Quarterly report pursuant to sections 13 or 15(d)

Restatement of Previously Issued Condensed Financial Statements

v2.4.0.6
Restatement of Previously Issued Condensed Financial Statements
6 Months Ended
Jun. 30, 2012
Restatement Of Previously Issued Condensed Financial Statements [Abstract]  
Restatement Of Previously Issued Condensed Financial Statements [Text Block]

Note 2 – Restatement of Previously Issued Condensed Financial Statements

 

The Company has restated its condensed financial statements as of June 30, 2012 to correct its accounting for an adjustment made for its warrants. The Company’s original accounting treatment didn’t recognize a derivative liability and did not recognize changes in the fair value of that derivate liability in its condensed statement of operations.

 

In December 2012, the Company concluded it should correct its accounting related to the Company’s outstanding warrants. The Company had initially accounted for the warrants as a component of equity but upon further evaluation of the terms of the warrant, concluded that the warrants should be accounted for as a derivative liability. The warrants contain a restructuring price adjustment provision, such that, in the event the Company completes a business combination subsequent to the initial Business Combination which results in the Company’s shares no longer being listed on a national exchange or the OTC Bulletin Board, the exercise price of the warrants will decrease by formula that causes the warrants to not be indexed to the Company’s own shares. As a result of this provision, the Company has restated its financial statements to reflect the Company’s warrants as a derivative liability with changes in the fair value recorded in the current period earnings.

 

The following table summarizes the adjustments made to the previously reported June 30, 2012 condensed balance sheet, condensed statement of operations, condensed statement of cash flows, and condensed statement of shareholders’ equity.

Selected condensed balance sheet information as of June 30, 2012:

June 30,
2012 (as
previously
reported)
Effect of
Restatement
June 30,
2012
(As Restated)
Liabilities:
Warrant liability $ $ 4,573,000 $ 4,573,000
Total liabilities 2,278,803 4,573,000 6,851,803
Maximum ordinary shares subject to possible redemption 43,301,744 (4,573,000 ) 38,728,744
Equity
Ordinary shares 1,940 459 2,399
Additional paid-in capital 5,642,857 (90,125 ) 5,552,732
Deficit accumulated during the development stage (644,796 ) 89,667 (555,130 )
Total equity 5,000,001 5,000,001
Total liabilities and equity $ 50,580,547 $ $ 50,580,547

 

Selected condensed statement of operations information for the three months period and six months period ended June 30, 2012:

 

For the three months ended June 30, 2012
(as previously reported)
Effect of
Restatement
For the three months ended June 30, 2012
(As Restated)
Gain on change in fair value of warrant liability $ $ 358,667 $ 358,667
Net income (loss) $ (182,935 ) $ 358,667 $ 175,732
Basic and diluted net income (loss) per share $ (0.03 ) $ 0.06 $ 0.03

 

For the six months ended June 30, 2012
(as previously reported)
Effect of
Restatement
For the six months ended June 30, 2012
(As Restated)
Loss on change in fair value of warrant liability $ $ (89,667 ) $ (89,667 )
Net loss $ (309,828 ) $ (89,667 ) $ (399,495 )
Basic and diluted net loss per share $ (0.05 ) $ (0.01 ) $ (0.06 )

Selected condensed statement of cash flow information for the six months period ended June 30, 2012:

For the six months ended June 30, 2012
(as previously reported)
Effect of
Restatement
For the six months ended June 30, 2012
(As Restated)
Operating activities:
Net loss $ (309,828 ) $ (89,667 ) $ (399,495 )
Loss on change in fair value of warrant liability $ $ 89,667 $ 89,667