transaction
for stockholder approval. If stockholders owning 20% or more of the issued
and
outstanding shares of Common Stock vote against the Business Combination and
exercise their conversion rights described below, the prospective Business
Combination will not be consummated. All of the Company’s stockholders prior to
the Initial Public Offering have agreed to vote the shares of Common Stock
that
they own in accordance with the vote of the majority in interest of all other
stockholders of the Company
(the “
Public Stockholders
”) with respect to any
Business Combination. After consummation of a Business Combination, these voting
safeguards will no longer be applicable.
With
respect to a Business Combination that is approved by holders of the
requisite number of shares of Common Stock (as described above) and consummated,
any Public Stockholder who voted against the Business Combination may demand
that the Company convert his or her shares of Common Stock into cash. The per
share conversion price will equal the amount in the Trust Account, calculated
as
of two business days prior to the consummation of the proposed Business
Combination, divided by the number of shares of Common Stock held by Public
Stockholders
(including,
for this purpose, 250,000 shares of Common Stock contained in Units purchased
by
an Initial Stockholder in the Initial Public Offering).
Accordingly,
Public Stockholders holding 19.99% of the aggregate number of shares owned
by
all Public Stockholders may seek conversion of their shares in the event of
a
Business Combination. Such Public Stockholders are entitled to receive their
per
share interest in the Trust Account (subject to distributions for working
capital and amounts paid or accrued for taxes) computed without regard to the
shares held by Initial Stockholders
(other
than 250,000 shares of Common Stock contained in Units purchased by an Initial
Stockholder in the Initial Public Offering).
Accordingly, a portion of
the net proceeds from the Initial Public Offering (19.99% of the amount held
in
the Trust Account, excluding the deferred portion of the underwriters’ discount
and commission) has been classified as Common Stock subject to possible
conversion on the accompanying December 31, 2007 balance sheet. In
addition, such Public Stockholders would also be entitled to a pro rata portion
of the deferred portion of the underwriters’ discount and commission held in the
Trust Account.
The
Company’s Certificate of Incorporation provides that the Company will continue
in existence only until February 12, 2009, 24 months from the Effective
Date. If the Company has not completed a Business Combination by such date,
its
corporate existence will cease and it will dissolve and liquidate for the
purposes of winding up its affairs. In the event of liquidation, it is likely
that the per share value of the residual assets remaining available for
distribution (including Trust Account assets) may be less than the Initial
Public Offering price per share (assuming no value is attributed to the Public
Warrants) and may be less than the market value of the Common Stock from time
to
time.
At
December 31, 2007, the Company had not conducted any activity, other than
activity related to the Company’s formation, regulatory filings, the Initial
Public Offering and pursuing potential Business Combinations.
Strategy
Our
efforts have been focused on identifying a prospective target business that
manufactures or distributes products or specialty materials to, or provides
services within, the healthcare sector, as well as other sectors within the
experience and competencies of our management team. However, as described below,
we are not limited to consummating a Business Combination within any particular
sector or industry.
In
the
healthcare area, for instance,
Products
may
include but are not limited to:
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Medical
devices used in cardiovascular, orthopedic, gynecological, urological,
metabolic disease and neurovascular applications;
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Medical
devices used in drug delivery;
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In
vitro
and
in
vivo
diagnostic testing equipment and
reagents;
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Analytical
instruments and related consumables used in drug
development;
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Imaging
equipment and contrast agents;
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Supplies
and goods used or consumed in hospitals, nursing homes and home
healthcare; and
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Information
technology applications.
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Services
may include but are not limited to:
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Specialty
clinics;
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Rehabilitation
centers;
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Disease
management companies;
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Diagnostic
and laboratory services;
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Professional
provider organizations;
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Third
party administrators;
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Billing
services and electronic medical record maintenance;
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Imaging
centers;
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Private
hospitals;
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For-profit
hospices;
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Sterilization
services for surgical instruments;
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Health
maintenance organizations; and
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Home
healthcare providers.
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Specialty
or advanced materials
may include but are not limited
to:
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Biomaterials
for the repair and replacement of tissue;
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Metal
alloys for implantable devices such as stents, catheters and injection
ports;
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Innovative
contrast imaging agents;
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Nanoparticles
for drug delivery;
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Specialty
coatings;
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Compounding
and formulating ingredients and drugs; and
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Plastic
materials and synthetic
resins.
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The
examples identified above do not constitute an exhaustive list. In addition,
we
may consummate a Business Combination outside of the sectors in which management
may have direct experience if we believe it would be in our stockholders’ best
interest. If we consummate a Business Combination outside the specific areas
of
management’s experience, we may hire and rely upon third party consultants to
review or analyze the sector or industry in which a prospective target business
operates as appropriate.
Competitive
Strengths
We
believe that we will succeed in consummating a Business Combination with a
target business or businesses as a result of the following:
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We
are experienced transaction investors
. Our management team members,
including our officers and directors, have extensive experience
in
identifying and evaluating businesses, performing in-depth due
diligence,
negotiating with owners and management, structuring, financing
and closing
transactions in both public and private markets.
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We
have extensive public and private equity mergers and acquisitions
contacts
. Our management team has significant experience and contacts
in both public and private equity mergers and acquisitions. In
addition,
our management team has a network of business relationships with
executives and board members of privately and publicly held companies.
We
believe that these contacts will provide our management team with
target
candidates that may not be available to the broader
market.
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We
have management operating experience
. Our officers and directors have
transaction and operating experience in a variety of industries
within the
healthcare products and services, specialty materials and other
manufacturing sectors. We believe that this experience provides
us with a
competitive advantage in evaluating businesses and Business Combination
opportunities in these sectors. In addition, our officers and directors
have provided management oversight and served on the boards of
directors
of both acquiring as well as acquired private and public companies.
We
believe this experience will also assist us in evaluating whether
Business
Combination targets have the human and other resources necessary
to
compete successfully as publicly traded
companies.
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Based
upon the foregoing, we believe that as a well-financed public entity possessing
broad investment, transaction and operating expertise, we are well qualified
to
identify target companies and to complete a Business Combination.
Effecting
a Business Combination
General
Subject
to the limitations that a target business have a fair market value as reasonably
determined by our board of directors of at least 80% of our net assets at the
time of the Business Combination, as described below in more detail, we will
have substantial flexibility in identifying and selecting a prospective Business
Combination candidate. If our initial business combination involves a
transaction in which we acquire less than a 100% interest in the target
business, the fair market value of the interest we acquire must similarly be
equal to 80% of our net assets at the time of such Business
Combination.
We
are
seeking a Business Combination from among the following areas:
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Privately-Held
Companies
.
Owners of privately-held companies may seek to realize the value
of their
investments through a sale of their company to or merger with our
public
company.
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Portfolio
Companies of Private Equity Firms
.
Because most private equity funds must distribute their fund assets
following a fixed term of years, they may seek realizations through
the
sale or business combination of their portfolio companies with
us.
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Corporate
Restructurings
.
Corporate restructurings may present opportunities to acquire or
merge
with operating divisions or subsidiaries which no longer meet the
selling
corporation’s strategic direction.
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Fragmented
Industries
.
Various industries are characterized by a large number of small
to
mid-size firms in which consolidation opportunities may
arise.
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We
believe that we are qualified to pursue these types of Business Combination
targets due in part to the factors identified above. We are seeking target
companies that have the opportunity for growth through market expansion and
product development and that can potentially benefit from increased access
to
capital markets. We are seeking companies with existing executive management
teams that have demonstrated the ability to operate and profitably grow their
business. Although our management will endeavor to evaluate the risks inherent
in a particular target business, we cannot assure you that we will properly
ascertain or assess all significant risk factors.
Sources
of target businesses
We
anticipate that target business candidates may be brought to our attention
from
various unaffiliated sources, including investment bankers, intermediaries,
venture capital funds, private equity funds, management buyout funds and other
members of the financial community, who may present solicited or unsolicited
proposals. Our officers and directors as well as their affiliates may also
bring
to our attention target business candidates. Such individuals have a substantial
network of business executives, brokers and other intermediaries, entrepreneurs,
investment bankers, board members and advisors who may introduce us to potential
opportunities. In no event, however, will any of our existing officers,
directors or stockholders or any entity with which they are affiliated receive
any finder’s fee, consulting fee or other compensation from us or any third
party, including the prospective target, for services rendered prior to or
in
connection with the consummation of a business combination by our company.
Following a Business Combination, our management may receive a fee for
prospective services they may render to the target business, subject to the
approval of a majority of the disinterested members of our board of directors.
We expect that we may be contacted by unsolicited parties who become aware
of
our interest in prospective targets through press releases, word of mouth,
and
media coverage, should it develop. We may pay a finder’s fee to any unaffiliated
party that provides information regarding prospective targets to us. We
anticipate that such fees, if any, would be a percentage of the consideration
associated with such Business Combination, with the percentage to be determined
based on local market conditions at the time of such transaction.
Selection
of a target business and structuring of a Business Combination
Our
management will have virtually unrestricted flexibility in identifying and
selecting a prospective target business. Except for our focus on the healthcare
sector, we have not established any other specific attributes or criteria
(financial or otherwise) for prospective target businesses, except that a target
business have a fair market value as reasonably determined by our board of
directors of at least 80% of our net assets at the time of the Business
Combination. In searching for a target business, members of the financial
community and other contacts may bring to our attention prospective Business
Combination candidates that operate outside of the healthcare sector that we
may
pursue if we believe it would be in our stockholders’ best interests. We have no
time frame or monetary amount that would trigger our consideration of a target
business outside of the healthcare sector.
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In
evaluating
a prospective target business, our management will consider, among
other
factors, the following:
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financial
condition and results of operations;
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cash
flow potential;
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growth
potential;
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experience
and skill of management and availability of additional
personnel;
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capital
requirements;
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competitive
position;
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barriers
to entry;
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stage
of development of the products, processes or
services;
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regulatory
environment of the industry;
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regulatory
compliance of the target business;
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security
measures employed to protect technology, trademarks or trade
secrets;
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degree
of current or potential market acceptance of the products, processes
or
services;
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proprietary
features and degree of intellectual property or other protection
of the
products, processes or services; and
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costs
associated with effecting the Business
Combination.
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The
above
criteria are not intended to be exhaustive. Any evaluation relating to the
merits of a particular Business Combination will be based, to the extent
relevant, on the above factors as well as other considerations deemed relevant
by our management in effecting a Business Combination consistent with our
business objective. In evaluating a prospective target business, we will conduct
an extensive due diligence review which will encompass, among other things,
meetings with incumbent management and inspection of facilities, as well as
review of financial and other information which is made available to us. We
intend to have all 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.
We
will
endeavor to structure a Business Combination so as to achieve the most favorable
tax treatment to us, the target business and its stockholders. The time and
costs required to select and evaluate a target business and to structure and
complete the Business Combination cannot presently be ascertained with any
degree of certainty. Any costs incurred with respect to the identification
and
evaluation of a prospective target business with which a Business Combination
is
not ultimately completed will result in a loss to us and reduce the amount
of
capital available otherwise to complete a Business Combination.
Fair
market value of target business
The
target business that we consummate a Business Combination with must have a
fair
market value equal to at least 80% of our net assets at the time of such
transaction, although we may consummate a Business Combination with a target
business whose fair market value significantly exceeds 80% of our net assets.
In
order to consummate such a Business Combination, we may issue a significant
amount of our debt or equity securities to the sellers of such businesses and/or
seek to raise additional funds through a private offering of debt or equity
securities. If our initial Business Combination involves a transaction in which
we acquire less than a 100% interest in the target business, the fair market
value of the interest we acquire must similarly be equal to 80% of our net
assets at the time of such Business Combination. The fair market value of any
Business Combination will be determined by our board of directors based upon
standards generally accepted by the financial community, such as actual and
potential sales, earnings and cash flow and book value. If our board is not
able
independently to determine that the target business has a sufficient fair market
value, we will obtain an opinion from an unaffiliated, independent investment
banking firm with respect to the satisfaction of such criteria. Since any
opinion, if obtained, would likely only state that fair market value meets
the
80% of net assets threshold, it is not anticipated that copies of such opinion
would be distributed to our stockholders, although copies of such opinion will
be provided to stockholders who request it. We will not be required to obtain
an
opinion from an investment banking firm as to the fair market value if our
board
of directors independently determines that the target business complies with
the
80% threshold.
Probable
lack of business diversification
While
we
may seek to effect Business Combinations with more than one target business,
our
initial Business Combination must be with one or more target businesses that
satisfies the minimum valuation standard at the time of such Business
Combination, as discussed above. It is probable that we will have the ability
to
effect only a single Business Combination. Accordingly, the prospects for our
success may be entirely dependent upon the future performance of a single
business. Unlike other entities which may have the resources to complete several
Business Combinations of entities operating in multiple industries or multiple
areas of a single industry, it is probable that we will not have the resources
to diversify our operations or benefit from the possible spreading of risks
or
offsetting of losses. By consummating a Business Combination with only a single
entity, our lack of diversification may:
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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 a business combination;
and
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result
in our dependency upon the development or market acceptance of a
single or
limited number of products, processes or
services.
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If
we
determine to acquire simultaneously several businesses and such businesses
are
owned by different sellers, we will need for each of such sellers to agree
that
our purchase of its business is contingent on the simultaneous closings of
the
other acquisitions, which may make it more difficult for us, and delay our
ability, to complete the Business Combination. With multiple acquisitions,
we
could also face additional risks, including additional burdens and costs with
respect to possible multiple negotiations and due diligence investigations
(if
there are multiple sellers) and the additional risks associated with the
subsequent assimilation of the operations and services or products of the
acquired companies in a single operating business.
Limited
ability to evaluate the management of a target business
Although
we intend to evaluate closely the management of a prospective target business
when evaluating the desirability of effecting a Business Combination, we cannot
assure you that our assessment of the target business’ management will prove to
be correct. In addition, we cannot assure you that the future management will
have the necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of our officers and directors, if any,
in
the target business cannot presently be stated with any certainty. While it
is
possible that one or more of our officers or directors will remain associated
in
some capacity with us following a business combination, it is unlikely that
any
of them will devote their full efforts to our affairs subsequent to a Business
Combination. Moreover, they would only be able to remain with us after the
consummation of a Business Combination if they are able to negotiate employment
or consulting agreements in connection with the Business Combination. Such
negotiations would take place simultaneously with the negotiation of the
Business Combination and could provide for them to receive compensation in
the
form of cash payments and/or our securities for services they would render
to us
after the consummation of the Business Combination. While the personal and
financial interests of our key personnel may influence their motivation in
identifying and selecting a target business, their ability to remain with us
after the consummation of a Business Combination will not be the determining
factor in our decision as to whether or not we will proceed with any potential
business combination. Additionally, we cannot assure you that our officers
and
directors will have significant experience or knowledge relating to the
operations of the particular target business.
Following
a Business Combination, we may seek to recruit additional managers to supplement
the incumbent management of the target business. We cannot assure you that
we
will have the ability to recruit additional managers, or that additional
managers will have the requisite skills, knowledge or experience necessary
to
enhance the incumbent management.
Opportunity
for stockholder approval of Business Combination
Prior
to
the completion of a 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.
In
connection with any such transaction, we will also submit to our stockholders
for approval a proposal to amend our Certificate of Incorporation to provide
for
our corporate life to continue perpetually following the consummation of such
Business Combination. Any vote to extend our corporate life perpetually will
be
taken only in connection with a vote to approve a Business Combination and
will
take effect only if stockholders approve both the extension of our corporate
life and the Business Combination.
In
connection with seeking stockholder approval of a Business Combination, we
will
furnish our stockholders with proxy solicitation materials prepared in
accordance with the Exchange Act which, among other matters, will include a
description of the operations of the target business and audited historical
financial statements of the business.
In
connection with the vote required for any Business Combination, all of our
Initial Stockholders, including all of our officers and directors, have agreed
to vote the shares of Common Stock owned by them in accordance with the majority
of the shares of Common Stock voted by the Public Stockholders. We will proceed
with the business combination only if a majority of the shares of Common Stock
voted by the Public Stockholders are voted in favor of the Business Combination
and Public Stockholders owning less than 20% of the outstanding shares of our
Common Stock both vote against the Business Combination and exercise their
conversion rights.
Conversion
rights
At
the
time we seek stockholder approval of any Business Combination, we will offer
each Public Stockholder the right to have such stockholder’s shares of Common
Stock converted to cash if such stockholder votes against the Business
Combination and the Business Combination is approved and completed. Our Initial
Stockholders will not have such conversion rights with respect to any shares
of
Common Stock owned by them. The actual per share conversion price will be equal
to the amount in the Trust Account, inclusive of any interest not distributed
to
us for working capital or paid or accrued for taxes (calculated as of two
business days prior to the consummation of the proposed Business Combination),
divided by the number of shares of Common Stock sold in the Initial Public
Offering
.
As of
December 31, 2007, the estimated per share conversion price was approximately
$5.90.
An
eligible stockholder may request conversion at any time after the mailing to
our
stockholders of the proxy statement relating to a proposed Business Combination
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 Business Combination and the Business Combination
is approved and completed. Any request for conversion, once made, may be
withdrawn at any time up to the date of the stockholders meeting. It is
anticipated that the funds to be distributed to stockholders entitled to convert
their shares who elect conversion will be distributed promptly after completion
of a Business Combination. Public Stockholders who convert their stock into
cash
will still have the right to exercise any Public Warrants that they own. We
will
not complete any Business Combination if Public Stockholders owning 20% or
more
of the outstanding shares of Common Stock both vote against a Business
Combination and exercise their conversion rights. Accordingly, it is our
understanding and intention in every case to structure and consummate a Business
Combination in which Public Stockholders owning 19.99% of the outstanding shares
of Common Stock may exercise their conversion rights and the Business
Combination will still go forward.
Liquidation
if no Business Combination
Our
Certificate of Incorporation provides that we will continue in existence only
until February 12, 2009. This provision may not be amended except in
connection with the consummation of a Business Combination. If we have not
completed a Business Combination by such date, under our Certificate of
Incorporation, 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. 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 vote
formally to approve our dissolution and liquidation and to have filed a
certificate of dissolution with the Delaware Secretary of State).
If
we are
unable to complete a Business Combination by February 12, 2009, we will
distribute to our stockholders, in proportion to their respective equity
interests, a sum equal to the amount in the Trust Account, inclusive of any
interest, plus any remaining net assets (subject to our obligations under
Delaware law to provide for claims of creditors as described below). We
anticipate notifying the trustee of the Trust Account to begin liquidating
such
assets within 10 business days after such date. Our Initial Stockholders have
waived their rights to participate in any liquidation distribution with respect
to any shares of Common Stock
purchased
by them prior to the Initial Public Offering or purchased privately from the
Company by them simultaneously with the Initial Public Offering. The Initial
Stockholders will be entitled to participate in any liquidation distribution
with respect to any shares purchased in the Initial Public Offering and
thereafter. Our Chairman of the Board purchased 250,000 Units in the Initial
Public Offering
. There will be no distribution from the Trust Account
with respect to our Warrants, which will expire worthless in the event of
liquidation. We will pay the costs of liquidation from our remaining assets
outside of the Trust Account. If such funds are insufficient, our Initial
Stockholders have agreed to advance us the funds necessary to complete such
liquidation (currently anticipated to be no more than approximately $15,000)
and
will not seek repayment of such expenses.
