0001213900-17-011678.txt : 20171109 0001213900-17-011678.hdr.sgml : 20171109 20171109161642 ACCESSION NUMBER: 0001213900-17-011678 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 42 CONFORMED PERIOD OF REPORT: 20170930 FILED AS OF DATE: 20171109 DATE AS OF CHANGE: 20171109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Global Partner Acquisition Corp. CENTRAL INDEX KEY: 0001643953 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 474078206 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-37523 FILM NUMBER: 171191036 BUSINESS ADDRESS: STREET 1: 1 ROCKEFELLER PLAZA STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 646-756-2877 MAIL ADDRESS: STREET 1: 1 ROCKEFELLER PLAZA STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020 10-Q 1 f10q0917_globalpartner.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2017

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from  __________ to __________

 

Commission File Number: 001-37523

 

GLOBAL PARTNER ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   47-4078206

(State or other jurisdiction of

 incorporation or organization)

 

(I.R.S. Employer

 Identification Number)

 

10 Allison Lane

Thornwood, NY

  10594
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code:  (646) 756-2877

 

Not applicable

 (Former name or former address, if changed since last report) 

 

 

 

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.  Yes ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   Accelerated filer
Non-accelerated filer (Do not check if a smaller reporting company)   Smaller reporting company
      Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☒ No ☐

 

As of November 7, 2017, there were 15,989,770 shares of the Company’s common stock issued and outstanding. 

 

 

 

 

 

 

GLOBAL PARTNER ACQUISITION CORP.

 

Table of Contents

 

  Page
PART I – FINANCIAL INFORMATION  
     
Item 1. Financial Statements  
     
  Condensed Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016 1
     
  Condensed Statements of Operations for the three and nine months ended September 30, 2017 and 2016 (unaudited) 2
     
  Condensed Statement of Stockholders’ Equity for the nine months ended September 30, 2017 (unaudited) 3
     
  Condensed Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 (unaudited) 4
     
  Notes to Unaudited Condensed Financial Statements 5
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
     
Item 4. Controls and Procedures 19
     
PART II – OTHER INFORMATION    
     
Item 1. Legal Proceedings 20
     
Item 1A. Risk Factors 20
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
     
Item 3. Defaults Upon Senior Securities 20
     
Item 4. Mine Safety Disclosures 20
     
Item 5. Other Information 20
     
Item 6. Exhibits 20
     
Signatures 21

 

 

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

GLOBAL PARTNER ACQUISITION CORP.

CONDENSED BALANCE SHEETS

 

    September 30,    December 31, 
   2017   2016 
ASSETS  (unaudited)  
Current assets –        
Cash  $374,000   $237,000 
Prepaid expenses   19,000    41,000 
Total current assets   393,000    278,000 
Non-current assets –          
Cash and investments held in Trust Account   121,749,000    155,543,000 
Total assets  $122,142,000   $155,821,000 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities –          
Accounts payable  $522,000   $199,000 
Accrued liabilities   289,000    1,614,000 
Accrued taxes   204,000    62,000 
Total current liabilities   1,015,000    1,875,000 
           
Other liabilities –          
Deferred underwriting commission   4,000,000    4,658,000 
Total liabilities   5,015,000    6,533,000 
           
Common stock subject to possible redemption; 11,212,713 shares and 14,428,805 shares, respectively, at September 30, 2017 and December 31, 2016 (at redemption value of approximately $10.00 per share)   112,127,000    144,288,000 
           
Commitments and contingencies          
           
Stockholders’ equity:          
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, none issued or outstanding   -    - 
Common stock, $0.0001 par value, 35,000,000 shares authorized, 4,777,057 shares and 4,977,445 shares, respectively, issued and outstanding (excluding 11,212,713 and 14,428,805 shares, respectively, subject to possible redemption) at September 30, 2017 and December 31, 2016   -    - 
Additional paid-in-capital   6,179,000    7,630,000 
Accumulated deficit   (1,179,000)   (2,630,000)
Total stockholders’ equity   5,000,000    5,000,000 
Total liabilities and stockholders’ equity  $122,142,000   $155,821,000 

 

See accompanying notes to the unaudited condensed financial statements.

