Proposed Business Combination

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

9. Proposed Business Combination

On March 12, 2015, the Company entered into the Merger Agreement. The Merger Agreement provides for the merger (the “Merger”) of Merger Sub with and into Del Taco, with Del Taco surviving the merger as a wholly-owned subsidiary of the Company (the “ Proposed Business Combination”).

In connection with the Proposed Business Combination, on March 20, 2015, Levy Epic Acquisition Company, LLC and Levy Epic Acquisition Company II, LLC (the “Levy Newco Parties”), both of which have the same manager as the Sponsor, purchased $91.2 million of Del Taco common stock from Del Taco and $28.8 million of Del Taco common stock from Del Taco stockholders (the “Step 1 Investment”). The net proceeds received by Del Taco from the Step 1 Investment, together with the net proceeds of additional senior indebtedness, were used to repay $111.2 million of subordinated indebtedness and certain other transaction expenses. In connection with the Step 1 Investment, all outstanding options of Del Taco were exercised and converted into common stock of Del Taco, all outstanding warrants of Del Taco were exchanged and converted into common stock of Del Taco and all outstanding restricted units of Del Taco were settled for common stock of Del Taco.

Pursuant to the Merger Agreement, upon the effectiveness of the Merger, all shares of Del Taco stock then outstanding will be converted into either (i) the right to receive cash and common stock of the Company (in the case of all Del Taco stockholders other than the Levy Newco Parties) or (ii) the right to receive only common stock of the Company (with the Levy Newco Parties having only the right to receive shares of common stock of the Company in exchange for their shares of Del Taco stock held prior to the Merger). The consideration payable with respect to outstanding shares of Del Taco stock pursuant to the Merger will be based on the same valuation of Del Taco as determined in connection with the Step 1 Investment, and any shares of common stock of the Company issued pursuant to the Merger will be valued at a price of $10 per share. In the Merger, the aggregate consideration to be paid to Del Taco stockholders will consist of (i) $95 million in cash (the “Cash Merger Consideration”) and (ii) 16,553,540 shares of the Company's common stock (“Stock Merger Consideration”), subject to adjustment in accordance with the terms of the Merger Agreement if the aggregate amount of cash available to pay the Cash Merger Consideration is less than $95 million. As part of the Proposed Business Combination, funds in the Trust Account will be used to reimburse certain expenses accrued by the Company.

At the closing of the Merger, a total of 1,906,219 Founder Shares will be transferred by the Sponsor to third party investors who funded the Step 1 Investment, excluding entities affiliated with Lawrence F. Levy, Steven C. Florsheim, Ari B. Levy, Levy Family Partners, the Steven Florsheim 2003 Investment Trust and the Ari Levy 2003 Investment Trust (the “Levy Family”).

Certain investors (collectively, the “Step 2 Co-Investors”) have separately agreed to purchase from the Company at the closing of the Merger an aggregate of 3,500,000 shares of the Company’s common stock at a purchase price of $10.00 per share (the “Step 2 Co-Investment”). The net proceeds from the Step 2 Co-Investment will be applied towards the Cash Merger Consideration.

For the three months ended March 31, 2015, the Company has incurred approximately $777,000 of costs directly related to the Proposed Business Combination. These costs are included in other general, administrative and transaction expenses on the accompanying statements of operations. During this period, the Company was reimbursed approximately $536,000 of costs directly related to the Proposed Business Combination.

The consummation of the transactions contemplated by the Merger Agreement is subject to a number of conditions set forth in the Merger Agreement including, among others, receipt of the requisite approval of the stockholders of the Company.