As
of
December 31, 2007, the estimated per share conversion price was approximately
$5.90. As described below, the amount deposited in the Trust Account could,
however, become subject to the claims of any
bona
fide
creditor
which would be prior to the claims of our Public Stockholders in the absence
of
a legally enforceable waiver agreement with such creditor or valid defenses
against such claims. However, because we are a blank check company, rather
than
an operating company, and our operations are limited to searching for
prospective target businesses to consummate a Business Combination with,
the only claims likely to arise would be from our vendors and service providers
(such as accountants, lawyers, investment bankers, etc.) and potential target
businesses. As described above, we intend to have all vendors, service providers
and prospective target businesses execute agreements with us waiving any right,
title, interest or claim of any kind they may have in or to any monies held
in
the Trust Account. As a result, 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. If we liquidate before the
completion of a Business Combination and distribute the proceeds held in trust
to our Public Stockholders, James E. McGrath, our President and a director,
John
F. Rousseau, Jr., our Chief Operating Officer and a director, Edwin Snape,
a
director, Gregory F. Zaic, our Treasurer, Vincent T. Pica II, our Chairman
of
the Board, and Thomas E. Hancock, our Vice President of Business Development,
have agreed to indemnify us from claims by a vendor that would reduce the amount
of funds held in the Trust Account. Under these circumstances, our board of
directors would have a fiduciary obligation to our stockholders to bring a
claim
against Messrs. Pica, McGrath, Rousseau, Snape, Hancock and Zaic if they
failed to perform their indemnification obligations. In addition, a stockholder
would have a right to bring a derivative action to compel us to initiate a
claim
for indemnification against such individuals. We cannot assure you that the
waiver agreements we have signed and intend to sign with potential target
businesses and third party venders will be legally enforceable in all
circumstances, or that Messrs. McGrath, Rousseau, Snape, Zaic, Pica and
Hancock will be able to satisfy their indemnity obligations in all instances.
As
a result, due to potential claims of creditors, we can make no assurances as
to
the actual per share liquidation amount that Public Stockholders would receive
in the event of our liquidation.
In
addition, if we are forced to file a bankruptcy case or an involuntary
bankruptcy case is filed against us which is not dismissed, or a trustee or
receiver is appointed pursuant to applicable Delaware law, the proceeds held
in
the Trust Account could be subject to applicable bankruptcy law or equitable
claims filed in Delaware Chancery Court, and may be subject to the claims of
third parties with priority over the claims of our stockholders. To the extent
any such bankruptcy or equitable claims deplete the Trust Account, we cannot
assure you we will be able to return to our stockholders at least $5.90 per
share.
Our
stockholders will be entitled to receive funds from the Trust Account only
in
the event of our liquidation or if the Public Stockholders seek to convert
their
respective shares into cash upon a Business Combination which the Public
Stockholder voted against and which is completed by us. In no other
circumstances will a stockholder have any right or interest of any kind to
or in
the Trust Account.
Under
the
Delaware General Corporation Law, stockholders may be held liable for claims
by
third parties against a corporation to the extent of distributions received
by
them in a dissolution. If the corporation complies with certain procedures
set
forth in Section 280 of the Delaware General Corporation Law intended to
ensure that it makes reasonable provision for all claims against it, including
a
60-day notice period during which any third party claims can be brought against
the corporation, a 90-day period during which the corporation may reject any
claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with
respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the
stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. However, as stated above, it is our
intention to make liquidating distributions to our stockholders as soon as
reasonably possible after dissolution and, therefore, we do not intend to comply
with those procedures. As such, our stockholders could potentially be liable
for
any claims to the extent of distributions received by them (but no more) in
a
dissolution and any liability of our stockholders may extend beyond the third
anniversary of such dissolution. In no event will we distribute funds to our
Initial Stockholders on account of their Private Placement Warrants, or to
the
Public Warrant holders on account of the Public Warrants, in the event of our
liquidation if we are unable to complete a Business Combination within the
time
frame described in our Certificate of Incorporation.
Because
we will not be complying with Section 280, Section 281(b) of the
Delaware General Corporation Law requires us to adopt a plan of dissolution
that
will provide for our payment, based on facts known to us at such time, of
(i) all existing claims, (ii) all pending claims and (iii) all
claims that may be potentially brought against us within the subsequent
10 years. Accordingly, we would be required to provide for any claims of
creditors known to us at that time or those that we believe could be brought
against us within the subsequent 10 years prior to our distributing the funds
in
the Trust Account to our public stockholders. Our Board of Directors will
reserve funds from the $1,650,000 available for our working capital to provide
for creditor claims in the event of our liquidation, pursuant to our obligations
under Delaware General Corporation Law. As discussed above, because we are
a
blank check company, rather than an operating company, and our operations are
limited to searching for prospective target businesses to consummate a Business
Combination with, we believe the only likely claims to arise would be from
our
vendors and service providers (such as accountants, lawyers, investment bankers,
etc.) and potential target businesses. As described above, we intend to have all
vendors, service providers and prospective target businesses execute agreements
with us waiving any right, title, interest or claim of any kind they may have
in
or to any monies held in the Trust Account. However, we cannot guaranty that,
even if such entities execute such agreements with us, they will not seek
recourse against the Trust Account. In addition, a court could conclude that
such agreements are not legally enforceable. We believe that such possibilities
are unlikely and, accordingly, that any necessary provision for creditors should
be minimal and should not have a significant impact on our ability to distribute
funds from the Trust Account to our stockholders. Nevertheless, we can make
no
assurances as to the actual per share liquidation amount that Public
Stockholders would receive in the event of our liquidation.
If
we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, the proceeds held in the Trust Account could
be subject to applicable bankruptcy law, and may be included in our bankruptcy
estate and subject to the claims of third parties with priority over the claims
of our stockholders, thereby decreasing the per share liquidation amount that
Public Stockholders would receive in the event of our liquidation. Additionally,
if we are forced 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 February
12, 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 board of directors may be viewed
as having breached their fiduciary duties to our creditors and/or as having
acted in bad faith, and thereby exposing itself and the Company to damage claims
by paying Public Stockholders from the Trust Account prior to addressing the
claims of creditors. We cannot assure you that claims will not be brought
against us for these reasons.
Competition
In
identifying, evaluating and selecting a target business, we may encounter
intense competition from other entities having a business objective similar
to
ours including other blank check companies, private equity groups, 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. Many of these competitors possess
greater technical, human and other resources than us and our financial resources
will be relatively limited when contrasted with those of many of these
competitors. Our ability to compete in consummating a Business Combination
with
certain sizable target businesses will be limited by our available financial
resources. This inherent competitive limitation gives others an advantage in
pursuing target businesses. Furthermore:
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our
obligation to seek stockholder approval of a Business Combination
may
delay or threaten the completion of a
transaction;
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our
obligation to convert into cash shares of Common Stock held by our
Public
Stockholders in certain instances may reduce the resources available
to us
for a Business Combination;
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our
outstanding Warrants and the UPO, and the future dilution they potentially
represent, may not be viewed favorably by certain target businesses;
and
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our
limited ability to fund a no shop fee may place us at a disadvantage
vis-à-vis a private equity or buy-out firm that may not be subject to
our
working capital restrictions.
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Any
of
these factors may place us at a competitive disadvantage in successfully
negotiating a Business Combination. If we succeed in effecting a Business
Combination, there will be, in all likelihood, intense competition from
competitors of the target business. We cannot assure you that, subsequent to
a
Business Combination, we will have the resources or ability to compete
effectively.
Employees
We
have
five executive officers: James E. McGrath, our President and a director, John
F.
Rousseau, Jr., our Chief Operating Officer and a director, Gregory F. Zaic,
our
Treasurer, Vincent T. Pica II, our Chairman of the Board, and Thomas E. Hancock,
our Vice President of Business Development. Our executive officers are not
obligated to devote any specific number of hours to our matters. Although
Messrs. McGrath, Rousseau, Zaic and Hancock devote a substantial amount of
time to the search for, and due diligence with respect to, a target business,
the amount of time they or any of our officers will devote in any time period
will vary based on the availability of suitable target businesses to
investigate. We do not intend to have any full time employees prior to the
consummation of a Business Combination.
ITEM
1A.
RISK
FACTORS
We
are a development stage company with no operating history and, accordingly,
you
will not have any basis on which to evaluate our ability to achieve our business
objective.
We
are a
recently formed development stage company with no operating results to date.
Because we lack an established operating history, you have no basis on which
to
evaluate our ability to achieve our business objective of completing a Business
Combination with one or more target businesses. We have no plans, arrangements
or understandings with any specific acquisition candidates and may be unable
to
complete a Business Combination. We will not generate any revenues until, at
the
earliest, after the consummation of a Business Combination. We cannot assure
you
as to when or if a Business Combination will occur.
If
we are forced to liquidate and distribute the Trust Account, our Public
Stockholders may receive less than they paid to purchase their shares of Common
Stock and our Warrants will expire worthless.
If
we are
unable to complete a Business Combination by February 12, 2009 and are forced
to
liquidate our assets, we can make no assurances as to the per share liquidation
amount that stockholders would receive. Such per share liquidation distribution
may be less than the price paid by stockholders to purchase our Common Stock
because of, among other things, the expenses of our Initial Public Offering,
our
general and administrative expenses and the costs of seeking a Business
Combination. Furthermore, there will be no distribution with respect to our
outstanding Warrants, which will expire worthless if we liquidate before the
completion of a Business Combination.
If
the interest from the net proceeds of our Public Offering held in trust is
insufficient to allow us to operate for at least 24 month following the
Effective Date, we may be unable to complete a Business Combination and may
be
forced to liquidate.
We
believe that the funds available to us outside of the Trust Account, plus the
interest earned on the funds held in the Trust Account that may be available
to
us, will be sufficient to allow us to operate until at least February 12,
2009, assuming that a Business Combination is not consummated prior to that
date. However, we cannot assure you that our estimates are accurate. We could
use a portion of the funds available to us to pay fees to consultants to assist
us with our search for a target business. We could also use a portion of the
funds as a down payment or to fund a “no-shop” provision (a provision in letters
of intent designed to keep target businesses from soliciting offers from other
companies on terms more favorable to such target businesses) with respect to
a
particular proposed Business Combination, although we do not have any current
intention to do so. If we entered into a letter of intent where we paid for
the
right to receive exclusivity from a target business and were subsequently
required to forfeit such funds (whether as a result of our breach or otherwise),
we might not have sufficient funds to continue searching for, or conduct due
diligence with respect to, a new target business.
Because
there are numerous companies with a business plan similar to ours seeking to
effectuate a business combination, it may be more difficult for us to do
so.
In
identifying, evaluating and selecting a target business, we may encounter
intense competition from other entities having a business objective similar
to
ours including other blank check companies, private equity groups, 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. Many of these competitors possess
greater technical, human and other resources than us and our financial resources
will be relatively limited when contrasted with those of many of these
competitors. Our ability to compete in consummating a Business Combination
with
certain sizable target businesses will be limited by our available financial
resources. This inherent competitive limitation gives others an advantage in
pursuing target businesses. Furthermore:
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our
obligation to seek stockholder approval of a Business Combination
may
delay or threaten the completion of a
transaction;
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our
obligation to convert into cash shares of Common Stock held by our
Public
Stockholders in certain instances may reduce the resources available
to us
for a Business Combination;
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our
outstanding Warrants and the UPO, and the future dilution they potentially
represent, may not be viewed favorably by certain target businesses;
and
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our
limited ability to fund a no shop fee may place us at a disadvantage
vis-à-vis a private equity or buy-out firm that may not be subject to
our
working capital restrictions.
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We
cannot
assure you that we will be able to compete successfully for an attractive
Business Combination. In addition, because of this competition, we cannot assure
you that we will be able to effectuate a Business Combination within the
required time period, in which case we will be forced to liquidate.
Since
we have not yet selected a particular target business, we are unable currently
to ascertain the merits or risks of the operations of any particular target
business or the industry in which we may ultimately
operate.
While
we
are focusing our search for target businesses in the healthcare sector, we
may
consummate a Business Combination with a company in any industry we choose
and
are not limited to any particular industry or type of business. Accordingly,
there is no reliable basis for you currently to evaluate the possible merits
or
risks of the particular industry in which we may ultimately operate or the
target business which we may ultimately consummate a Business Combination with.
If we complete a Business Combination with an entity in an industry
characterized by a high level of risk, we may be affected by the currently
unascertainable risks of that industry. Although our management will endeavor
to
evaluate the risks inherent in a particular industry or target business, we
cannot assure you that we will properly ascertain or assess all of the
significant risk factors.
Our
officers and directors will allocate their time to other businesses, thereby
causing potential conflicts of interest in their determination as to how much
time to devote to our affairs, which could have a negative impact on our ability
to consummate a Business Combination.
Our
officers and directors are not required to 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. This could have a negative effect
on our ability to consummate a Business Combination. We do not intend to have
any full time employees prior to the consummation of a Business Combination.
Although our executive officers expect to devote substantial time to our
business, they are engaged in other business endeavors and are not obligated
to
contribute any specific number of hours to our affairs. If our executive
officers’ or directors’ other business affairs require them to devote more
substantial amounts of time to such affairs, it could limit their ability to
devote time to our affairs and could have a negative impact on our ability
to
consummate a Business Combination.
A
business we select may be subject to extensive government regulation and
government or private insurance reimbursement policies, which could negatively
impact our operations if we are successful in completing a Business
Combination.
Certain
industries in which a target business we select may operate could be extensively
regulated by the federal government and any states in which such business has
operations. We cannot assess which laws and regulations may apply to a target
business because we have not identified a specific target business and do not
know in which industry a potential target business may operate. The existence
of
government regulations that apply to a potential target business, or changes
in
such regulations, which are subject to occur, could create delays in bringing
products or services to market, affect a target business’ ability to grow into
new markets, and impose costs that would affect profitability, among other
things. In addition, the failure to properly comply with government regulations
could subject a target business to fines and penalties.
A
target
business in the healthcare sector may be subject to Medicaid and Medicare
reimbursement policies and reimbursement policies of private insurers. To the
extent a target business’s revenues are dependent on reimbursement from Medicare
or Medicare programs or from private insurers, we would be subject to additional
risks inherent in reliance on reimbursement from these sources. These risks
include the possible inability to recover fully charges for the products or
services a target business sells or provides, costs of compliance with
government and private reimbursement policies, and possible delays in obtaining
reimbursement, all of which could materially and adversely affect a target
business’s cash flow and profitability.
If
we effect a Business Combination with a company located outside the United
States, we would be subject to a variety of additional risks that may negatively
impact our operations.
We
may
effect a Business Combination with a company located outside the United States.
If we do, we would be subject to any special considerations or risks associated
with companies operating in the target business’s home jurisdiction, including
any of the following:
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rules
and regulations or currency conversion or corporate withholding
taxes on
individuals;
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tariffs
and trade barriers;
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regulations
related to customs and import/export mattes;
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longer
payment cycles;
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tax
issues, such as tax law changes and variations in tax laws as compared
to
the United States;
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currency
fluctuations;
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challenges
in collecting accounts receivable;
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cultural
and language differences; and
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employment
regulations.
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We
cannot
assure you that we would be able adequately to address these additional risks.
If we were unable adequately to address these additional risks, our business
operations might suffer.
We
may not be able to consummate a Business Combination within the required time
frame, in which case we would be forced to liquidate.
We
must
complete a Business Combination with a fair market value, as determined in
the
reasonable discretion of our board of directors, of at least 80% of our net
assets at the time of the transaction by February 12, 2009. If we fail to
consummate a Business Combination within the required time frame, we will be
forced to liquidate our assets. 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 a Business
Combination.
Our
board of directors may not accurately determine the fair market value of a
targeted acquisition, and, as a result, we may pay more than what the target
business is actually worth.
Fair
market value of the target company will be determined in the reasonable
discretion of our board of directors. Our board of directors may, but is not
required to, obtain an opinion from an investment banking firm or other
valuation expert to confirm its determination of fair market value. If our
board
of directors, or any investment banking firm or other expert upon whose opinion
our board may rely, overestimates the fair market value of a company that we
consummate a Business Combination with, then the value of our securities could
be adversely affected.
You
will not receive protections normally afforded to investors of blank check
companies.
Since
the
net proceeds of our Initial Public Offering are designated for completing a
Business Combination with a target business that has not been identified, we
may
be deemed to be a “blank check” company under the United States securities laws.
However, we believe that we are exempt from rules adopted by the SEC to protect
investors in blank check companies. Accordingly, investors will not be afforded
the benefits or protections of those rules.
If
third parties bring claims against us, the proceeds held in trust could be
reduced and the per share liquidation price received by stockholders could
be
less than the price paid by investors to purchase shares of Common
Stock.
Our
placing of funds in trust may not protect those funds from third party claims
against us. Although we will seek to have all vendors, prospective target
businesses or other entities we engage execute agreements with us waiving 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, there is no guarantee
that, they will execute such agreements, nor is there any guarantee that such
third parties will not seek recourse against us even if they do execute such
agreements. A court could also conclude that such agreements are not legally
enforceable. Accordingly, the proceeds held in trust could be subject to claims
that would take priority over those of our stockholders. If we liquidate
before the completion of a Business Combination and distribute the proceeds
held
in trust to our stockholders, Messrs. McGrath, Rousseau, Hancock, Zaic and
Pica and Dr. Snape have agreed to indemnify us against any claims by any
vendor, prospective target business or other entity that is owed money from
us
for services rendered or products sold to us that would reduce the amount of
the
funds in the Trust Account. Under these circumstances, our board of directors
would have a fiduciary obligation to our stockholders to bring a claim against
Messrs. McGrath, Rousseau, Hancock, Zaic and Pica and Dr. Snape if they
fail to perform their indemnification obligations. In addition, a stockholder
would have a right to bring a derivative action to compel us to initiate a
claim
for indemnification against such individuals. Because we will seek to have
all
vendors and prospective target businesses execute agreements with us waiving
any
right, title, interest or claim of any kind they may have in, or to any moneys
held in, the Trust Account, we believe the likelihood of such officers and
directors having any obligation to indemnify us is minimal. Notwithstanding
the
foregoing, we have questioned such officers and directors concerning their
financial information. Based on the foregoing, we believe that such individuals
have funds sufficient to satisfy their obligations, but cannot assure you that
they will be able to satisfy those obligations in all instances. Moreover,
we
cannot assure you that the indemnification agreements with these individuals
will cover all possible claims against the Company. Therefore, there may be
claims for which no indemnification is available. Accordingly, we can make
no
assurances as to the actual per share liquidation amount that Public
Stockholders would receive in the event of our liquidation.
In
addition, if we are forced to file a bankruptcy case or an involuntary
bankruptcy case is filed against us which is not dismissed, the proceeds held
in
the Trust Account could be subject to applicable bankruptcy law, and may be
included in our bankruptcy estate and subject to the claims of third parties
with priority over the claims of our stockholders, thereby depleting some or
all
of the Trust Account.
Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them.