 

 1 

 

 

GLOBAL PARTNER ACQUISITION CORP.

 

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

 

   For the three months
ended
September 30,
   For the nine months
ended
September 30,
 
   2017   2016   2017   2016 
                 
Revenues  $-   $-   $-   $- 
General and administrative expenses   937,000    227,000    1,421,000    486,000 
Loss from operations   (937,000)   (227,000)   (1,421,000)   (486,000)
Other income (expense)                    
Transaction fee income   2,500,000    -    2,500,000    - 
Interest income on Trust Account   294,000    93,000    735,000    258,000 
Interest expense on Notes payable – related party   (17,000)   -    (57,000)   - 
Total other income   2,777,000    -    3,178,000    - 
Income (loss) before income tax   1,840,000    (134,000)   1,757,000    (228,000)
Provision for income tax   (130,000)   -    (306,000)   - 
Net income (loss) attributable to common stock  $1,710,000   $(134,000)  $1,451,000   $(228,000)
Weighted average common shares outstanding:                    
Basic and diluted   4,988,000    4,763,000    4,995,000    4,754,000 
Diluted   15,990,000    4,763,000    18,263,000    4,754,000 
Net Income (loss) per common share:                    
Basic  $0.34   $(0.03)  $0.29   $(0.05)
Diluted  $0.11   $(0.03)  $0.08   $(0.05)

  

See accompanying notes to the unaudited condensed financial statements.

 

 2 

 

 

GLOBAL PARTNER ACQUISITION CORP.


CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY

For the nine months ended September 30, 2017

(unaudited)

 

               Additional    
   Common Stock   Paid-in   Accumulated   Stockholders’ 
   Shares   Amount   Capital   Deficit   Equity 
Balances, December 31, 2016   4,977,445   $-   $7,630,000   $(2,630,000)  $5,000,000 
Reduction of deferred underwriting commissions   -                 -    658,000        -    658,000 
Change in proceeds subject to possible redemption(1)   (200,388)   -    (2,109,000)   -    (2,109,000)
Net income   -    -    -     1,451,000    1,451,000 
Balances, September 30, 2017   4,777,057   $-   $6,179,000   $(1,179,000)  $5,000,000 

 

(1)Includes the effect of the redemption of 3,416,480 public shares into a pro rata portion of the Trust Account on August 3, 2017 (see Notes 5 and 6).

 

See accompanying notes to the unaudited condensed financial statements.

 

 3 

 

 

GLOBAL PARTNER ACQUISITION CORP.


CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

  

   For the nine months ended 
   September 30, 
   2017   2016 
Cash flows from operating activities:        
Net income (loss)  $1,451,000   $(228,000)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:          
Decrease in prepaid expenses   22,000    59,000 
Increase (decrease) in accounts payable, accrued liabilities and accrued taxes, net   (860,000)   (47,000)
Trust income retained in Trust Account   (476,000)   (187,000)
Net cash provided by (used) in operating activities   137,000    (403,000)
           
Cash flows from investing activities:          
Withdrawal from Trust Account upon redemption of 3,416,480 public shares   34,165,000    - 
           
Cash flows from financing activities:          
Proceeds from notes payable – related party   1,200,000    - 
Payment of notes payable – related party   (1,200,000)   - 
Redemption of common stock   (34,165,000)   - 
Net cash used in financing activities   (34,165,000)   - 
           
Net increase (decrease) in cash   137,000    (403,000)
Cash at beginning of period   237,000    1,048,000 
Cash at end of period  $374,000   $645,000 
           
Supplemental disclosure of noncash investing and financing activities:          
Reduction of deferred underwriting commissions  $658,000   $- 

 

See accompanying notes to the unaudited condensed financial statements.

 4 

 

 

 

 

GLOBAL PARTNER ACQUISITION CORP.
Notes to Unaudited Condensed Financial Statements

 

NOTE 1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

 

Organization and General:

 

Global Partner Acquisition Corp. (the “Company”) was incorporated in Delaware on May 19, 2015. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

 

At September 30, 2017, the Company had not commenced any operations. All activity for the period from May 19, 2015 (inception) through September 30, 2017 relates to the Company’s formation and the initial public offering (“Public Offering”) described below and, subsequent to the Public Offering, locating and completing a suitable Business Combination. The Company has not and will not generate any operating revenues until after completion of the Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on cash from the proceeds of the Public Offering and a concurrent private placement.