Our
Certificate of Incorporation provides that we will continue in existence only
until 24 months after the Effective Date, February 12, 2009. If we
have not completed a Business Combination by such date and amended this
provision in connection therewith, pursuant to the Delaware General Corporation
Law, our corporate existence will cease except for the purposes of winding
up
our affairs and liquidating. Under Sections 280 through 282 of the Delaware
General Corporation Law, stockholders may be held liable for claims by third
parties against a corporation to the extent of distributions received by them
in
a dissolution. If the corporation complies with certain procedures set forth
in
Section 280 of the Delaware General Corporation Law intended to ensure that
it makes reasonable provision for all claims against it, including a 60-day
notice period during which any third party claims can be brought against the
corporation, a 90-day period during which the corporation may reject any claims
brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with
respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the
stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. However, if we do not complete a Business
Combination on or prior to February 12, 2009, it is our intention to make
liquidating distributions to our stockholders as soon as reasonably possible
thereafter and, therefore, we do not intend to comply with those procedures.
Because we will not be complying with those procedures, we are required,
pursuant to Section 281 of the Delaware General Corporation Law, to adopt a
plan that will provide for the payment, based on facts known to us at such
time,
of (i) all existing claims, (ii) all pending claims and (iii) all
claims that may be potentially brought against us within the subsequent
ten years. Accordingly, we would be required to provide for any creditors
known to us at that time as well as provide for any claims that we believe
could
potentially be brought against us within the subsequent ten years prior to
distributing the funds held in the trust to stockholders. 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 distributions received by them (but no more) and any liability of
our
stockholders may extend well beyond the third anniversary of such date.
Accordingly, we cannot assure you that third parties will not seek to recover
from our stockholders amounts owed to them by us.
In
addition, if we are forced 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 also 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 February 12, 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 board
of
directors may be viewed as having breached their fiduciary duties to our
creditors and/or as having acted in bad faith, and thereby exposing itself
and
the Company to damage claims, by paying Public Stockholders from the Trust
Account prior to addressing the claims of creditors. We cannot assure you that
claims will not be brought against us or our stockholders for these
reasons.
We
may issue shares of our capital stock to complete a Business Combination, which
would reduce the equity interest of our current stockholders and could likely
cause a change in control of our ownership.
Our
Certificate of Incorporation authorizes the issuance of up to 60,000,000 shares
of Common Stock, and 1,000,000 shares of preferred stock, par value $.0001
per
share. There are 17,976,923 authorized but unissued shares of our Common Stock
available for issuance (after appropriate reservation for the issuance of shares
upon full exercise of our outstanding Warrants and the UPO granted to the
representative of the underwriters of our Initial Public Offering) and all
of
the 1,000,000 shares of preferred stock are available for issuance. Although
we
have no commitments as of the date hereof to issue our securities, we may issue
a substantial number of additional shares of our Common Stock or preferred
stock, a combination of common and preferred stock, or debt securities (in
addition to paying cash), to complete a Business Combination. The issuance
of
additional shares of our Common Stock or any number of shares of our preferred
stock:
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may
significantly reduce your equity interest in the
Company;
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may
subordinate the rights of holders of Common Stock if the preferred
stock
is issued with rights senior to those afforded to our Common
Stock;
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could
likely cause a change in control if a substantial number of our shares
of
Common Stock are issued, which may affect, among other things, our
ability
to use our net operating loss carryforwards, if any, and most likely
also
result in the resignation or removal of our present officers and
directors; and
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may
adversely affect prevailing market prices for our Common
Stock.
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Under
Delaware law, certain requirements and restrictions contained in our Certificate
of Incorporation may be amended, which could reduce or eliminate the protection
afforded to our stockholders by such requirements and
restrictions.
Our
Certificate of Incorporation sets forth certain requirements and restrictions
that apply to us until the consummation of a Business Combination. Specifically,
our Certificate of Incorporation provides, among other things,
that:
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prior
to the consummation of our initial Business Combination, we must
submit
such Business Combination to our stockholders for
approval;
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we
may consummate our initial Business Combination only if: (i) approved
by a majority of the shares of Common Stock voted by the Public
Stockholders, (ii) a majority of our stockholders vote in favor of
the amendment to extend our corporate life described above, and
(iii) Public Stockholders owning less than 20% of the outstanding
shares of Common Stock both vote against the Business Combination
and
exercise their conversion rights;
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if
our initial Business Combination is approved and consummated, Public
Stockholders who voted both against the Business Combination and
exercised
their conversion rights will receive their pro rata share of the
Trust
Account;
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if
a Business Combination is not consummated by February 12, 2009, we
will be liquidated and will distribute to our Public Stockholders
their
pro rata share of the Trust Account;
and
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we
may not consummate any other merger, capital stock exchange, stock
purchase, asset acquisition or similar transaction other than a Business
Combination that meets certain conditions, including the requirement
that
our initial Business Combination be with one or more operating businesses
whose fair market value, either individually or collectively, is
equal to
at least 80% of our net assets at the time of such Business
Combination.
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Our
Certificate of Incorporation prohibits the amendment of the above-described
provisions. However, the validity of provisions prohibiting amendment of a
certificate of incorporation under Delaware law has not been settled. A court
could conclude that the prohibition on amendment violates the stockholders’
implicit rights to amend the corporate charter. In that case, the
above-described provisions would be amendable 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 we will
not take any actions to waive or amend any of these provisions.
We
may issue debt securities to effect a Business Combination, which could subject
us to risks associated with debtors.
We
may
issue indebtedness in connection with a Business Combination. If we issue debt
securities, it could result in:
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default
and foreclosure on our assets if our operating revenues after a Business
Combination were insufficient to service our debt
obligations;
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acceleration
of our obligations to repay the indebtedness even if we have made
all
principal and interest payments when due if the debt security contains
covenants that require the maintenance of certain financial ratios
or
reserves and any such covenant is breached without a waiver or
renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any,
if the
debt security is payable on demand;
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our
inability to obtain additional financing, if necessary, if the debt
security contains covenants restricting our ability to obtain additional
financing while such security is
outstanding;
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increased
vulnerability to adverse changes in general economic, industry and
competitive conditions and adverse changes in government
regulation;
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limitations
on our ability to borrow additional amounts for working capital,
capital
expenditures, acquisitions, debt service requirements, execution
of our
strategy or other purposes; and
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other
disadvantages compared to our competitors who have less
debt.
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The
ability of our stockholders to exercise their conversion rights may not allow
us
to effect the most desirable Business Combination or optimize our capital
structure.
At
the
time we seek stockholder approval of any Business Combination, we will offer
each Public Stockholder (but not our Initial Stockholders) the right to have
such Public Stockholder’s shares of Common Stock converted to cash if the
stockholder votes against the Business Combination and the Business Combination
is subsequently approved and completed. Such holder must both vote against
such
Business Combination and then exercise such stockholder’s conversion rights to
receive a pro rata portion of the Trust Account. Accordingly, if a 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 the Business Combination in case a larger percentage
of
stockholders exercise their conversion rights than we expected. Therefore,
we
may not be able to consummate a Business Combination that requires us to use
all
of the funds held in the Trust Account as part of the purchase price, or the
Business Combination may be more highly leveraged than desirable. As a result,
we may not be able to effectuate the most attractive Business Combination
available to us.
Our
current officers and directors may resign upon consummation of a Business
Combination and we will have only limited ability to evaluate the management
of
any target business.
Our
ability to effect successfully a Business Combination will be totally dependent
upon the efforts of our key personnel. Upon consummation of a Business
Combination, the role of our key personnel in the target business cannot
currently be ascertained. Although it is possible that some of our key personnel
will remain associated in various capacities with the target business following
a Business Combination, they are not currently obligated to do so. The nature
of
the acquired business may determine whether a member of current management
stays
with the combined company. It is possible that members of our current management
will not serve as executive officers following a Business Combination but may
continue to serve as directors or consultants, which may result in a conflict
of
interest.
We
will
attempt to retain the management of the target business or we will recruit
new
management team members to join the target business. Although we intend to
closely scrutinize the management of a prospective target business in connection
with evaluating the desirability of effecting a Business Combination, we cannot
assure you that our assessment of management will prove to be
correct.
Our
officers and directors may not have significant experience or knowledge of
the
industry of a target business.
We
cannot
assure you that our officers and directors will have experience or significant
knowledge relating to the business of any target company that operates outside
of the healthcare sector. We would likely seek the assistance of third parties
to evaluate such a potential target business. However, we may not adequately
evaluate all the potential risks of acquiring such target business. As a result,
it may not be the most favorable Business Combination that we could
consummate.
If
we seek to effect a Business Combination with an entity that is directly or
indirectly affiliated with one or more of our officers, directors or Initial
Stockholders, conflicts of interest could arise.
We
would
not be prohibited from entering into a business combination with a company
in
which one or more of our Initial Stockholders may have an affiliation. If we
were to seek a business combination with a target business with which one or
more of our Initial Stockholders was affiliated, conflicts of interest could
arise in connection with negotiating the terms of, and completing, the business
combination.
We
will
evaluate each potential Business Combination opportunity as it comes to our
attention, whether or not it is with a business that may be affiliated with
one
of our officers, directors or Initial Stockholders. Given that we have not
identified any target businesses to date, we are unable to specify in what
order
potential business opportunities will be found, and, therefore, we believe
that
it is most prudent to evaluate each potential opportunity as it comes to our
attention, whether or not it is with a business affiliated with one of our
officers, directors or Initial Stockholders. In the event we pursue a business
combination with a target business that is affiliated with one of our directors,
we will establish a special committee consisting of directors who are not
affiliated with such business to oversee the negotiations and to evaluate and
vote upon a Business Combination with such business. In addition, we will not
consummate a Business Combination with an entity that is affiliated with any
of
our officers, directors or Initial Stockholders unless we obtain an opinion
from
an independent investment banking firm that the consideration paid in connection
with such Business Combination is fair to our unaffiliated stockholders from
a
financial point of view. We expect that any such opinion will be included in
our
proxy solicitation material furnished to stockholders in connection with their
vote on such a Business Combination.
Some
of our officers and directors are currently, and may in the future become,
affiliated with entities engaged in business activities similar to those
intended to be conducted by us and, accordingly, may have conflicts of interest
in determining to which entity a particular business opportunity should be
presented.
Some
of
our officers and directors are currently affiliated with private equity firms,
publicly traded companies and other organizations that seek to invest in or
acquire middle market companies. In addition, although none of our officers
or
directors is currently affiliated with other publicly traded blank check
companies, they may in the future become so affiliated. Furthermore, our
officers and directors may become aware of business opportunities which may
be
appropriate for presentation to us as well as the other entities to which they
have fiduciary obligations. Accordingly, they may have conflicts of interest
in
determining to which entity a particular business opportunity should be
presented.
In
general, officers and directors of a corporation incorporated under the laws
of
the State of Delaware are required to present business opportunities to a
corporation if (1) the corporation could financially undertake the
opportunity; (2) the opportunity is within the corporation’s line of
business; and (3) it would not be fair to the corporation and its
stockholders for the opportunity not to be brought to the attention of the
corporation. To the extent one of our officers or directors has a conflict
of
interest with respect to a specific business opportunity, he must make prompt,
full and complete disclosure of the relevant facts to both parties, and must
recuse himself from voting on the matter. In any such case, we will appoint
a
special committee of disinterested directors to evaluate and vote upon the
Business Combination. Each of our officers and directors has agreed, until
the
earlier of a Business Combination, our liquidation, or such time as he ceases
to
be an officer or director, to present to us for our consideration, prior to
presentation to any other entity, any business opportunity which may reasonably
be required to be presented to us under Delaware law, subject to certain
pre-existing fiduciary obligations he may have.
All
of
our officers and directors directly or indirectly own shares of our Common
Stock
that will not participate in a liquidation distribution and therefore they
may
have a conflict of interest in determining whether a particular target business
is appropriate for a Business Combination.
All
of
our officers and directors directly or indirectly own shares of Common Stock
but
they have waived the right to receive distributions in the event of our
liquidation if we have not completed a Business Combination prior to
February 12, 2009
,
except
with respect to shares of Common Stock purchased in the Initial Public Offering
or thereafter. Our Chairman of the Board purchased Units containing 250,000
shares of Common Stock in the Initial Public Offering.
In addition,
certain of our Initial Stockholders purchased an aggregate of 2,923,077 Private
Warrants for an aggregate purchase price of $1,900,000. The Common Stock
acquired prior to our Initial Public Offering and Private Warrants owned by
our
officers and directors will be worthless if we liquidate as a result of our
failure to complete a Business Combination prior to February 12, 2009. The
personal and financial interests of our officers and directors may influence
their motivation in identifying and selecting a target business and completing
a
Business Combination within the required time frame. Consequently, our officers’
and directors’ discretion in identifying and selecting a suitable target
business may 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.
It
is probable that we will only be able to complete one Business Combination,
which will cause us to risk being solely dependent on a single business and
a
limited number of products or services.
The
net
proceeds from our Public Offering and the Private Placement provided us with
approximately $65,409,000 in cash, after payment of underwriting fees and
commissions and other offering expenses, that we may use to complete a Business
Combination (subject to possible reduction resulting from stockholders’ electing
to convert their shares to cash). Our initial Business Combination must be
with
a business with a fair market value (as determined in the reasonable discretion
of our board of directors) of at least 80% of our net assets at the time of
such
acquisition (not including the underwriters’ deferred underwriting discounts and
commissions). Consequently, it is probable that we will have the ability to
complete only a single Business Combination. Accordingly, the prospects for
our
success may be:
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solely
dependent upon the performance of a single business; or
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dependent
upon the development or market acceptance of a single or limited
number of
products, processes or
services.
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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
which
may have the resources to complete several business combinations in different
industries or different areas of a single industry.
Stockholders
have a limited ability to evaluate our officers’ or directors’ ability to manage
a publicly traded company formed with a business purpose similar to
ours.
Our
officers and directors have never served as officers or directors of a
development stage public company with the business purpose of raising funds
to
consummate a Business Combination with an operating business. Accordingly,
you
may not be able to adequately evaluate their ability to successfully consummate
a Business Combination for a publicly traded company organized for such a
purpose.
Because
of our limited resources, certain restrictions in our Certificate of
Incorporation, and the significant competition for Business Combination
opportunities, we may not be able to consummate an attractive Business
Combination.
We
expect
to encounter intense competition from other entities having a business objective
similar to ours, including venture capital funds, private equity firms, leverage
buyout funds, operating businesses and financial buyers competing for
acquisitions. Many of these entities are well established and have extensive
experience in identifying and effecting 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. This inherent
competitive limitation gives others an advantage in pursuing certain target
businesses. Further, the obligation that we have to seek stockholder approval
of
a Business Combination may delay the consummation of a transaction, and our
obligation to convert into cash the shares of common stock held by Public
Stockholders in certain instances may reduce the resources available for a
Business Combination, each of which may place us at a competitive disadvantage
in negotiating a Business Combination.
If
additional financing is required, we may be unable to complete a Business
Combination or to fund the operations and growth of the target business, which
could compel us to restructure the transaction or abandon a particular Business
Combination.
Although
we believe that our available funds will be sufficient to allow us to consummate
a Business Combination, inasmuch as we have not yet identified any specific
target business, we cannot ascertain the capital requirements for any particular
transaction. If our available funds prove to be insufficient, either because
of
the size of the Business Combination or the depletion of our available funds
in
search of a target business, or because we become obligated to convert into
cash
a significant number of shares from dissenting stockholders, we will be required
to seek additional financing. We cannot assure you that such financing would
be
available on favorable terms, if at all. To the extent that additional financing
proves to be unavailable when needed to consummate a particular Business
Combination, we would be compelled to restructure the transaction or abandon
that particular Business Combination and seek an alternative target Business
Combination. In addition, if we consummate a Business Combination, we may
require additional financing to fund the operations or growth of the target
business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business.
None of our officers, directors or stockholders is required to provide any
financing to us in connection with or after a Business Combination.
The
American Stock Exchange may delist our securities from quotation, which could
limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
Our
securities are listed on the American Stock Exchange; however we cannot assure
you that our securities will continue to be listed on the American Stock
Exchange in the future. Additionally, in connection with our 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, we could face significant material adverse
consequences including:
|
|
•
|
reduced
liquidity with respect to 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 resulting in a reduced level of trading activity in the
secondary
trading market for our Common
Stock;
|
|
|
•
|
limited
amount of news and analyst coverage for our company;
and
|
|
|
•
|
a
decreased ability to issue additional securities or obtain additional
financing in the future.
|
Our
Initial Stockholders, including our officers and directors, control a
substantial interest of the Company and this may influence certain actions
requiring a stockholder vote.
As
of
March 26, 2008, our Initial Stockholders (including all of our officers and
directors) collectively owned 20% of our issued and outstanding shares of Common
Stock. In connection with the vote required for our initial Business
Combination, all of our Initial Stockholders, including all of our officers
and
directors, have agreed to vote the shares of Common Stock owned by them in
accordance with the majority of the shares of Common Stock voted by the Public
Stockholders. However, our Initial Stockholders will have substantial influence
over other matters that may be voted upon by our stockholders, such as the
election of directors.
|
ITEM 1B.
|
UNRESOLVED
STAFF COMMENTS
|
Not
applicable.
We
maintain our executive offices at 400 Crown Colony Drive, Suite 104,
Quincy, Massachusetts 02169. NEGF Advisory Company Inc., an affiliate of
John F. Rousseau, our Chief Operating Officer and a director, and Edwin Snape,
a
director, have agreed to provide us with certain limited administrative,
technology and secretarial services under a lease and services agreement, as
well as the use of certain limited office space, including a conference room,
at
this location pursuant to a letter agreement between us and NEGF Advisory
Company Inc. The cost for the foregoing services to be provided to us by
NEGF Advisory Company Inc. is $4,500 per month. These arrangements are
solely for our benefit and are not intended to provide Messrs. Rousseau or
Snape compensation in lieu of salary. We believe, based on rents and fees for
similar services in the Quincy, Massachusetts area, that the fee charged by
NEGF
Advisory Company Inc. is at least as favorable as we could have obtained
from an unaffiliated person. We consider our current office space adequate
for
our current operations.
|
ITEM 3.
|
LEGAL
PROCEEDINGS
|
None.
|
ITEM 4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
Not
applicable.
PART
II
|
ITEM 5.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY
SECURITIES
|
Market
Price Information
The
Common Stock, the Public Warrants and the Units are traded on the American
Stock
Exchange, or the AMEX, under the symbols “GAC,” “GAC.WS” and “GAC.U,”
respectively. Each of our Units consists of one share of our Common Stock and
two Public Warrants. Our Common Stock and Public Warrants commenced to trade
separately from our Units on March 21, 2007. However, transactions in our
Units continue to occur on the AMEX.
The
following table sets forth, for the calendar quarters indicated, the quarterly
high and low closing sale prices for our Common Stock, Public Warrants and
Units
as reported on the AMEX.
|
|
|
Common Stock
(GAC)
|
|
Warrants
(GAC.WS)
|
|
Units
(GAC.U)
|
|
|
Quarter Ended
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
|
March 31,
2007
|
|
$
|
5.41
|
|
$
|
5.39
|
|
$
|
0.39
|
|
$
|
0.36
|
|
$
|
6.13
|
|
$
|
6.03
|
|
|
June
30, 2007
|
|
|
5.80
|
|
|
5.40
|
|
|
0.48
|
|
|
0.35
|
|
|
6.55
|
|
|
6.05
|
|
|
September 30,
2007
|
|
|
5.74
|
|
|
5.50
|
|
|
0.55
|
|
|
0.31
|
|
|
6.62
|
|
|
6.00
|
|
|
December
31, 2007
|
|
|
5.64
|
|
|
5.51
|
|
|
0.39
|
|
|
0.24
|
|
|
6.22
|
|
|
6.00
|
|
|
March 31,
2008 (through March 10, 2008)
|
|
|
5.64
|
|
|
5.55
|
|
|
0.30
|
|
|
0.12
|
|
|
6.10
|
|
|
5.71
|
|
The
closing prices of our Common Stock, Public Warrants and Units as of
March 10, 2008 were $5.64, $0.18 and $5.89, respectively.
Holders
of Common Equity
The
number of holders of record of our Common Stock on March 10, 2008 was 12,
which amount does not include beneficial owners of securities.
Dividends
We
have
not paid any dividends on our Common Stock to date and do not intend to pay
dividends for the foreseeable future. The payment of dividends in the future
will be contingent upon our revenues and earnings, if any, capital requirements
and general financial condition subsequent to completion of a Business
Combination. The payment of any dividends subsequent to a Business Combination
will be within the discretion of our board of directors. It is the present
intention of our board of directors to retain all earnings, if any, for use
in
our business operations and, accordingly, our board does not anticipate
declaring any dividends in the foreseeable future.
Securities
Authorized for Issuance Under Equity Compensation Plans
We
have
not established any compensation plans (including individualized compensation
arrangements) under which any of our equity securities are authorized for
issuance.
Use
of Proceeds From Our Initial Public Offering
On
February 16, 2007, we closed our Initial Public Offering of 10,000,000 Units.
On
March 8, 2007, the underwriters exercised the over-allotment option,
resulting in the sale of an additional 1,500,000 Units.
Simultaneously
with the Initial Public Offering, certain of the Initial Stockholders purchased
2,923,077 Private Placement Warrants at a purchase price of $0.65 per warrant,
in the Private Placement..
We
received aggregate net proceeds from the Private Placement and the Initial
Public Offering, including the proceeds received upon the full exercise of
the
over-allotment option, of approximately $65,409,000. The net proceeds were
deposited into a Trust Account and will be part of the funds distributed to
our
Public Stockholders if we are unable to complete a Business Combination. Unless
and until a Business Combination is consummated, the proceeds held in the Trust
Account will not be available to us. We are entitled to receive up to
$1,600,000, plus amounts for corporate income and franchise taxes, from interest
earned on the Trust Account (plus $50,000 received from the net proceeds of
the
Initial Public Offering) to provide for business, legal and accounting due
diligence on prospective transactions and continuing general and administrative
expenses.
|
ITEM
6.
|
SELECTED
FINANCIAL DATA
|
Results
of Operations
The
following table sets forth selected historical financial information derived
from our audited consolidated financial statements included elsewhere in this
report for the year ended December 31, 2007 and for the periods from
June 2, 2006 (inception) to December 31, 2007 and December 31, 2006
and as of December 31, 2007 and 2006. The following data should be read in
conjunction with “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and our consolidated financial statements including
the notes thereto, included elsewhere in this report.
Statement
of Operations Information:
|
|
|
Year Ended
December 31, 2007
|
|
June 2, 2006
(inception) to
December 31, 2006
|
|
June 2, 2006
(inception) to
December 31, 2007
|
|
|
Interest
income
|
|
$
|
2,956,345
|
|
$
|
—
|
|
$
|
2,956,345
|
|
|
General
and administrative expenses
|
|
|
542,272
|
|
|
5,000
|
|
|
547,272
|
|
|
Net
income (loss) before income taxes
|
|
|
2,414,073
|
|
|
(5,000
|
)
|
|
2,409,073
|
|
|
Income
tax expense
|
|
|
850,454
|
|
|
—
|
|
|
850,454
|
|
|
Net
income (loss)
|
|
$
|
1,563,619
|
|
$
|
(5,000
|
)
|
$
|
1,558,619
|
|
|
Net
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
$
|
0.13
|
|
$
|
(0.00
|
)
|
$
|
0.18
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
|
12,468,493
|
|
|
2,500,000
|
|
|
8,764,706
|
|
Balance
Sheet Information:
|
|
|
December 31 ,
2007
|
|
December 31,
2006
|
|
|
Cash
|
|
$
|
17,042
|
|
$
|
615
|
|
|
Investments
held in trust
|
|
|
69,053,581
|
|
|
—
|
|
|
Total
assets
|
|
|
69,313,220
|
|
|
272,000
|
|
|
Deferred
underwriting fees
|
|
|
2,070,000
|
|
|
—
|
|
|
Total
liabilities
|
|
|
2,320,745
|
|
|
252,000
|
|
|
Common
stock subject to possible conversion
|
|
|
13,067,463
|
|
|
—
|
|
|
Stockholders’
equity
|
|
$
|
53,925,012
|
|
$
|
20,000
|
|
Quarterly
Results of Operations
The
following table sets forth unaudited operating data for each of the quarters
of
the year ended December 31, 2007. This quarterly information has been
prepared on the same basis as our annual consolidated financial statements
and,
in the opinion of management, reflects all significant adjustments (consisting
primarily of normal recurring adjustments) necessary for a fair presentation
of
results of operations for the periods presented.
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
|
Net
income (loss)
|
|
|
$
|
218,343
|
|
|
|
$
|
450,378
|
|
|
|
$
|
483,977
|
|
|
|
$
|
410,921
|
|
|
|
Basic
and diluted income (loss) per share
|
|
|
$
|
.05
|
|
|
|
$
|
.03
|
|
|
|
$
|
.03
|
|
|
|
$
|
.03
|
|
|
|
ITEM
7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
You
should read the following discussion and analysis of our financial condition
and
results of operations together with Item 6, “Selected Financial Data,” and our
consolidated financial statements and notes thereto that appear elsewhere in
this report. This discussion and analysis contains forward-looking statements
that involve risks, uncertainties, and assumptions. Actual results may differ
materially from those anticipated in these forward-looking statements as a
result of various factors, including, but not limited to, those presented under
“Risk Factors” included in Item 1A and elsewhere in this
report.
General
We
were
formed on June 2, 2006, for the purpose of acquiring, through a merger,
capital stock exchange, asset acquisition or other similar business combination,
an operating business. Our efforts in identifying a prospective target business
will not be limited to a particular industry. However, we intend to focus our
search on the healthcare sector. Our initial Business Combination must be with
a
target business whose fair market value is at least equal to 80% of our net
assets (all of our assets, including the funds then held in the Trust Account
less our liabilities) at the time of such Business Combination, as determined
by
our board of directors. We intend to use cash derived from the proceeds of
our
Initial Public Offering and concurrent Private Placement, our capital stock,
debt or a combination of cash, capital stock and debt, to effect such business
combination.
On
February 16, 2007, we closed our Initial Public Offering of 10,000,000 Units.
On
March 8, 2007, the underwriters consummated the full exercise of the
over-allotment option, resulting in the sale of an additional 1,500,000
Units.
Since
our
Initial Public Offering, we have been actively searching for a suitable Business
Combination candidate. We have met with target companies, service professionals
and other intermediaries to discuss our company, the background of our
management and our combination preferences. In the course of these discussions,
we have also spent time explaining the capital structure of the Initial Public
Offering, the Business Combination approval process and the timeline within
which we must either enter into a letter of intent or definitive agreement
for a
Business Combination, or return the proceeds of the Initial Public Offering
held
in the Trust Account to investors. We have focused our search on companies
in
the healthcare sector. Our Certificate of Incorporation provides that we will
continue in existence only until February 12, 2009, 24 months from the
Effective Date. If we have not completed a Business Combination by such date,
our corporate existence will cease and we will dissolve and liquidate for the
purposes of winding up our affairs. We cannot assure investors that we will
find
a suitable Business Combination in the allotted time.
Results
of Operations
We
have
neither engaged in any business operations nor generated any revenues from
operations to date. Our only activities since inception have been organizational
activities and those necessary to prepare for and complete our Initial Public
Offering, and thereafter, certain expenses related to pursuing Business
Combinations with target businesses. We will not generate any operating revenues
until after completion of a Business Combination. We have generated
non-operating income in the form of interest income on our cash and cash
equivalents and short term investments.
Net
income of $410,921 for the three months ended December 31, 2007 consisted
of interest income on the Trust Account investments in government securities
of
$811,050, reduced by $177,732 of general and administrative expenses and an
income tax expense of $222,397.
Net
income of $1,563,619 for the 12 months ended December 31, 2007 consisted of
interest income on the Trust Account investments in government securities of
$2,956,345, reduced by $542,272 of general and administrative expenses and
an
income tax expense of $850,454.
Net
loss
of $5,000 for the period from June 2, 2006 (inception) to December 31,
2006 consisted of $5,000 of general and administrative expenses.
Net
income of $1,558,619 for the period from June 2, 2006 (inception) to
December 31, 2007 (cumulative) consisted of interest income on the Trust
Account investments in government securities of $2,956,345, reduced by $547,272
of general and administrative expenses and an income tax expense of
$850,454.
Liquidity
and Capital Resources
On
February 16, 2007, we closed our Initial Public Offering of 10,000,000 Units.
On
March 8, 2007, the underwriters consummated the full exercise of the
over-allotment option, resulting in the sale of an additional 1,500,000 Units.
Each Unit consisted of one share of Common Stock and two Warrants. Each Public
Warrant entitles the holder thereof to purchase one share of our Common Stock
at
an exercise price of $5.00. Simultaneously with the consummation of the Initial
Public Offering, certain officers, directors, and our Initial Stockholders
purchased an aggregate of 2,923,077 warrants at $0.65 per Private Placement
Warrant from us in the Private Placement. The Private Placement Warrants are
identical to the Public Warrants except that if the Company calls the warrants
for redemption, the Private Placement Warrants will be exerciseable on a
cashless basis so long as they are still held by the initial purchasers. We
received net proceeds from the Private Placement and the Initial Public
Offering, including the proceeds received upon the full exercise of the
over-allotment option, of approximately $65,409,000.
Our
management has discretion with respect to the specific application of the net
proceeds of the Initial Public Offering, although substantially all of the
net
proceeds of the Initial Public Offering are intended to be generally applied
toward consummating the Business Combination, which may not necessarily
constitute a majority of the outstanding equity of such business and may not
necessarily constitute a business combination for accounting purposes.
Furthermore, there is no assurance that we will be able to successfully effect
a
Business Combination. Upon the closing of the Initial Public Offering,
$67,440,000 was deposited in the Trust Account and commencing February 16,
2007, was to be invested in government securities until the earlier of
(i) the consummation of our first Business Combination or (ii) our
liquidation.
We
are
entitled to receive up to $1,600,000, plus amounts for corporate income and
franchise taxes, from interest earned on the Trust Account (plus $50,000
received from the net proceeds of the Initial Public Offering) to finance our
operations prior to consummating a Business Combination. We currently anticipate
incurring expenses for the following purposes until we consummate a Business
Combination:
|
|
•
|
costs
incurred to identify one or more potential target
businesses;
|
|
|
•
|
due
diligence and investigation of prospective target
businesses;
|
|
|
•
|
legal
and accounting fees relating to our SEC reporting obligations and
general
corporate matters;
|
|
|
•
|
structuring
and negotiating a Business Combination, including the making of a
down
payment or the payment of exclusivity or similar fees and
expenses;
|
|
|
•
|
payment
of $108,000 in administrative fees due to an affiliate of two of
our
Initial Stockholders; and
|
|
|
•
|
miscellaneous
expenses.
|
Beginning
on February 12, 2007 and ending upon the acquisition of a target business,
we began incurring a fee of $4,500 per month for office space and certain
administrative, technology and secretarial services from NEGF Advisory
Company Inc., an affiliate of two of our Initial Stockholders. In addition,
in 2006, certain Initial Stockholders advanced us an aggregate of $127,000
for
payment of offering expenses on our behalf. A total of $124,699 of these
advances was repaid from the proceeds of the Initial Public Offering that were
allocated to pay offering expenses.
We
may
use all or substantially all of the proceeds held in the Trust Account other
than the deferred portion of the underwriters’ discount and amounts used for
working capital and for taxes to consummate a Business Combination
with one or more target businesses. We may not use all of the proceeds held
in the Trust Account in connection with a business combination, either because
the consideration for the Business Combination is less than the proceeds in
the
Trust Account or because we will finance a portion of the consideration with
capital stock or debt securities that we can issue. In that event, the proceeds
held in the Trust Account as well as any other net proceeds not expended will
be
used to finance the operations of the target business or businesses. The
operating businesses that we consummate a Business Combination
with must have, individually or collectively, a fair market value equal to
at least 80% of our net assets (all of our assets, including the funds then
held
in the Trust Account less our liabilities) at the time of such Business
Combination, as determined by our board of directors. If we consummate multiple
Business Combinations that collectively have a fair market value of 80% of
our
net assets, then we would require that such transactions are consummated
simultaneously.
We
may
issue additional capital stock or debt securities to finance a Business
Combination. The issuance of additional capital stock, including the conversion
of any convertible debt securities we may issue, or the incurrence of debt,
could have material consequences on our business and financial condition. We
anticipate that we would only consummate such a financing simultaneously with
the consummation of a Business Combination.
If
we are
unable to find a suitable target business by February 12, 2009, we will be
forced to liquidate. If we are forced to liquidate, the per share liquidation
amount may be less than the initial per Unit price in the Initial Public
Offering because of the underwriting commissions and expenses related to our
Initial Public Offering and because of the value of the Public Warrants.
Additionally, if third parties make claims against us, the offering proceeds
held in the Trust Account could be subject to those claims, resulting in a
further reduction to the per share liquidation price. Under Delaware law, our
stockholders who have received distributions from us may be held liable for
claims by third parties to the extent such claims are paid by us. Furthermore,
our Warrants will expire worthless if we liquidate before the completion of
the
Business Combination.
It
is
possible that we could use a portion of the funds not in the Trust Account
to
make a deposit, down payment or fund a “no-shop” provision with respect to a
particular proposed Business Combination. In the event we were ultimately
required to forfeit such funds (whether as a result of our breach of agreement
relating to such payment or otherwise), we may not have a sufficient amount
of
working capital available outside of the Trust Account to pay expenses related
to finding a suitable Business Combination without securing additional
financing. If we were unable to secure additional financing, we would most
likely fail to consummate a Business Combination in the allotted time and would
be forced to liquidate.
Off-Balance
Sheet Arrangements
Warrants
issued in conjunction with our Initial Public Offering are equity linked
derivatives and accordingly represent off-balance sheet arrangements. The
Warrants meet the scope exception in paragraph 11(a) of FAS 133 and
are accordingly not accounted for as derivatives for purposes of FAS 133,
but instead are accounted for as equity. See the notes to our financial
statements for a discussion of the options and warrants.
The
securities held in the Trust Account are in the name of our wholly-owned
subsidiary, Geneva Acquisition Security Corporation, which was formed on
February 16, 2007 specifically for such purpose.
Contractual
Obligations
In
connection with our initial Initial Public Offering, we agreed to pay the
underwriters a deferred underwriting discount of $2,070,000 upon the
consummation of our initial Business Combination. We expect that such allowance
will be paid out of the proceeds in the Trust Account. Other than contractual
obligations incurred in the ordinary course of business, we do not have any
other long-term contractual obligations.
|
ITEM
7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
Market
risk is a broad term for the risk of economic loss due to adverse changes in
the
fair value of a financial instrument. These changes may be the result of various
factors, including interest rates, foreign exchange rates, commodity prices
and/or equity prices. Our exposure to market risk is limited to interest income
sensitivity with respect to the funds placed in the Trust Account. However,
the
funds held in our Trust Account have been invested only in U.S. “government
securities,” defined as any Treasury Bill issued by the United States having a
maturity of one hundred and eighty days or less, or in money market funds,
meeting certain conditions under Rule 2a-7 under the Investment Company Act
of 1940, so we are not deemed to be an investment company under the Investment
Company Act. As a result, we are subject to market risk primarily through
changes in interest rates on government securities and money market funds.
The
effect of other changes, such as foreign exchange rates, commodity prices and/or
equity prices, do not currently pose significant market risk to us.
|
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY
DATA
|
Financial
statements are attached hereto beginning on page F-1.
|
ITEM
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
None.
|
ITEM
9A(T).
|
CONTROLS
AND PROCEDURES
|
Evaluation
of Disclosure Controls and Procedures
Evaluation
of Disclosure Controls and Procedures.
Based
on their evaluation as of the end of the period covered by this Annual Report
on
Form 10-K, our principal executive officer and principal financial officer
have concluded that our “disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) provide them with
reasonable assurance that they were effective to provide timely material
information required to be disclosed as of the end of the period covered by
this
report.
Changes
in Internal Control over Financial Reporting.
Our
management has evaluated whether any change in our internal control over
financial reporting occurred during the last fiscal year. Based on that
evaluation, management concluded there has been no changes in our “internal
controls over financial reporting” (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the period covered by this Annual
Report on Form 10-K that have materially affected, or are reasonably likely
to materially affect, our internal controls over financial
reporting.
|
ITEM
9B.
|
OTHER
INFORMATION
|
Not
applicable.
PART
III
|
ITEM
10.
|
DIRECTORS,
EXECUTIVE AND CORPORATE
GOVERNANCE
|
Our
directors and executive officers are as follows:
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
James
E. McGrath
|
|
53
|
|
President
and Director
|
|
John
F. Rousseau, Jr.
|
|
65
|
|
Chief
Operating Officer and Director
|
|
Gregory
F. Zaic
|
|
60
|
|
Treasurer
|
|
Thomas
E. Hancock
|
|
44
|
|
Vice
President of Business Development and Secretary
|
|
Vincent
T. Pica II
|
|
54
|
|
Chairman
of the Board of Directors
|
|
Sidney
Braginsky
|
|
70
|
|
Director
|
|
Hardwick
Simmons
|
|
67
|
|
Director
|
|
Edwin
Snape
|
|
68
|
|
Director
|
James
E. McGrath
has
been
our President and a Director since our inception. Mr. McGrath has more than
25
years of experience in general management, acquisitions and financial
investments. Since April 1989, he has been Chairman and Chief Executive Officer
of Fairfax Capital Partners, Inc., a private investment firm. From 1997 to
2001,
Mr. McGrath was Chairman of the Board of Xycom Automation, Inc., a privately
held manufacturer of controllers and software used in factory floor automation.
From 1992 to 1997, he was director of American Medical Response, Inc., a
publicly traded company on the New York Stock Exchange which he co-founded
and
which acquired over 50 ambulance services in 27 states and which was sold to
Laidlaw Industries in 1997 for approximately $1.4 billion. From 1993 to 1996,
he
was Chairman of the Board of Directors of Perceptron, Inc., a publicly traded
manufacturer of laser-based sensors and image-processing systems where he had
served on the Board of Directors since 1982. From 1987 to 1989, Mr. McGrath
was
a Managing Director of William E. Simon and Sons, Inc., a private merchant
banking company. From 1981 to 1987, he was employed by EF Hutton & Company,
Inc. where he served at various times as President of its venture capital
subsidiary, head of the firm’s merchant banking operation and as a corporate
Senior Vice President. Mr. McGrath received a BA (
cum
laude
)
from
Harvard College and an MBA from the Harvard Business School.