 

Sponsor and Financing:

 

The Company’s sponsor is Global Partner Sponsor I LLC, a Delaware limited liability corporation (the “Sponsor” or the “initial stockholder”). The registration statement for the Public Offering (as described in Note 3) was declared effective by the United States Securities and Exchange Commission (the “SEC”) on July 29, 2015. The Company intends to finance an Initial Business Combination with proceeds from $155,250,000 of gross proceeds from the Public Offering, including the underwriters’ exercise of the over-allotment option in full (as described in Note 3) and approximately $6,408,000 of gross proceeds from a concurrent private placement (Note 3). Upon the closing of the Public Offering and the private placement, $155,250,000 was deposited in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”) as discussed below. See below as well as Notes 4, 5 and6 regarding redemptions of common stock and the release of a portion of the funds from the Trust Account in connection with stockholder approval, in August 2017, to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company must complete its Initial Business Combination.

 

The Trust Account:

 

The funds in the Trust Account may be invested only in U.S. government treasury bills with a maturity of one hundred and eighty (180) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds of the Public Offering outside the Trust Account may be used to pay for business, legal and accounting due diligence expenses for prospective acquisition targets and continuing general and administrative expenses.

 

The Company’s amended and restated certificate of incorporation originally provided that, other than the withdrawal of interest to pay taxes, if any, none of the funds held in the Trust Account will be released until the earlier of: (i) the completion of the Initial Business Combination; or (ii) the redemption of 100% of the shares of common stock included in the Units (as defined below) sold in the Public Offering if the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Public Offering (subject to the requirements of law).

 

However, on August 3, 2017, the stockholders of the Company approved an amendment to the Company’s amended and restated certificate of incorporation to extend the date on which the Company must liquidate the Trust Account if the Company has not completed an initial business combination, from August 4, 2017 to November 6, 2017 (or February 5, 2018 if the Company has executed a definitive agreement for an initial business combination by November 6, 2017), and to permit the withdrawal of funds from the Trust Account to pay stockholders who properly exercise their redemption rights in connection with the extension. Stockholders representing 3,416,480 shares elected to redeem their shares as further discussed in Notes 5 and 6. As discussed further in Note 8, on November 2, 2017, the Company entered into a definitive agreement for an Initial Business Combination, thereby extending the date to complete an Initial Business Combination to February 5, 2018.

 

 5 

 

 

Initial Business Combination:

 

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 an Initial Business Combination with a Target Business. As used herein, a “Target Business” is one or more businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the Company signing a definitive agreement in connection with the Initial Business Combination. There is no assurance that the Company will be able to successfully effect an Initial Business Combination.

 

The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to have their shares redeemed by the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to redeem their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval unless a vote is required by NASDAQ rules. If the Company seeks stockholder approval, it will complete its Initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination. However, in no event will the Company redeem its Public Shares (as defined below) in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its Public Shares and the related Initial Business Combination.

 

If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. As a result, such shares of common stock are recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with Financial Accounting Standards, Board (“FASB”) Accounting Standards Update (“ASC”) 480, “Distinguishing Liabilities from Equity.”

 

On August 3, 2017, the Company’s stockholders agreed to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an Initial Business Combination from August 4, 2017 to February 5, 2018 or such earlier date as determined by the Board of Directors of the Company. Under the Extension Amendment, public stockholders had the right to redeem their pro rata portion of the funds in the Trust Account and stockholders representing 3,416,480 shares elected to redeem their shares as further discussed in Notes 4 and 5. See Liquidation and Going Concern below.

 

Liquidation and Going Concern:

 

As noted in Initial Business Combination above, the Company will have until February 5, 2018 to complete an Initial Business Combination. If the Company does not complete an Initial Business Combination by that date, the Company will (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest, but less taxes payable (less up to $50,000 of such net interest to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its creditors and remaining stockholders, as part of its plan of dissolution and liquidation. The initial stockholders have entered into letter agreements with the Company, pursuant to which they have waived their rights to participate in any redemption with respect to their initial shares; however, if the Sponsor or any of the Company’s officers, directors or affiliates acquire shares of common stock in or after the Public Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not complete the Initial Business Combination within the required time period.