John
F. Rousseau, Jr.
has
been
our Chief Operating Officer and a director since our inception. Mr. Rousseau
has
over 30 years of experience in private equity investing, company management
and
legal practice. Since 1992, he has been a principal and managing general partner
of New England Partners, a diversified private equity firm which he co-founded.
Mr. Rousseau has been responsible with other partners in the firm for raising
pools of capital and for identifying and structuring investments in, and
acquisitions and divestitures of, a variety of operating companies. During
this
period, Mr. Rousseau has also served as an officer and owner of NEGF Advisory
Company, Inc., a management company affiliated with New England Partners. In
1997, he initiated and has co-managed the New England Partners healthcare
investment program, and in January 2004 he co-founded and has been a general
partner with Nexus Medical Partners, an affiliated medical technology private
equity fund. At New England Partners, Mr. Rousseau has led investments in
sixteen healthcare companies focused in the fields of medical devices,
biotechnology, diagnostics, medical instruments and healthcare services. From
October 2002 to November 2007, he served on the board of New England Partners
portfolio company Minrad International, Inc., a publicly traded company on
the
American Stock Exchange developing and manufacturing products utilized in
interventional pain management and laser-driven image guidance. Previously,
from
1987 to 1991 Mr. Rousseau was Senior Vice President, Manager-East Coast of
Homart Development Company, Inc. (the commercial real estate development
subsidiary of Sears Roebuck & Co). From 1984 to 1987, he was Senior Vice
President-New England Regional Manager of Spaulding & Slye Company, Inc., a
commercial real estate development firm. For the previous fifteen years, he
practiced law and was a Senior Partner at the Boston-based law firm of Hale
and
Dorr. Mr. Rousseau received a BA from Amherst College and a JD from Columbia
Law
School.
Gregory
F. Zaic
has
been
our Treasurer since our inception. Mr. Zaic has over 35 years of investment,
operating management and business development experience in the medical
technology and advanced packaging materials sectors. Since July 2004, he has
been a principal and general partner of Nexus Medical Partners, a private equity
firm specializing in medical technology investments. Prior to joining Nexus,
from 1987 to September 2003, Mr. Zaic was a general partner of Prince Ventures,
an independent, medically focused, venture capital partnership. Since 1997,
he
has served on the board of directors of Xylos Corporation, a manufacturer of
biosynthetic materials and one of Prince Ventures’ portfolio companies. From
1984 to 1987, Mr. Zaic was Vice President and Special Limited Partner of the
Vista Group, a group of diversified private equity funds. From 1983 to 1984,
Mr.
Zaic was Director, New Products and Ventures for Cambridge Research and
Development Group, a boutique incubator of new technologies/products. From
1979
to 1983, he was an internal new business consultant for American Can Company
(Greenwich, CT) specializing in the evaluation of new businesses and
technologies connected with advanced specialty metal and plastic packaging
materials. From 1972 to 1979, Mr. Zaic was employed at Baxter Laboratories,
a
leading medical device company, where he performed a number of financial and
operational functions including running the Special Products division. His
responsibilities included functions within manufacturing, product design,
manufacturing engineering, marketing, materials management, and financial
control. Mr. Zaic received a BS (
magna
cum
laude
)
from
Princeton University and was elected to Phi Beta Kappa, Tau Beta Pi and Sigma
Xi
academic and scientific honorary societies. He also received an MS in mechanical
engineering and an MS in management, both from the Massachusetts Institute
of
Technology.
Thomas
E. Hancock
has
been
our Secretary and Vice President of Business Development since our inception.
Mr. Hancock has over 17 years of experience in private equity investing, public
security analysis and research/general management experience. Since November
2002, he has been a principal of New England Partners. While at New England
Partners, Mr. Hancock has been responsible primarily for investments in the
healthcare sector, and in January 2004 he became a partner in Nexus Medical
Partners, an affiliate fund specializing in medical technology investments.
Since 2004, Mr. Hancock has been a director of two privately-held companies,
Stheno, Inc. and A&G Pharmaceuticals, Inc. From 2000 to 2002, Mr. Hancock
was a Managing Director and Senior Equity Analyst at U. S. Bancorp Piper Jaffray
covering publicly-traded biopharmaceutical companies and drug discovery supplier
companies. From 1999 to 2000, Mr. Hancock was Senior Analyst at Leerink Swann
& Company, where he covered public biopharmaceutical companies. From 1996 to
1999, he was a Senior Research Associate at Nationsbanc Montgomery Securities
and during 1995 he worked in the business development group at Genentech. From
1989 to 1994, he was a research scientist at Cor Therapeutics. Mr. Hancock
received a BS and an MBA, both from the University of California, Berkeley.
Mr.
Hancock is the son-in-law of Dr. Snape.
Vincent
T. Pica II
has
been
a director since June 2006 and our Chairman of the Board since August 2006.
Mr.
Pica has more than 30 years of experience in mergers and acquisitions,
investment banking, operations, and general management. He is
currently
Managing
Partner and President of ARC Global Partners, which acquired Neuwing in a
private transaction in September 2007. Prior to that, Mr Pica
was
the
Chief
Executive Officer of Neuwing, Inc. a private investment company he founded
in
May 2006. From January 2003 to April 2006, he was Chief Executive Officer of
Longwing Inc., which was a real estate investment company financed by the Dubai
Investment Group in the United Arab Emirates. From 1994 to 2000, he was Group
President of Capital Finance at Prudential Securities, Inc., where he was
responsible for venture capital, investment banking, mergers, and acquisitions,
equity research, institutional trading, and syndicate operations. From April
2000 to April 2001, Mr. Pica served on the board of directors of Snickelways
Interactive, Inc., a privately held internet-based marketing company. From
1990
to 1994, while employed by Prudential Securities, Inc., he was Executive Vice
President of the Mortgage-and Asset-backed Capital Group. At various times
when
employed by Prudential Securities from 1986 to 2000, he also served as a member
of the Operating Committee and as a member of the Board of Directors of
Prudential Securities Group, Inc. From 1975 to 1986, Mr. Pica was employed
by EF
Hutton & Company, Inc., where he served at various times as Senior Vice
President of MIS Operation, and as Director and Investment Committee member
for
its venture capital subsidiary. He received a BBA from Iona College and a MS
in
business Policy from Columbia University Graduate School of
Business.
Sidney
Braginsky
has
served as a director since June 2006. From February 2003 to January 2006 he
served as President and Chief Executive Officer of Ineedmd, Inc., a privately
held company specializing in cardiology products. Since March 2000 he has served
as Chairman of Atropos Technologies, LLC a spectroscopy company. Since September
2001, Mr. Braginsky has served as Chairman and CEO of Digilab, LLC, a
spectroscopy and analytical device company. From March 2001 to September 2003,
he served as President of Mediscience Technology Corp., a privately held
designer and developer of diagnostic medical devices. Since January 2001, he
has
served as Chairman of DoubleD Venture Fund, LLC, a venture capital fund. From
1994 to January 2000, Mr. Braginsky served as President and Chief Operating
Officer of Olympus America Inc., a leading producer of microscopes, automated
blood and fluid chemistry analyzers, measuring research and industrial products
and consumer products, which he joined in 1970. Since 1991, Mr. Braginsky has
served as Chairman of the Board of City University of New York, Robert Chambers
Laboratory. He also continues to serve as a Director of the following publicly
traded companies: Noven Pharmaceutical Corp., Electro-Optical Systems Inc.,
and
Diomed, Inc., and previously served on the Boards of Q-RNA and Versamed. In
addition, he serves as Chairman of the International Standards Organization
Technical Committee 172, which is responsible for the world standards of optical
and electro-optical devices. Mr. Braginsky is a member of the Boards of Long
Island High Tech Center; Stony Brook University, School of Engineering; Long
Island Museum of Science and Technology; and the Center for Technology
Education, Hofstra University. Since 1999 he has served as Chairman of the
Board, College of Business and Management, C.W. Post, Long Island University.
Mr. Braginsky attended Queens College, City University of New York.
Hardwick
Simmons
became
a
director in August 2006. From February 2001 until his retirement in May 2003,
Mr. Simmons served as Chief Executive Officer of the Nasdaq Stock Market, Inc.,
where he also served as its Chairman from September 2001. From 1991 to January
2001, Mr. Simmons served as President and Chief Executive Officer of Prudential
Securities Incorporated. Prior to joining Prudential, Mr. Simmons was President
of the Private Client Group at Shearson Lehman Brothers, Inc. Mr. Simmons serves
as a director of Lions Gate Entertainment Corp (NASDAQ), an entertainment
Company, and is lead director for Raymond James Financial (NYSE), a financial
services company. Mr. Simmons is a member and former chairman of the Securities
Industry Association, a former director of the Chicago Board Options Exchange,
and a former president and current member of The Bond Club of New York, Inc.
He
is a Trustee of Woods Hole Oceanographic Institute and Chairman of the
International Tennis Hall Of Fame. Mr. Simmons graduated from Harvard University
and received his M.B.A. from Harvard Business School. He served in the U.S.
Marine Corps Reserve from 1960 until 1966.
Edwin
Snape
has
been
a director since our inception. Dr. Snape has over 40 years of investment,
operating management and technical development experience in the medical
technology and advanced materials sectors. Since 1995, he has been a principal
and general partner of New England Partners where he has primary responsibility
for the firm’s medical technology investment program. In January 2004, he
co-founded and has been a general partner of Nexus Medical Partners, an
affiliated fund specializing in medical technology investments. Since November
2002, he has served on the board of Memry Corporation, a publicly traded
specialty materials company on the American Stock Exchange primarily serving
the
medical industry, and currently serves as Chairman. Since August 1999, he has
served on the board of Deltex Medical Group plc, a UK-based company listed
on
the London Stock Exchange involved in cardiac monitoring and since June 2003
has
served as Vice Chairman. From January 2004 to February 2008, Dr. Snape served
as
a director of Diomed Inc., a leading supplier of endovenous laser treatment
of
varicose veins listed on the American Stock Exchange. Prior to New England
Partners, in 1982, Dr. Snape co-founded and through 1994, served as Managing
General Partner of the Vista Group, a group of diversified private equity funds.
He was primarily responsible for the Vista Group’s specialty materials and
medical technology investments. Prior to the Vista Group, from 1980 to 1981,
he
was a principal at Whitehead Associates and from 1978 to 1980, he was a
principal at Inco (International Nickel) Securities Corporation where in both
firms he was responsible for developing their venture capital investment
programs covering a wide range of industries including manufacturing, factory
automation, advanced materials and medical technology. In 1980 he founded and
served as the first Chairman of the Liposome Company which was sold in 2000
for
$722 million. Prior to his private equity experience, Dr. Snape founded and
managed several companies in the specialty materials and medical technology
fields. Dr. Snape received BS and PhD degrees in metallurgy from Leeds
University, England and is a recipient of the AB Campbell Award and Hunt Silver
Medal. Dr. Snape is the father-in-law of Mr. Hancock.
Our
board
of directors is currently divided into three classes with only one class of
directors being elected in each year and each class serving a three-year term.
The term of office of the first class of directors, consisting of
Mr. Rousseau and Mr. Simmons, will expire at our first annual meeting
of stockholders. The term of office of the second class of directors, consisting
of Mr. Pica and Mr. Braginsky, will expire at the second annual
meeting. The term of the third class of directors, consisting of Dr. Snape
and Mr. McGrath, will expire at the third annual meeting. Upon consummation
of a Business Combination, this classified board feature will terminate and
we
will then have only one class of directors, with each director elected
annually.
Special
Advisor
Thompson
Dent
became
an advisor in August 2006. Since April 2007 Mr. Dent has served as Executive
Chairman
of
MedTel
UK Ltd., an owner and operator of ten advanced diagnostic imaging centers and
ambulatory surgery centers in the United Kingdom; prior to selling the US
operation he was CEO of MedTel International which consisted of twenty US sites
plus the ten UK sites. From 1987 to July 2001, he co-founded and became Chief
Executive Officer and Chairman of PhyCor, Incorporated, a publicly traded
Physician Practice Management company. Mr. Dent currently serves as a Director
of Healthstream, Inc., a publicly traded company that provides internet content
for training and education of healthcare professionals. Mr. Dent received his
B.S. Degree in Business from Mississippi State University and a Masters Degree
in Healthcare Administration from The George Washington University.
Director
Independence
Our
board
of directors has determined that Sidney Braginsky, Vincent T. Pica II,
Hardwick Simmons and Edwin Snape are “independent directors,” as defined in the
AMEX listing standards and Rule 10A-3 of the Exchange Act.
Board
Committees
Our
board
of directors has an audit committee and has adopted a written charter for this
committee as well as a code of ethics that governs the conduct of our officers
and employees.
Audit
Committee
Our
audit
committee consists of Messrs. Snape, Pica and Braginsky. The independent
directors appointed to our audit committee are independent members of our board
of directors, as defined by the rules of the AMEX and the Exchange Act. Each
member of our audit committee is financially literate under the current listing
standards of the AMEX, and our board of directors has determined that
Mr. Pica and Mr. Braginsky each qualify as an audit committee
financial expert, as such term is defined by SEC rules.
The
audit
committee reviews the professional services and independence of our independent
registered public accounting firm and our accounts, procedures and internal
controls. The audit committee will also recommend the firm selected to be our
independent registered public accounting firm, review and approve the scope
of
the annual audit, review and evaluate with the independent public accounting
firm our annual audit and annual consolidated financial statements, review
with
management the status of internal accounting controls, evaluate problem areas
having a potential financial impact on us that may be brought to the committee’s
attention by management, the independent registered public accounting firm
or
the board of directors, and evaluate all of our public financial reporting
documents.
Nominating
Committee
We
have
established a nominating committee of the board of directors,
which consists of Dr. Snape, as chairman, Mr. Braginsky and
Mr. Pica, each of whom is an independent director under the AMEX listing
standards. The nominating committee is responsible for overseeing the selection
of persons to be nominated to serve on our board of directors. The nominating
committee considers persons identified by its members, management, stockholders,
investment bankers and others.
The
guidelines for selecting nominees, which are specified in the written charter
of
the nominating committee generally provide that persons to be nominated should
be actively engaged in business endeavors, have an understanding of financial
statements, corporate budgeting and capital structure, be familiar with the
requirements of a publicly traded company, be familiar with industries relevant
to our business endeavors, be willing to devote sufficient time to the oversight
duties of the board of directors of a public company, and be able to promote
a
diversity of views based on the person’s education, experience and professional
employment. The nominating committee evaluates each individual in the context
of
the board as a whole, with the objective of recommending a group of persons
that
can best implement our business plan, perpetuate our business and represent
shareholder interests. The nominating committee may require certain skills
or
attributes, such as financial or accounting experience, to meet specific board
needs that arise from time to time. The nominating committee does not
distinguish among nominees recommended by shareholders and other
persons.
Code
of Ethics
We
have
adopted a code of ethics applicable to our directors, officers and employees
in
accordance with applicable federal securities laws and the rules of the AMEX.
We
have filed copies of our code of ethics as an exhibit to our registration
statement filed in connection with our Initial Public Offering. You may review
our code of ethics by accessing our public filings at the SEC’s website at
www.sec.gov. In addition, a copy of our code of ethics has been posted on our
website at www.geneva-spac.com and will be provided without charge upon request
to us in writing at 400 Crown Colony Drive, Suite 104, Quincy, Massachusetts
02169.
Section 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a) of
the Securities Exchange Act requires our directors, executive officers and
persons who own more than 10% of our common stock to file reports of ownership
and changes in ownership of our common stock with the SEC. Directors, executive
officers and persons who own more than 10% of our Common Stock are required
by
SEC regulations to furnish us copies of all Section 16(a) forms they
file.
Based
solely upon a review of such forms furnished to us and written representations
from certain reporting persons, we believe that all filing requirements
applicable to our directors, executive officers and greater than 10% beneficial
owners were complied with during 2007.
|
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
No
executive officer or director has received any cash compensation for services
rendered. Commencing on February 12, 2007, we have paid NEGF Advisory
Company Inc., an affiliate of certain of our Initial Stockholders, a fee of
$4,500 per month for providing us with certain limited administrative,
technology and secretarial services, as well as the use of certain limited
office space, including a conference room. However, this arrangement is solely
for our benefit and is not intended to provide our Initial Stockholders
compensation in lieu of salary.
Other
than this $4,500 per month fee, no compensation of any kind, including finder’s
and consulting fees, will be paid to any of our Initial Stockholders, our
officers or directors, or any of their respective affiliates, for services
rendered prior to or in connection with a Business Combination. However, our
Initial Stockholders will be reimbursed for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target
businesses and performing due diligence on prospective Business Combinations.
There is no limit on the amount of these out-of-pocket expenses and there will
be no review of the reasonableness of the expenses by anyone other than our
board of directors, which includes persons who may seek reimbursement, or a
court of competent jurisdiction if such reimbursement is challenged. If none
of
our directors are deemed “independent,” we will not have the benefit of
independent directors examining the propriety of expenses incurred on our behalf
and subject to reimbursement.
Although
we cannot currently predict the role of our management following a Business
Combination, we expect that our current management will not participate as
executive officers of a target business. Following an acquisition, an officer
or
director who serves the resulting entity as a director or in an advisory
capacity, may receive compensation for his post-acquisition
services.
Since
our
formation, we have not granted any stock options or stock appreciation rights
or
any awards under long-term incentive plans.
Other
than the securities described above and in the section appearing elsewhere
in
this annual report entitled “Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters,” neither our officer nor our
directors has received any of our equity securities.
|
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
The
following table sets forth information regarding the beneficial ownership of
our
Common Stock as of March 10, 2008 by:
|
|
·
|
each
person known by us to be the beneficial owner of more than 5% of
our
outstanding shares of common stock;
|
|
|
·
|
each
of our officers and directors; and
|
|
|
·
|
all
our officers and directors as a
group.
|
Unless
otherwise indicated, we believe that all persons named in the table have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them.
|
Name and Address of Beneficial Owner(1)
|
|
Shares
Beneficially
Owned(2)
|
|
% of
Outstanding
Common Stock
|
|
|
HBK
Investments L.P. (3)
|
|
|
1,136,450
|
|
|
8.1
|
%
|
|
HBK
Services LLC (3)
|
|
|
1,136,450
|
|
|
8.1
|
%
|
|
HBK
Partners II L.P. (3)
|
|
|
1,136,450
|
|
|
8.1
|
%
|
|
HBK
Management LLC (3)
|
|
|
1,136,450
|
|
|
8.1
|
%
|
|
HBK
Master Fund L.P. (3)
|
|
|
1,136,450
|
|
|
8.1
|
%
|
|
Fir
Tree, Inc. (4)
|
|
|
1,235,000
|
|
|
8.8
|
%
|
|
Sapling,
LLC (4)
|
|
|
982,070
|
|
|
7.0
|
%
|
|
Fir
Tree Capital Opportunity Master Fund, L.P. (4)
|
|
|
252,930
|
|
|
1.8
|
%
|
|
David
M. Knott (5)(6)
|
|
|
925,000
|
|
|
7.0
|
%
|
|
Dorset
Management Corporation (5)(7)
|
|
|
925,000
|
|
|
7.0
|
%
|
|
President
and Fellows of Harvard College (8)
|
|
|
830,100
|
|
|
5.9
|
%
|
|
Name and Address of Beneficial Owner(1)
|
|
Shares
Beneficially
Owned(2)
|
|
% of
Outstanding
Common Stock
|
|
|
QVT
Financial LP (9)
|
|
|
711,400
|
|
|
5.1
|
%
|
|
QVT
Financial GP LLC (9)
|
|
|
711,400
|
|
|
5.1
|
%
|
|
Adage
Capital Partners, L.P. (10)
|
|
|
961,000
|
|
|
6.9
|
%
|
|
Adage
Capital Partners GP, L.L.C. (10)
|
|
|
961,000
|
|
|
6.9
|
%
|
|
Adage
Capital Advisors, L.L.C. (10)
|
|
|
961,000
|
|
|
6.9
|
%
|
|
Robert
Atchinson (10)
|
|
|
961,000
|
|
|
6.9
|
%
|
|
Phillip
Gross (10)
|
|
|
961,000
|
|
|
6.9
|
%
|
|
James
E. McGrath (11)
|
|
|
622,000
|
|
|
4.4
|
%
|
|
John
F. Rousseau, Jr. (12)
|
|
|
485,000
|
|
|
3.5
|
%
|
|
Gregory
F. Zaic (13)
|
|
|
289,000
|
|
|
2.1
|
%
|
|
Thomas
E. Hancock (14)
|
|
|
288,000
|
|
|
2.1
|
%
|
|
Sidney
Braginsky
|
|
|
60,000
|
|
|
*
|
|
|
Vincent
T. Pica II (15)
|
|
|
703,000
|
|
|
5.0
|
%
|
|
Hardwick
Simmons
|
|
|
60,000
|
|
|
*
|
|
|
Edwin
Snape (16)
|
|
|
288,000
|
|
|
2.1
|
%
|
|
All
directors and officers as a group (8 individuals)
|
|
|
2,795,000
|
|
|
20
|
%
|
*Less
than 1%
|
(1)
|
Except
as set forth below, the business address of each person is 400 Crown
Colony Drive, Suite 104, Quincy, Massachusetts 02169. The address of
HBK Investments L.P.,
HBK
Services LLC, HBK Partners II L.P., HBK Management LLC and HBK Master
Fund
L.P.
is
300
Crescent Court, Suite 700, Dallas, Texas 75201
.
The address of Fir Tree, Inc. and Sapling, LLC is
505
Fifth Avenue, 23rd
Floor,
New York, New York 10017
.
The address of
Fir
Tree Capital Opportunity Master Fund, L.P. is c/o Admiral Administration
Ltd., Admiral Financial Center, 5th Floor, 90 Fort Street, Box 32021
SMB,
Grand Cayman, Cayman Islands.
The
address of David M. Knott and Dorset Management Corporation is
485
Underhill Boulevard, Suite 205, Syosset, New York 11791
.
The
address of President and Fellows of Harvard College is
c/o
Harvard Management Company, Inc., 600 Atlantic Avenue, Boston, MA
02210
.
The address of QVT Financial LP and
QVT
Financial GP LLC
is
1177
Avenue of the Americas, 9th Floor, New York, New York 10036
.
The address of
Adage
Capital Partners, L.P., Adage Capital Partners GP, L.L.C., Adage
Capital
Advisors, L.L.C., Robert Atchinson and Phillip Gross is 200 Clarendon
Street, 52nd Floor, Boston, Massachusetts
02116.
|
|
(2)
|
Does
not reflect the ownership of Private Placement Warrants purchased
by
certain of the Initial Stockholders on February 16, 2007 as described
below, which are not exercisable until the later of February 12,
2008 and
the date of our consummation of a Business
Combination.
|
|
(3)
|
Based
solely upon Amendment No. 1 to Schedule 13G filed by HBK
Investments L.P.,
HBK
Services LLC, HBK Partners II L.P., HBK Management LLC and HBK Master
Fund
L.P.
with
the SEC on February 5, 2008.
Each
party possesses shared voting power and shared dispositive power
with
respect to 1,136,450 shares of Common
Stock.
|
|
(4)
|
Based
solely upon Amendment No. 1 to a Schedule 13G filed by
Sapling,
LLC, Fir Tree Capital Opportunity Master Fund, L.P. and Fir Tree,
Inc.
with the SEC on February 14, 2008.
Each
party possesses shared voting power and shared dispositive power
with
respect to 982,070 shares of Common
Stock.
|
|
(5)
|
Based
solely upon Amendment No. 1 to a Schedule 13G filed by David M.
Knott and Dorset Management Corporation with the SEC on February 13,
2008.
|
|
(6)
|
Includes
925,000 shares held individually by Mr. Knott. Mr. Knott
possesses sole voting power with respect to 693,400 shares, shared
voting
power with respect to 222,700 shares, sole dispositive power with
respect
to 740,000 shares and shared dispositive power with respect to 185,000
shares.
|
|
(7)
|
Includes
925,000 shares held individually by Dorset Management Corporation.
Dorset
Management Corporation possesses sole voting power with respect to
693,400
shares, shared voting power with respect to 222,700 shares, sole
dispositive power with respect to 740,000 shares and shared dispositive
power with respect to 185,000
shares.
|
|
(8)
|
Based
solely upon a Schedule 13G filed by President and Fellows of Harvard
College with the SEC on February 14, 2008. President and Fellows of
Harvard College possesses sole voting power and sole dispositive
power
with respect to 830,100 shares.
|
|
(9)
|
Based
solely upon Amendment No. 1 to a Schedule 13G filed by QVT
Financial LP and
QVT
Financial GP LLC
with
the SEC on January 31, 2008. Each party possesses shared voting power
and shared dispositive power with respect to 711,400
shares.
|
|
(10)
|
Based
solely upon a Schedule 13G filed by
Adage
Capital Partners, L.P., Adage Capital Partners GP, L.L.C., Adage
Capital
Advisors, L.L.C., Robert Atchinson and Phillip Gross on March 17,
2008.
Each party possesses shared voting power and shared dispositive power
with
respect to 961,000 shares of Common Stock and holds Warrants to purchase
1,922,000 shares of Common Stock.
|
|
(11)
|
Includes
607,000 shares held individually by Mr. McGrath and 15,000 shares
held by Danbury Management Company, LLC, with respect to which
Mr. McGrath possesses shared voting and dispositive
authority.
|
|
(12)
|
Includes
470,000 shares held individually by Mr. Rousseau and 15,000 shares
held by Danbury Management Company, LLC, with respect to which
Mr. Rousseau possesses shared voting and dispositive
authority.
|
|
(13)
|
Includes
274,000 shares held individually by Mr. Zaic and 15,000 shares held
by Danbury Management Company, LLC, with respect to which Mr. Zaic
possesses shared voting and dispositive
authority.
|
|
(14)
|
Includes
273,000 shares held individually by Mr. Hancock and 15,000 shares
held by Danbury Management Company, LLC, with respect to which
Mr. Hancock possesses shared voting and dispositive
authority.
|
|
(15)
|
Includes
663,000 shares held individually by Mr. Pica and 40,000 shares held
by Maruna Partners, LLC, with respect to which Mr. Pica possesses
voting and dispositive authority. Mr. Pica is the sole manager of
Maruna Partners LLC and has sole dispositive and voting power of
the
shares of the Company held by Maruna Partners, LLC. Mr. Pica has no
ownership interest in Maruna Partners, LLC. The ownership interests
in
Maruna Partners, LLC are held by David J. Weisberger, Leland B.
Paton, Dear Family Partnership LP, Theodore J. Leonsis,
Robert W. Pittman, Norman Epstein, Chasecore, LP, Greene Family
Trust, Sayanta Basu, Midway Capital Partners LLC, Mohammed Aboulla
Al
Gergawi and Soud BA’Alawy.
|
|
(16)
|
Includes
273,000 shares held individually by Dr. Snape and 15,000 shares held
by Danbury Management Company, LLC, with respect to which Dr. Snape
possesses shared voting and dispositive
authority.
|
All
of
the shares of our Common Stock outstanding prior to our Initial Public Offering
were placed in escrow with Continental Stock Transfer & Trust Company,
as escrow agent, until, subject to certain limited exceptions (each of which
requires that the shares remain in escrow for the required period) six months
after the consummation of a liquidation, merger, stock exchange or other similar
transaction which results in our Public Stockholders having the right to
exchange their shares of Common Stock for cash, securities or other property
subsequent to our consummating a Business Combination with a target business.
During the escrow period, the holders of these shares will not be able to sell
or transfer their securities except to their spouses and children, trusts
established for their benefit, or to affiliated companies, but will retain
all
other rights as our stockholders, including, without limitation, the right
to
vote their shares of Common Stock (but subject, in the case of voting on a
proposed Business Combination, to the agreement described below) and the right
to receive cash dividends, if declared. If dividends are declared and payable
in
shares of Common Stock, such dividends will also be placed in escrow. If we
are
unable to effect a Business Combination and liquidate, none of our Initial
Stockholders will receive any portion of the liquidation proceeds with respect
to Common Stock owned by them prior to our Initial Public
Offering.
In
connection with any vote required to approve any Business Combination, our
directors, officers and those stockholders who owned shares of our Common Stock
prior to our Initial Public Offering have agreed to vote all of their shares,
including shares that they purchased in our Initial Public Offering or
thereafter, in accordance with the vote of the majority of the shares of Common
Stock voted by the Public Stockholders. As described in the table above, our
directors, officers and Initial Stockholders collectively owned as
of March 10, 2008, an aggregate of 2,795,000 shares of Common Stock,
or 20% of our then total outstanding shares. All of these shares will therefore
be voted on the acquisition proposal in accordance with the vote of the majority
of the shares of Common Stock voted by the Public Stockholders. If the
acquisition proposal is approved at the special meeting, our directors, officers
and Initial Stockholders intend to vote all of these shares in favor of the
amendment proposal and the incentive compensation plan proposal.
In
addition, as of March 10, 2008, our directors and executive officers owned
an
aggregate of 2,923,077 Private Placement Warrants. The Private Placement
Warrants will become exercisable, at a price of $5.00 per share of Common Stock,
on the later of February 12, 2008 and the date of our consummation of a Business
Combination.
|
ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
In
February 2007, certain of our Initial Stockholders purchased 2,923,077
Private Placement Warrants at $0.65 per Private Placement Warrant. The Private
Placement Warrants will become exercisable at a price of $5.00 per share of
Common Stock, on the later of February 12, 2008 or the date of our
consummation of a Business Combination.
The
following table sets forth the name and respective number of Private Placement
Warrants owned by each of such Initial Stockholders as of March 10,
2008:
|
James
E McGrath
|
|
|
461,538
|
|
|
John
F. Rousseau
|
|
|
384,616
|
|
|
Greg
Zaic
|
|
|
180,000
|
|
|
Thomas
Hancock
|
|
|
178,462
|
|
|
Vincent
T. Pica II
|
|
|
461,538
|
|
|
Sidney
Braginsky
|
|
|
153,846
|
|
|
Hardwick
Simmons
|
|
|
76,923
|
|
|
Edwin
Snape
|
|
|
180,000
|
|
|
Maruna
Partners, LLC
|
|
|
846,154
|
|
|
|
|
|
|
|
All
shares of Common Stock outstanding prior to our Initial Public Offering were
placed into an escrow account with Continental Stock Transfer & Trust
Company and, with certain limited exceptions, will not be tradeable until six
months after our consummation of a Business Combination.
The
holders of the majority of the shares of Common Stock outstanding prior to
our
Initial Public Offering will be entitled to make up to two demands that we
register these shares and the shares which they may receive upon exercise of
the
warrants described above. The holders of the majority of these shares may elect
to exercise these registration rights at any time after the date on which these
shares of Common Stock are released from escrow. In addition, these stockholders
have certain “piggy-back” registration rights on registration statements filed
subsequent to the date on which these shares of Common Stock are released from
escrow. We will bear the expenses incurred in connection with the filing of
any
such registration statements.
We
maintain our executive offices at 400 Crown Colony Drive, Suite 104,
Quincy, Massachusetts 02169. NEGF Advisory Company Inc., an affiliate of
John F. Rousseau, our Chief Operating Officer and a director, and Edwin Snape,
a
director, has agreed to provide us with certain limited administrative,
technology and secretarial services under a lease and services agreement, as
well as the use of certain limited office space, including a conference room,
at
this location pursuant to a letter agreement between us and NEGF Advisory
Company Inc. The cost for the foregoing services to be provided to us by
NEGF Advisory Company Inc. is $4,500 per month. These arrangements are
solely for our benefit and are not intended to provide Messrs. Rousseau or
Snape compensation in lieu of salary. We believe, based on rents and fees for
similar services in the Quincy, Massachusetts area, that the fee charged by
NEGF
Advisory Company Inc. is at least as favorable as we could have obtained
from an unaffiliated person.
The
Company issued an unsecured promissory note to one of its Initial Stockholders
in the aggregate principal amount of $75,000 on June 16, 2006. This note
was non-interest bearing and fully repaid on February 16, 2007 with the
proceeds of the Initial Public Offering.
In
addition, the Company has received $52,000 in advances from certain of its
Initial Stockholders that bear no interest and were to be repaid no later than
the consummation of the Initial Public Offering. On February 16, 2007, the
Company repaid $49,699 of these advances, leaving a balance of $2,301 as of
December 31, 2007.
We
will
reimburse our officers and directors for any reasonable out-of-pocket business
expenses incurred by them in connection with certain activities on our behalf
such as identifying and investigating possible target businesses and Business
Combinations. We have reimbursed our officers and directors for an aggregate
of
$40,165 of expenses which they had incurred on our behalf between the completion
of our Initial Public Offering on February 16, 2007 through December 31,
2007. There is no limit on the amount of accountable out-of-pocket expenses
reimbursable by us, which will be reviewed only by our board of directors or
a
court of competent jurisdiction if such reimbursement is
challenged.
Other
than the $4,500 per-month administrative fee and reimbursable out-of-pocket
expenses payable to our officers and directors, no compensation or fees of
any
kind, including finder’s and consulting fees, has been or will be paid to any of
our Initial Stockholders, officers or directors who owned our Common Stock
prior
to our Initial Public Offering, or to any of their respective affiliates for
services rendered to us prior to or with respect to the Business
Combination.
|
ITEM
14.
|
PRINCIPAL
ACCOUNTANT FEES AND
SERVICES
|
On
January 31, 2008, we were notified that the
partners of Goldstein Golub Kessler LLP (“GGK”) became partners of McGladrey
& Pullen, LLP (“M&P”) in a limited asset purchase agreement and
that, as a result thereof, GGK has resigned as our independent registered public
accounting firm. McGladrey & Pullen, LLP was subsequently engaged as
our new independent registered public accounting firm. The following is a
summary of fees paid to GGK for services provided.
The
firm
of GGK acted as our principal accountant. GGK had a continuing
relationship with
RSM
McGladrey, Inc. (“RSM”)
,
from
which it leased auditing staff who are full time, permanent employees of RSM
and
through which its partners provide non-audit services. GGK had no full
time employees and therefore, none of the audit services performed were provided
by permanent full-time employees of GGK. GGK manages and supervises the
audit and audit staff, and is exclusively responsible for the opinion rendered
in connection with this examination.
Other
services, which consist of tax return preparation services and do not include
Financial Information Systems Design and Implementation fees, have been provided
by RSM.
Audit
Fees
Fees
for
services provided by GGK in connection with the audit of our December 31, 2006
financial statements were $12,500.
During
2007, fees for services provided by GGK in connection with our filing of
quarterly reports on Form 10-Q for the quarters ended March 31, 2007,
June 30, 2007 and September 30, 2007 totaled $21,737. We expect M&P’s
fees in connection with the audit of the December 31, 2007 financial statements
to be between $20,000 and $25,000.
Fees
for
services GGK performed in connection with our Initial Public Offering, including
the financial statements included in the Current Report on Form 8-K filed with
the SEC on February 22, 2007, were $17,500.
Audit-Related
Fees
During
2007 and 2006, GGK did not render assurance and related services reasonably
related to the performance of the audit or review of financial
statements.
Tax
Fees
During
2007, RSM’s fees for preparation of our 2006 federal and Massachusetts tax
returns were $1,480.
All
Other Fees
During
2007 and 2006, there were no fees billed for products and services provided
by
GGK other than those set forth above.
PART
IV
|
ITEM
15.
|
EXHIBITS
AND FINANCIAL STATEMENT
SCHEDULES
|
(1)
Financial
Statements
See
Index
to Consolidated Financial Statements commencing on Page F-1.
(2)
Financial
Statement Schedules
All
supplemental schedules have been omitted since the required information is
not
present in amounts sufficient to require submission of the schedule, or because
the required information is included in the consolidated financial statements
or
notes thereto.
(3)
Exhibits
The
following exhibits are filed as part of this report:
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
|
|
3.1
|
|
Amended
and Restated Certificate of Incorporation.(1)
|
|
3.2
|
|
Bylaws.
(1)
|
|
4.1
|
|
Specimen
Unit Certificate. (2)
|
|
4.2
|
|
Specimen
Common Stock Certificate. (2)
|
|
4.3
|
|
Specimen
Warrant Certificate. (2)
|
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
|
|
4.4
|
|
Form
of Warrant Agreement between Continental Stock Transfer & Trust
Company and the Registrant. (2)
|
|
4.5
|
|
Form
of Unit Purchase Option. (2)
|
|
10.1
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and John F. Rousseau, Jr. (1)
|
|
10.2
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Edwin Snape. (1)
|
|
10.3
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and James McGrath. (1)
|
|
10.4
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Gregory Zaic. (1)
|
|
10.5
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Thomas Hancock. (1)
|
|
10.6
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Vincent T. Pica II. (2)
|
|
10.7
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Sidney Braginsky. (1)
|
|
10.8
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann &
Co. Inc. and Hardwick Simmons. (2)
|
|
10.9
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann &
Co. Inc. and Thompson Dent. (2)
|
|
10.10
|
|
Form
of Investment Management Trust Agreement between Continental Stock
Transfer & Trust Company and the Registrant. (4)
|
|
10.11
|
|
Form
of Warrant Escrow Agreement between the Registrant, Continental Stock
Transfer & Trust Company and the Warrant Purchasers.