 

 6 

 

 

This mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern at September 30, 2017. No adjustments have been made to the carrying amounts of assets or liabilities as of such date should the Company be required to liquidate after February 5, 2018.

 

In the event of liquidation, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Public Offering.

 

At September 30, 2017, the Company had current liabilities of approximately $1,015,000 and negative working capital of approximately $622,000. Of these amounts, approximately $204,000 represents accrued taxes (which can be paid with interest earned from the Trust Account), approximately $20,000 represents unpaid administrative fees payable to our Sponsor and approximately $791,000 largely represents amounts owed to professionals, consultants, advisors and others for their services. Funds in the Trust Account are not generally available to pay professionals, consultants, advisors and others absent an Initial Business Combination and the majority of such parties have agreed to waive any claims against the Trust Account. The Company believes that such professionals, consultants, advisors and others will continue assisting the Company with completing the Initial Business Combination and, excluding our independent registered public accounting firm, defer a portion of their fees until such completion or on a contingency basis. Subsequent to September 30, 2017, on November 2, 2017, the Company drew $600,000 under a Sponsor note executed on November 1, 2017. Further, the Company continues to generate interest income that is available to pay taxes. As such, the Company believes that it has sufficient working capital at September 30, 2017 (assuming the subsequent receipt of the additional funding from the Sponsor which is not currently in place) to fund its operations until completion of its Initial Business Combination or, if necessary, through February 5, 2018.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation:

 

The accompanying interim unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”), and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2017 and December 31, 2016, and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.

 

The accompanying unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC. All dollar amounts are rounded to the nearest thousand dollars.

 

Emerging Growth Company:

 

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.

 

 7 

 

 

Net Income (Loss) Per Common Share:

 

The Company complies with the accounting and disclosure requirements in ASC Topic 260, “Earnings Per Share.” Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Shares of common stock subject to possible redemption at September 30, 2017 have been excluded from the calculation of basic income per share for the three and nine months ended September 30, 2017 since such shares, if redeemed, only participate in their pro rata share of the Trust Account. The Company has not considered the effect of warrants sold in the Public Offering and the concurrent private placement to purchase 14,170,000 shares of common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events.

 

Concentration of Credit Risk:

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

 

Financial Instruments:

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the financial statements.

 

Use of Estimates:

 

The preparation of financial statements in conformity with GAAP requires the Company’s 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. Actual results could differ from those estimates.

 

Income Taxes:

 

The Company follows the asset and liability method of accounting for income taxes under FASB ASC, 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. At September 30, 2017 and December 31, 2016, the Company has a deferred tax asset of approximately $450,000 and $225,000, respectively, primarily related to start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is appropriate at this time.

 

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2017 or December 31, 2016. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2017 or December 31, 2016. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

 

Redeemable Common Stock:

 

All of the 15,525,000 common shares sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of common shares under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with FASB ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of an entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001.

 

 8 

 

 

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital.

 

On August 3, 2017, in connection with stockholder approval of an amendment to the Company’s amended and restated certificate of incorporation, stockholders representing 3,416,480 shares elected to redeem their shares as discussed further in Notes 5 and 6.

 

Accordingly, at September 30, 2017 and December 31, 2016, 11,212,713 and 14,428,805, respectively, of the 15,525,000 Public Shares were classified outside of permanent equity at their redemption value.

 

Recent Accounting Pronouncements:

 

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

 

NOTE 3 – PUBLIC OFFERING

 

On August 4, 2015, the Company closed the Public Offering for the sale of 15,525,000 Units at a price of $10.00 per unit (the “Units”), including the full exercise of the underwriters’ over-allotment option yielding gross proceeds of $155,250,000. Each Unit consists of one share of the Company’s common stock, $0.0001 par value and one redeemable common stock purchase warrant (the “Warrants”). Each Warrant entitles the holder to purchase one-half of one share of common stock at a price of $5.75. No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Each Warrant will become exercisable on the later of 30 days after the completion of the Initial Business Combination or 12 months from the closing of the Public Offering and will expire five years after the completion of the Initial Business Combination or earlier upon redemption or liquidation. However, if the Company does not complete the Initial Business Combination on or prior to February 5, 2018, the Warrants will expire. The Company has agreed to use its best efforts following the completion of the Initial Business Combination to file a new registration statement under the Securities Act, to cover the shares of common stock issuable upon the exercise of the warrants. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of the Warrants issued as part of the 15,525,000 Units during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they are exercised on a cashless basis in the circumstances described in the warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $24.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.