(3)
|
|
10.12
|
|
Form
of Stock Escrow Agreement between the Registrant, Continental Stock
Transfer & Trust Company and the Initial Stockholders. Filed as
Exhibit 10.10 on June 28, 2006. (1)
|
|
10.13
|
|
Form
of Letter Agreement between NEGF Advisory Company Inc. and the Registrant
regarding administrative support. (1)
|
|
10.14
|
|
Advance
Agreement between the Registrant and Danbury Management Company,
LLC dated
June 16, 2006. (1)
|
|
10.15
|
|
Form
of Registration Rights Agreement among the Registrant and the Initial
Stockholders.(3)
|
|
10.16
|
|
Form
of Warrant Placement Agreement among certain initial stockholders,
Ladenburg Thalmann & Co. Inc. and the Company. (3)
|
|
14.1
|
|
Code
of Ethics (1)
|
|
14.2
|
|
Code
of Ethics for Senior Financial Officers (1)
|
|
16
|
|
Letter
addressed to the Securities and Exchange Commission, dated
February 4, 2008, indicating
Goldstein
Golub Kessler LLP
’s
agreement with the statements contained in our Current Report on
Form 8-K filed on February 6, 2008. (5)
|
|
21
|
|
List
of Subsidiaries*
|
|
31.1
|
|
Principal Executive
Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.*
|
|
31.2
|
|
Principal
Financial and Accounting Officer Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|
|
32.1
|
|
Certification
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
99.1
|
|
Audit
Committee Charter (1)
|
*Filed
herewith.
|
|
(1)
|
Incorporated
by reference to our Registration Statement on Form S-1 (File
No. 333-135419) filed with the SEC on June 28,
2006.
|
|
|
(2)
|
Incorporated
by reference to Amendment No. 1 to our Registration Statement on
Form S-1
(File No. 333-135419) filed with the SEC on August 9,
2006.
|
|
|
(3)
|
Incorporated
by reference to Amendment No. 2 to our Registration Statement on
Form S-1
(File No. 333-135419) filed with the SEC on October 2,
2006.
|
|
|
(4)
|
Incorporated
by reference to Amendment No. 5 to our Registration Statement on
Form S-1
(File No. 333-135419) filed with the SEC on January 26,
2007.
|
|
|
(5)
|
Incorporated
by reference to our Current Report on Form 8-K filed with the SEC
on
February 6, 2008.
|
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
Reports
of Independent Registered Public Accounting Firms
|
F-2
|
|
Consolidated
Balance Sheets
|
F-4
|
|
Consolidated
Statements of Operations
|
F-5
|
|
Consolidated
Statement of Stockholders’ Equity
|
F-6
|
|
Consolidated Statements
of Cash Flows
|
F-7
|
|
Notes
to Consolidated Financial Statements
|
F-8
|
Report
of Independent Registered Public Accounting Firm
To
the
Board of Directors
Geneva
Acquisition Corp.
We
have
audited the accompanying consolidated balance sheet of Geneva Acquisition Corp.
(a development stage corporation) as of December 31, 2007,
and
the
related statements of operations, stockholders' equity, and cash flows for
the
year then ended and the amounts included in the cumulative columns in the
statements of operations and cash flows for the year ended December 31,
2007. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Geneva Acquisition Corp. as of
December 31, 2007, and the results of its operations and its cash flows for
the year then ended
in
conformity with U.S. generally accepted accounting principles.
/s/
McGladrey & Pullen, LLP
McGladrey
& Pullen, LLP
New
York,
New York
March
31,
2008
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors
Geneva
Acquisition Corp.
We
have
audited the accompanying balance sheet of Geneva Acquisition Corporation (a
development stage company) (the "Company") as of December 31, 2006, and the
related statements of operations, stockholders' equity and cash flows for the
period from June 2, 2006 (inception) to December 31, 2006. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Geneva Acquisition Corp. as of
December 31, 2006, and the results of its operations and its cash flows for
the period from June 2, 2006 (inception) to December 31, 2006 in
conformity with United States generally accepted accounting principles.
/s/
GOLDSTEIN GOLUB KESSLER
LLP
GOLDSTEIN
GOLUB KESSLER LLP
New
York,
New York
Geneva
Acquisition Corporation and Subsidiary
(A
Development Stage Company)
Consolidated
Balance Sheets
|
|
|
December 31, 2007
|
|
December 31, 2006
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
17,042
|
|
$
|
615
|
|
|
Investments
Held in Trust
|
|
|
66,983,581
|
|
|
-
|
|
|
Investments
Held in Trust for Deferred Underwriting Discount
|
|
|
2,070,000
|
|
|
-
|
|
|
Prepaid
expenses
|
|
|
85,425
|
|
|
-
|
|
|
Total
current assets
|
|
|
69,156,048
|
|
|
615
|
|
|
Deferred
tax asset
|
|
|
157,172
|
|
|
-
|
|
|
Deferred
offering costs
|
|
|
-
|
|
|
271,385
|
|
|
Total
Assets
|
|
$
|
69,313,220
|
|
$
|
272,000
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
And Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued
Offering Expenses
|
|
$
|
-
|
|
$
|
125,000
|
|
|
Accrued
Expenses
|
|
|
194,444
|
|
|
-
|
|
|
Advances
from Stockholder
|
|
|
2,301
|
|
|
52,000
|
|
|
Notes
Payable, Stockholders
|
|
|
-
|
|
|
75,000
|
|
|
Deferred
Interest Income
|
|
|
54,000
|
|
|
-
|
|
|
Deferred
Underwriting Discount
|
|
|
2,070,000
|
|
|
-
|
|
|
Total
Liabilities
|
|
|
2,320,745
|
|
|
252,000
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock subject to possible conversion, 2,298,850 shares at conversion
value
|
|
|
13,067,463
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Preferred
Stock, $.0001 par value, 1,000,000 shares authorized;
|
|
|
-
|
|
|
-
|
|
|
none
issued or outstanding
|
|
|
|
|
|
|
|
|
Common
Stock, $.0001 par value, 60,000,000 shares authorized; 14,000,000
shares
(which includes 2,298,850 subject to possible conversion) and 2,500,000
shares issued and outstanding at December 31, 2007 and December 31,
2006
respectively.
|
|
|
1,400
|
|
|
250
|
|
|
Additional
Paid-in Capital
|
|
|
52,364,993
|
|
|
24,750
|
|
|
Earnings
(Deficit) Accumulated during the development stage
|
|
|
1,558,619
|
|
|
(5,000
|
)
|
|
Total
Stockholders' Equity
|
|
|
53,925,012
|
|
|
20,000
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$
|
69,313,220
|
|
$
|
272,000
|
|
See
notes
to financial statements
Geneva
Acquisition Corporation and Subsidiary
(A
Development Stage Company)
Consolidated
Statements of Operations
|
|
|
Year Ended
December 31, 2007
|
|
Period from June
2, 2006 (inception)
to December 31, 2006
|
|
Cumulative Period from June
2, 2006 (inception)
to December 31, 2007
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
Interest
income
|
|
$
|
2,956,345
|
|
$
|
-
|
|
$
|
2,956,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
Administrative
|
|
|
542,272
|
|
|
5,000
|
|
|
547,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss) before income taxes
|
|
$
|
2,414,073
|
|
$
|
(5,000
|
)
|
$
|
2,409,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
$
|
850,454
|
|
$
|
-
|
|
$
|
850,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
1,563,619
|
|
$
|
(5,000
|
)
|
$
|
1,558,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average number of common shares outstanding - basic and
diluted
|
|
|
12,468,493
|
|
|
2,500,000
|
|
|
8,764,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) per Share - basic and diluted
|
|
$
|
0.13
|
|
$
|
(0.00
|
)
|
$
|
0.18
|
|
See
notes
to financial statements
Geneva
Acquisition Corporation and Subsidiary
(A
Development Stage Company)
Consolidated
Statement of Stockholders' Equity
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Additional
Paid-in Capital
|
|
Earnings (Deficit) Accumulated
During the
Development Stage
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of Common Stock to initial Stockholders on June 9, 2006 at $.01 per
share.
|
|
|
2,500,000
|
|
$
|
250
|
|
$
|
24,750
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(5,000
|
)
|
$
|
(5,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2006
|
|
|
2,500,000
|
|
$
|
250
|
|
$
|
24,750
|
|
$
|
(5,000
|
)
|
$
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale
of Private Placement Warrants
|
|
|
-
|
|
|
-
|
|
|
1,900,000
|
|
|
-
|
|
|
1,900,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale
of 11,500,000 Units net of underwriter's discount and offering expenses
(includes 2,298,850 shares subject to possible conversion)
|
|
|
11,500,000
|
|
|
1,150
|
|
|
63,507,606
|
|
|
-
|
|
|
63,508,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
subject to possible conversion of 2,298,850 shares
|
|
|
-
|
|
|
-
|
|
|
(13,067,463
|
)
|
|
-
|
|
|
(13,067,463
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale
of underwriter option
|
|
|
-
|
|
|
-
|
|
|
100
|
|
|
-
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,563,619
|
|
|
1,563,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2007
|
|
|
14,000,000
|
|
$
|
1,400
|
|
$
|
52,364,993
|
|
$
|
1,558,619
|
|
$
|
53,925,012
|
|
See
notes
to financial statements
Geneva
Acquisition Corporation and Subsidiary
(A
Development Stage Company)
Consolidated
Statements of Cash Flows
|
|
|
Year
ended December 31, 2007
|
|
Period from June
2, 2006 (inception)
to December 31, 2006
|
|
Cumulative Period from June
2, 2006 (inception) to
December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
1,563,619
|
|
$
|
(5,000
|
)
|
$
|
1,558,619
|
|
|
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
tax asset
|
|
|
(157,172
|
)
|
|
|
|
|
(157,172
|
)
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in value of investments held in trust
|
|
|
(3,010,345
|
)
|
|
|
|
|
(3,010,345
|
)
|
|
Increase
in prepaid expenses
|
|
|
(85,425
|
)
|
|
|
|
|
(85,425
|
)
|
|
Increase
in accrued expenses
|
|
|
194,444
|
|
|
|
|
|
194,444
|
|
|
Increase
in deferred interest income
|
|
|
54,000
|
|
|
-
|
|
|
54,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash used in Operating Activities
|
|
|
(1,440,879
|
)
|
|
(5,000
|
)
|
|
(1,445,879
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disbursements
from trust
|
|
|
1,396,764
|
|
|
|
|
|
1,396,764
|
|
|
Cash
held in Trust Account
|
|
|
(67,440,000
|
)
|
|
-
|
|
|
(67,440,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash used in Investing Activities
|
|
|
(66,043,236
|
)
|
|
-
|
|
|
(66,043,236
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from public offering
|
|
|
69,000,000
|
|
|
-
|
|
|
69,000,000
|
|
|
Proceeds
from private placement of warrants
|
|
|
1,900,000
|
|
|
-
|
|
|
1,900,000
|
|
|
Proceeds
from issuance of underwriting option
|
|
|
100
|
|
|
-
|
|
|
100
|
|
|
Proceeds
from sale of stock
|
|
|
-
|
|
|
25,000
|
|
|
25,000
|
|
|
Proceeds
from notes payable, Stockholders
|
|
|
-
|
|
|
75,000
|
|
|
75,000
|
|
|
Proceeds
from advances from Stockholders
|
|
|
15,000
|
|
|
37,000
|
|
|
52,000
|
|
|
Payments
of notes payable, Stockholders
|
|
|
(75,000
|
)
|
|
-
|
|
|
(75,000
|
)
|
|
Payments
of advances from Stockholders
|
|
|
(64,699
|
)
|
|
-
|
|
|
(64,699
|
)
|
|
Payment
of offering costs
|
|
|
(3,274,859
|
)
|
|
(131,385
|
)
|
|
(3,406,244
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash provided by Financing Activities
|
|
|
67,500,542
|
|
|
5,615
|
|
|
67,506,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase in Cash
|
|
|
16,427
|
|
|
615
|
|
|
17,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at beginning of period
|
|
|
615
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at end of period
|
|
$
|
17,042
|
|
$
|
615
|
|
$
|
17,042
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income taxes
|
|
$
|
1,020,262
|
|
$
|
-
|
|
$
|
1,020,262
|
|
|
Non-cash
financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Accrual
of Public Offering costs
|
|
$
|
-
|
|
$
|
125,000
|
|
$
|
-
|
|
|
Accrual
of deferred underwriting fees
|
|
$
|
2,070,000
|
|
$
|
-
|
|
$
|
2,070,000
|
|
|
Advance
from Stockholder for Public Offering costs
|
|
$
|
-
|
|
$
|
52,000
|
|
$
|
-
|
|
See
notes
to financial statements
Geneva
Acquisition Corporation and Subsidiary
(A
Development Stage Company)
Notes
to Consolidated Financial Statements
1.
Summary of Significant Accounting Policies
Basis
of Presentation
The
consolidated financial statements include the accounts of Geneva Acquisition
Corporation and its wholly owned subsidiary Geneva Acquisition Security
Corporation (collectively referred to as the “Company”). All significant
intercompany transactions and balances have been eliminated. The statements
and
related notes have been prepared on the accrual basis of accounting in
accordance with accounting principals generally accepted in the United
States.
Statements
of Cash Flows
For
purposes of the statements of cash flows, we consider all highly liquid
investments (i.e., investments which, when purchased, have original maturities
of three months or less) to be cash equivalents.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts
of
assets and liabilities and disclosure of contingent assets and liabilities
at
the date of the financial statements and reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to credit risk consist of
cash
equivalents and short-term investments. The Company’s policy is to place
investments with financial institutions evaluated as being creditworthy, or
in
short-term money market funds which are exposed to minimal interest rate and
credit risk and in a highly rated United States Treasury Bills. At times,
the Company has bank balances in excess of federally insured
limits.
Fair
Value of Financial Instruments
The
following methods and assumptions are used to estimate the fair value of each
class of financial instruments for which it is practical to
estimate:
Cash
:
The carrying amount approximates the fair value.
Investments
Held in Trust (which includes deferred underwriting fees and amounts available
for working capital and income taxes):
This investment is considered a trading security. The investment is
carried at market value, which approximates cost plus accrued
interest.
Income
taxes
Deferred
income tax assets and liabilities are computed for differences between the
financial statement and tax basis of assets and liabilities that will result
in
future taxable or deductible amounts and are based on enacted tax laws and
rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred income tax assets to the amount expected to be
realized.
In
June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” an
interpretation of FASB Statement No. 109 (“FIN 48”), which provides
criteria for the recognition, measurement, presentation and disclosure of
uncertain tax positions. A tax benefit from an uncertain position may be
recognized only if it is “more likely than not” that the position is sustainable
based on its technical merits. The Company adopted FIN 48 on January 1,
2007. Since the Company is a development stage company that began
operations on June 2, 2006, there have been no audits of filed tax returns
as of
this time, however, the Company believes its accruals are sufficient and it
does
not expect the total amounts of any uncertain tax position to significantly
increase or decrease within the next year. The adoption of FIN 48 did not
have a material effect on the Company’s financial condition, results of
operations or liquidity
.
Earnings
(Loss) per common share
Basic
earnings per share is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during the period. Diluted earnings
per share gives effect to dilutive options, warrants, and other potential common
stock outstanding during the period. The effect of the 25,923,077 outstanding
warrants issued in connection with the initial public offering described in
Note 3 has not been considered in the diluted net income per share since
the warrants are contingently exercisable. The effect of the 700,000 units
included in the underwriters’ purchase option, as described in Note 3,
along with the warrants underlying such units (units represent 2.1 million
shares of stock and stock equivalents), has not been considered in the
diluted earnings per share calculation since they are contingently exercisable
and since the market price of the shares was less than the exercise price
during the period.
Recently
Issued Accounting
Pronouncements:
The
following accounting standards issued as of December 31, 2007, may affect the
future financial reporting by Geneva Acquisition Corporation:
|
SFAS
No. 141 (revised 2007)
Business
Combinations
|
This
Statement requires an acquirer to recognize the assets acquired,
the
liabilities assumed, and any non controlling interest in the acquiree
at
the acquisition date, measured at their fair values as of that date,
with
limited exceptions specified in the Statement. That replaces Statement
141’s cost-allocation process, which required the cost of an acquisition
to be allocated to the individual assets acquired and liabilities
assumed
based on their estimated fair values. This Statement applies prospectively
to business combinations for which the acquisition date is on or
after the
beginning of the first annual reporting period beginning on or after
December 15, 2008. An entity may not apply it before that date. The
Company is assessing the impact, if any, this pronouncement may have
on
its financial statements.
|
|
|
|
|
SFAS
No. 157,
Fair
Value Measurements
|
This
Statement does not require any new fair value measurements, but rather,
it
provides enhanced guidance to other pronouncements that require or
permit
assets or liabilities to be measured at fair value. However, the
application of this Statement may change how fair value is determined.
The
Statement is effective for financial statements issued for fiscal
years
beginning after November 15, 2007, and interim periods within those
fiscal
years. As of December 1, 2007 the FASB has proposed a one-year deferral
for the implementation of the Statement for nonfinancial assets and
nonfinancial liabilities that are recognized or disclosed at fair
value in
the financial statements on a nonrecurring basis. The Company is
assessing
the impact, if any, this pronouncement may have on its financial
statements.
|
|
|
|
|
SFAS
No. 159,
The
Fair Value Option for
Financial
Assets and Financial Liabilities -
Including
an amendment of FASB
Statement
No. 115
|
The
Statement provides all entities with an option to report selected
financial assets and liabilities at fair value. The Statement is
effective
as of the beginning of an entity’s first fiscal year beginning after
November 15, 2007, with early adoption available in certain circumstances.
The Company is assessing the impact, if any, this pronouncement may
have
on its financial statements.
|
|
|
|
|
SFAS
No. 160,
Noncontrolling
Interests in
Consolidated
Financial Statements - an
amendment
of ARB No. 51
|
This
Statement amends ARB 51 to establish accounting and reporting standards
for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated
entity that should be reported as equity in the consolidated financial
statements. This Statement is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December
15, 2008
(that is, January 1, 2009, for entities with calendar year-ends.)
Earlier
adoption is prohibited. The Company is assessing the impact, if any,
this
pronouncement may have on its financial
statements.
|
2.
Organization and Business Operations
Geneva
Acquisition Corporation was incorporated in Delaware on June 2, 2006 as a
"blank check" company whose objective is to consummate a business
combination with an operating business.
On
June 9, 2006, all of the officers and directors of the Company ("Initial
Stockholders") purchased 2,500,000 shares of common stock at $0.01 per
share.
At
December 31, 2007, the Company had not yet commenced any operations. All
activity through December 31, 2007 relates to the Company's formation,
regulatory filings, its initial public offering described below and thereafter,
pursuing potential business combinations with target businesses. The
Company has selected December 31 as its fiscal year-end.
The
registration statement for the Company's initial public offering (the "Public
Offering") (as described in Note 3) was declared effective
February 12, 2007 (the "Effective Date"). The Company consummated the
Public Offering on February 16, 2007, and simultaneously with the
consummation of the Public Offering on February 16, 2007, certain officers,
directors, and the Initial Stockholders of the Company purchased an aggregate
of
2,923,077 warrants at $0.65 per warrant from the Company in a private placement
(the "Private Placement"). The warrants sold in the Private Placement were
identical to the warrants sold in the Public Offering except that if the Company
calls the warrants for redemption, the Private Placement Warrants will be
exerciseable on a cashless basis so long as they are still held by the initial
purchasers. On March 8, 2007, the underwriters consummated the full
exercise of the over-allotment option, resulting in the sale of an additional
1,500,000 units (see Note 3 below). The Company received net proceeds from
the Private Placement and the Public Offering, including the proceeds received
upon the full exercise of the over-allotment option, of approximately
$65,409,000 (see Note 3 below).
The
Company's management has broad discretion with respect to the specific
application of the net proceeds of the Public Offering, although substantially
all of the net proceeds of the Public Offering are intended to be generally
applied toward consummating a business combination with an operating business
("Business Combination"), which may not constitute a business combination for
accounting purposes. Furthermore, there is no assurance that the Company will
be
able to successfully effect a Business Combination. Upon the closing of the
Public Offering, $67,440,000, including $2,070,000 of deferred underwriting
discounts, was placed in a trust account ("Trust Account") and has been invested
in government securities until the earlier of (i) the consummation of its
first Business
Combination or (ii) liquidation of the Company. As of December 31,
2007, $69,053,581 was held in the Trust Account, of which $2,070,000 was for
deferred underwriting discount and $3,010,345 was earned investment income.
We are entitled to receive up to $1,600,000. Initial plus amounts for
corporate income and franchise taxes, from interest earned on the trust
account (plus $50,000 received from the net proceeds of the Initial Public
Offering) to finance our operations prior to consummating a business
combination. The placing of funds in the Trust Account may not protect those
funds from third party claims against the Company. Although the Company will
seek to have all vendors, prospective target businesses or other entities it
engages, execute agreements with the Company 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. Certain of the Company's
directors have severally agreed that they will be personally liable under
certain circumstances to ensure that the proceeds in the Trust Account are
not
reduced by the claims of target businesses or vendors or other entities that
are
owed money by the Company for services rendered, contracted for or products
sold
to the Company. However, there can be no assurance that the directors will
be
able to satisfy those obligations. The remaining net proceeds (not held in
the
Trust Account), along with interest earned on the Trust Account, may be used
to
pay for business, legal and accounting due diligence on prospective acquisitions
and continuing general and administrative expenses. The Company, after signing
a
definitive agreement for the acquisition of a target business, is required
to
submit such transaction for stockholder approval. In the event that stockholders
owning 20% or more of the shares sold in the Public Offering vote against the
Business Combination and exercise their conversion rights described below,
the
Business Combination will not be consummated. All of the Company's stockholders
prior to the Public Offering, including the Initial Stockholders, have agreed
to
vote their 2,500,000 founding shares of common stock, as well as any shares
of
common stock acquired in connection with or following the Public Offering,
in
accordance with the vote of the majority in interest of all other stockholders
of the Company ("Public Stockholders") with respect to any Business Combination.
After consummation of a Business Combination, these voting safeguards will
no
longer be applicable.
With
respect to a Business Combination which is approved and consummated, any Public
Stockholder who voted against the Business Combination may demand that the
Company convert his or her shares. The per share conversion price will equal
the
amount in the Trust Account, calculated as of two business days prior to the
consummation of the proposed Business Combination, divided by the number of
shares of common stock held by Public Stockholders at the consummation of the
Public Offering. Accordingly, Public Stockholders holding 19.99% of the
aggregate number of shares owned by all Public Stockholders may seek conversion
of their shares in the event of a Business Combination. Such Public Stockholders
are entitled to receive their per share interest in the Trust Account (subject
to distributions for working capital and amounts paid or accrued for taxes)
computed without regard to the 2,500,000 shares held by Initial Stockholders.
Accordingly, a portion of the net proceeds from the Public Offering (19.99%
of
the amount held in the Trust Account, excluding the deferred portion of the
underwriters' discount and commission) has been classified as common stock
subject to possible conversion on the accompanying December 31, 2007
balance sheet. In addition, such Public Stockholders would also be entitled
to a
pro rata portion of the deferred portion of the underwriters' discount and
commission held in trust (see Note 3).
The
Company's Second Amended and Restated Certificate of Incorporation provides
that
the Company will continue in existence only until 24 months from the
Effective Date of the Public
Offering. If the Company has not completed a Business Combination by such date,
its corporate existence will cease and it will dissolve and liquidate for the
purposes of winding up its affairs. In the event of liquidation, it is likely
that the per share value of the residual assets remaining available for
distribution (including Trust Account assets) may be less than the initial
public offering price per share in the Public Offering (assuming no value is
attributed to the Warrants contained in the Units sold in the Public Offering
discussed in Note 3).
3.
Initial Public Offering
On
February 16, 2007, the Company sold 10,000,000 Units ("Units") in the
Public Offering at a price of $6.00 per Unit. On March 8, 2007, the
underwriters consummated the full exercise of the over-allotment option,
resulting in the sale of an additional 1,500,000 Units. Each Unit consists
of
one share of the Company's common stock and two Redeemable Common Stock Purchase
Warrants ("Warrants"). Each Warrant entitles the holder to purchase from the
Company one share of common stock at an exercise price of $5.00 commencing
the
later of the completion of a Business Combination or one year from the Effective
Date of the Public Offering, subject to there being an effective and current
registration statement relating to the shares issuable upon exercise of the
warrants, and expiring four years from the Effective Date of the Public
Offering. The Company may redeem the Warrants at a price of $.01 per Warrant
upon 30 days' notice after the Warrants become exercisable, only in the
event that the last sale price of the common stock is at least $8.50 per share
for any 20 trading days within a 30 trading day period ending on the third
day
prior to the date on which notice of redemption is given. The Company does
not
need to obtain the consent of Lazard Capital Markets LLC prior to calling the
warrants for redemption. In accordance with the warrant agreement relating
to
the Warrants sold and issued in the Public Offering, the Company is only
required to use its best efforts to maintain the effectiveness of the
registration statement covering the 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 statement is not
effective at the time of exercise, the holder of such Warrant shall not be
entitled to exercise such Warrant 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 the warrant exercise. Consequently, the Warrants
may
expire unexercised and unredeemed.
In
connection with the Public Offering, the Company paid the underwriters of the
Public Offering underwriting discounts and commissions of 7% of the gross
proceeds of the Public Offering, of which 3% of the gross proceeds will be
held
in the Trust Account and payable only upon the consummation of a Business
Combination. If a Business Combination is approved and completed, Public
Stockholders who voted against the combination and have exercised their
conversion rights will be entitled to their pro rata share of the deferred
underwriters' discount and commission.
Simultaneously
with the consummation of the Public Offering, certain of the Initial
Stockholders purchased 2,923,077 warrants ("Private Placement Warrants") at
a
purchase price of $0.65 per warrant, in the Private Placement. The proceeds
of
$1,900,000 were placed in the Trust Account. The Private Placement Warrants
are
identical to the Warrants underlying the Units sold in the Public Offering
except that if the Company calls the Warrants for redemption, the Private
Placement Warrants will be exercisable on a cashless basis so long as they
are
still held by the initial purchasers. The purchasers
have
agreed that the Private Placement Warrants will not be sold or transferred
by
them, until 30 days after the completion of a Business
Combination.
The
Initial Stockholders and the holders of the Private Placement Warrants will
be
entitled to registration rights with respect to their securities pursuant to
an
agreement signed on the Effective Date of the Public Offering. With respect
to
the shares issued prior to the completion of the Public Offering, the holders
of
the majority of these shares are entitled to demand that the Company register
these shares at any time commencing six months following the consummation of
a
Business Combination. With respect to the Private Placement Warrants (and
underlying shares), the holders of the majority of these securities are entitled
to demand that the Company register these shares at any time commencing three
months following the consummation of a Business Combination. In addition, such
holders have certain "piggy-back" registration rights on registration statements
filed subsequent to the Company's consummation of a Business
Combination.
In
connection with the Public Offering, the Company issued an option to Lazard
Capital Markets LLC for $100, to purchase 700,000 Units. The Units that would
be
issued upon exercise of the Underwriters Purchase Option ("UPO") are identical
to those offered by the Public Offering. This UPO is exercisable at $8.50 per
Unit commencing the later of the completion of a Business Combination or one
year from the Effective Date of the Public Offering, subject to there being
an
effective and current registration statement relating to the UPO or the Warrants
underlying such UPO issuable upon exercise of the option or an exemption from
registration, and expiring five years from the Effective Date of the Public
Offering. Additionally, in the event that a registration statement is not
effective at the time of exercise, the holder of such UPO or Warrant shall
not
be entitled to exercise such UPO or Warrant 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 the warrant exercise. Consequently, the UPO
and
the Warrants may expire unexercised and unredeemed.
The
sale of the UPO has been accounted for as an equity transaction. Accordingly,
there was no net impact on the Company's financial position or results of
operations, except for the recording of the $100 proceeds from the sale. The
Company has determined, based upon a Black-Scholes model, that the fair value
of
the option on the date of sale would be approximately $1,491,000 using an
expected life of five years, volatility of 45.2% and a risk-free interest rate
of 4.88%.
At
the time the UPO was issued, the Company had no trading history, as such it
was
not possible to value the UPO based on historical trades. In order to estimate
the value of the UPO the Company considered the historic volatilities of
publicly traded blank check companies that have completed business combinations.
The average volatility of the representative companies was calculated to be
45.2%. Management believes that this volatility is a reasonable benchmark to
use
in estimating the value of the UPO. The actual volatility of the Units will
depend on many factors that cannot be ascertained at this time.
4.
Limited Distributions of Income from Trust Account
Upon
written request from the Company, which may be given not more than once in
any
calendar month, the Trustee shall distribute to the Company by wire transfer
an
amount computed and certified by the Company to be equal to the collected and
undistributed income earned on the original amount deposited in the Trust
Account for the preceding month. The maximum amount of distributions, net of
taxes, that the Company may request and the Trustee shall distribute is
$1,600,000. The Company has received distributions, net of taxes, of $375,000
through December 31, 2007. These funds will be used for working capital
purposes associated with identifying and consummating a Business Combination.
If
there is any income tax obligation relating to the income of the property in
the
Trust Account, then, at the written instruction of the Company, the Trustee
shall disburse to the Company by wire transfer, out of the property in the
Trust
Account, the amount indicated by the Company as required to pay income taxes.
Such disbursements amounted to $1,021,764 through December 31,
2007.
|
Amount
placed in Trust
|
|
$
|
67,440,000
|
|
|
Interest
earned on Trust (includes deferred interest income)
|
|
|
3,010,345
|
|
|
Amounts
withdrawn for income tax payments
|
|
|
(1,021,764
|
)
|
|
Amounts
withdrawn for working capital
|
|
|
(375,000
|
)
|
|
Balance
at December 31, 2007
|
|
$
|
69,053,581
|
|
5.
Deferred Offering Costs
Deferred
offering costs consist principally of legal, accounting and other fees incurred
through the balance sheet date that are directly related to the Public Offering
and that were charged to stockholders' equity upon the receipt of the capital
raised.
The
components of the provision for income taxes are as follows:
|
|
|
Year ended
December 31, 2007
|
|
Year ended
December 31, 2006
|
|
|
Current:
|
|
|
|
|
|
|
Federal
|
|
$
|
962,674
|
|
$
|
—
|
|
|
State
and local
|
|
|
44,952
|
|
|
—
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(157,172
|
)
|
|
—
|
|
|
State
and local
|
|
|
—
|
|
|
—
|
|
|
Total
provision for income taxes
|
|
$
|
850,454
|
|
$
|
—
|
|
The
Company has recorded a valuation allowance on a portion of its state deferred
tax asset because management believes it is more likely that this asset will
not
be realized based on current operations.
The
Company’s effective tax rate differs from the effective federal tax rate of 34%
principally due to the following:
|
|
|
Year ended
December 31, 2007
|
|
|
Federal
statutory rate
|
|
|
34.0
|
%
|
|
State
and local tax
|
|
|
0.1
|
%
|
|
Change
in valuation allowance
|
|
|
1.1
|
%
|
|
|
|
|
35.2
|
%
|
|
|
|
Year ended
December 31, 2006
|
|
|
Federal
statutory rate
|
|
|
34.0
|
%
|
|
Increase
in valuation allowance
|
|
|
(34.0%
|
)
|
|
|
|
|
—
|
|
The
tax
effect of temporary differences that give rise to the deferred tax asset is
as
follows:
|
|
|
December 31, 2007
|
|
December 31, 2006
|
|
|
Expenses
deferred for income tax purposes
|
|
$
|
186,909
|
|
$
|
2,000
|
|
|
Less
valuation allowance
|
|
|
(29,737
|
)
|
|
($2,000
|
)
|
|
Total
|
|
$
|
157,172
|
|
$
|
0
|
|
7.
Notes Payable, Stockholders
The
Company issued an unsecured promissory note to one of its Initial Stockholders
in the aggregate principal amount of $75,000 on June 16, 2006. This note
was non-interest bearing and fully repaid on February 16, 2007 with the
proceeds of the Public Offering.
In
addition, the Company has received $52,000 in advances from certain of its
Initial Stockholders that bear no interest and were to be repaid no later than
the consummation of the Public Offering. On February 16, 2007, the Company
repaid $49,699 of these advances, leaving a balance of $2,301 as of
December 31, 2007.
8.
Commitments and Related Party Transactions
The
Company presently occupies office space provided by an affiliate of several
of
the Initial Stockholders. Such affiliate has agreed that, until the Company
consummates a Business Combination, it will make such office space, as well
as
certain office and secretarial services, available to the Company, as may be
required by the Company from time to time. The Company has agreed to pay such
affiliate $4,500 per month for such services commencing on the Effective Date
of
the Public Offering. The statement of operations includes $48,054 of such
expense for the twelve months ended December 31, 2007.
The
Initial Stockholders have entered into letter agreements that waive their right
to receive distributions with respect to their founding shares upon the
Company's liquidation.
9.
Preferred Stock
The
Company is authorized to issue 1,000,000 shares of preferred stock with such
designations, voting and other rights and preferences as may be determined
from
time to time by the Board of Directors.
10.
Reserved Common Stock
At
December 31, 2007, 28,023,077 shares of common stock were reserved for issuance
upon exercise of redeemable warrants and the UPO.
11.
Trust Account
For
tax planning purposes, the Company assigned its rights to the cash in the Trust
Account to Geneva Acquisition Security Corporation, a wholly-owned Massachusetts
subsidiary qualifying as a "security corporation" entitled to a reduced state
corporate tax rate.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
|
|
Geneva
Acquisition Corporation
|
|
|
(Registrant)
|
|
|
|
|
|
|
By:
|
/s/
JOHN F. ROUSSEAU, JR.
|
|
|
Name:
|
John
F. Rousseau, Jr.
|
|
|
Title:
|
Chief
Operating Officer
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been
signed below by the following persons on behalf of the Registrant and in
the
capacities indicated on the dates indicated.
|
Signature
|
|
Title
|
Date
|
|
|
|
|
|
|
/s/
Vincent P. Pica II
|
|
Chairman
of the Board
|
March
31, 2008
|
|
Vincent
P. Pica II
|
|
|
|
|
|
|
|
|
|
/s/
John F. Rousseau, Jr.
|
|
Chief
Operating Officer and
|
March
31, 2008
|
|
John
F. Rousseau, Jr.
|
|
Director (principal executive
|
|
|
|
|
officer)
|
|
|
|
|
|
|
|
/s/
Gregory F. Zaic
|
|
Treasurer
(principal financial
|
March
31, 2008
|
|
Gregory
F. Zaic
|
|
and accounting officer)
|
|
|
|
|
|
|
|
/s/
Sidney Braginsky
|
|
Director
|
March
31, 2008
|
|
Sidney
Braginsky
|
|
|
|
|
|
|
|
|
|
/s/
James E. McGrath
|
|
Director
|
March
31, 2008
|
|
James
E. McGrath
|
|
|
|
|
|
|
|
|
|
/s/
Hardwick Simmons
|
|
Director
|
March
31, 2008
|
|
Hardwick
Simmons
|
|
|
|
|
|
|
|
|
|
/s/
Edwin Snape
|
|
Director
|
March
31, 2008
|
|
Edwin
Snape
|
|
|
|
|
|
|
|
|
EXHIBIT
INDEX
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
|
|
3.1
|
|
Amended
and Restated Certificate of Incorporation
.
(1)
|
|
3.2
|
|
Bylaws.
(1)
|
|
4.1
|
|
Specimen
Unit Certificate. (2)
|
|
4.2
|
|
Specimen
Common Stock Certificate. (2)
|
|
4.3
|
|
Specimen
Warrant Certificate. (2)
|
|
4.4
|
|
Form
of Warrant Agreement between Continental Stock Transfer & Trust
Company and the Registrant. (2)
|
|
4.5
|
|
Form
of Unit Purchase Option. (2)
|
|
10.1
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and John F. Rousseau, Jr. (1)
|
|
10.2
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Edwin Snape. (1)
|
|
10.3
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and James McGrath. (1)
|
|
10.4
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Gregory Zaic. (1)
|
|
10.5
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Thomas Hancock. (1)
|
|
10.6
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Vincent T. Pica II. (2)
|
|
10.7
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann & Co.
Inc. and Sidney Braginsky. (1)
|
|
10.8
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann &
Co. Inc. and Hardwick Simmons. (2)
|
|
10.9
|
|
Form
of Letter Agreement among the Registrant, Ladenburg Thalmann &
Co. Inc. and Thompson Dent. (2)
|
|
10.10
|
|
Form
of Investment Management Trust Agreement between Continental Stock
Transfer & Trust Company and the Registrant. (4)
|
|
10.11
|
|
Form
of Warrant Escrow Agreement between the Registrant, Continental
Stock
Transfer & Trust Company and the Warrant Purchasers.
(3)
|
|
10.12
|
|
Form
of Stock Escrow Agreement between the Registrant, Continental Stock
Transfer & Trust Company and the Initial Stockholders. Filed as
Exhibit 10.10 on June 28, 2006. (1)
|
|
10.13
|
|
Form
of Letter Agreement between NEGF Advisory Company Inc. and the
Registrant
regarding administrative support. (1)
|
|
10.14
|
|
Advance
Agreement between the Registrant and Danbury Management Company,
LLC dated
June 16, 2006. (1)
|
|
10.15
|
|
Form
of Registration Rights Agreement among the Registrant and the Initial
Stockholders.(3)
|
|
10.16
|
|
Form
of Warrant Placement Agreement among certain initial stockholders,
Ladenburg Thalmann & Co. Inc. and the Company. (3)
|
|
14.1
|
|
Code
of Ethics (1)
|
|
14.2
|
|
Code
of Ethics for Senior Financial Officers (1)
|
|
16
|
|
Letter
addressed to the Securities and Exchange Commission, dated
February 4, 2008, indicating
Goldstein
Golub Kessler LLP
’s
agreement with the statements contained in our Current Report on
Form 8-K filed on February 6, 2008. (5)
|
|
21
|
|
List
of Subsidiaries*
|
|
31.1
|
|
Principal Executive
Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.*
|
|
31.2
|
|
Principal
Financial and Accounting Officer Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|
|
32.1
|
|
Certification
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
99.1
|
|
Audit
Committee Charter (1)
|
*Filed
herewith.
|
|
(1)
|
Incorporated
by reference to our Registration Statement on Form S-1 (File
No. 333-135419) filed with the SEC on June 28,
2006.
|
|
|
(2)
|
Incorporated
by reference to Amendment No. 1 to our Registration Statement on
Form S-1
(File No. 333-135419) filed with the SEC on August 9,
2006.
|
|
|
(3)
|
Incorporated
by reference to Amendment No. 2 to our Registration Statement on
Form S-1
(File No. 333-135419) filed with the SEC on October 2,
2006.
|
|
|
(4)
|
Incorporated
by reference to Amendment No. 5 to our Registration Statement on
Form S-1
(File No. 333-135419) filed with the SEC on January 26,
2007.
|
|
|
(5)
|
Incorporated
by reference to our Current Report on Form 8-K filed with the SEC
on
February 6, 2008.
|
Geneva Acquisition Corp. (AMEX:GAC)
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