 

The Company paid an underwriting discount of 3% of the gross proceeds of the Public Offering to the underwriters at the closing of the Public Offering (approximately $4,658,000), with an additional fee (the “Deferred Discount”) of 3% of the gross proceeds payable upon the Company’s completion of the Initial Business Combination. In July 2017, the Company reached an agreement with the underwriters to reduce the Deferred Discount from $4,657,500 to $4,000,000. The reduction was recorded as an addition to additional paid in capital in the three and nine months ended September 30, 2017. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes the Initial Business Combination.

 

In addition, on August 4, 2015, the Sponsor paid the Company approximately $6,408,000 in a private placement for the purchase of 12,815,000 warrants at a price of $0.50 per warrant (the “Private Placement Warrants”) - see also Note 4.

 

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NOTE 4 – RELATED PARTY TRANSACTIONS

 

Founder Shares:

 

In May 2015, the Sponsor purchased 3,881,250 shares of common stock (the “Founder Shares”) for $25,000, or approximately $0.006 per share. The Founder Shares are identical to the common stock included in the Units sold in the Public Offering except that the Founder Shares are subject to certain transfer restrictions as described in more detail below. The Sponsor agreed to forfeit up to 506,250 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters so that the initial stockholder would own 20.0% of the Company’s issued and outstanding shares after the Public Offering. As described above, the underwriters exercised their over-allotment option in full and therefore none of the Founder Shares were forfeited.

 

The Company’s initial stockholder has agreed not to transfer, assign or sell any of its Founder Shares until the earlier of (A) one year after the completion of the Initial Business Combination, or earlier if, subsequent to the Initial Business Combination, the last sale price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the Initial Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

 

Private Placement Warrants;

 

Upon the closing of the Public Offering on August 4, 2015, the Sponsor paid the Company approximately $6,408,000 in a private placement for the purchase of 12,815,000 warrants (including warrants in connection with the exercise of the over-allotment option) at a price of $0.50 per warrant (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase one-half of one share of common stock at $5.75 per share. The purchase price of the Private Placement Warrants was added to the proceeds from the Public Offering held in the Trust Account pending completion of the Initial Business Combination. The Private Placement Warrants (including the common stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Initial Business Combination and they are non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the warrants included in the Units sold in the Public Offering. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Warrants sold as part of the Units in the Public Offering and have no net cash settlement provisions.

 

If the Company does not complete an Initial Business Combination, then the proceeds from the Private Placement Warrants will be part of the liquidating distribution to the public stockholders and the Private Placement Warrants will expire worthless.

 

Registration Rights:

 

The Company’s initial stockholder and holders of the Private Placement Warrants are entitled to registration rights pursuant to a registration rights agreement entered into in connection with the Public Offering in July 2015. The Company’s initial stockholder and holders of the Private Placement Warrants are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders have “piggy-back” registration rights to include their securities in other registration statements filed by the Company. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Related Party Loans:

 

On January 12, 2017, the Company issued a promissory note to the Sponsor. The note permitted the Company to borrow money from time to time from the Sponsor in an aggregate principal amount of up to $1,200,000 with an interest rate of 7.5% per annum. During January 2017, the Company borrowed $1,200,000 under the note. The Company used the proceeds from such borrowings for ongoing operational expenses and certain other expenses in connection with the Company’s Initial Business Combination. The note was repaid, together with approximately $57,000 of accrued interest, on September 5, 2017 (see Note 7).

 

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Administrative Services Agreement:

 

The Company has agreed to pay $10,000 a month for office space, utilities and administrative support to the Sponsor. Services commenced on July 29, 2015, the date the securities were first listed on the NASDAQ Capital Market, and will terminate upon the earlier of the consummation by the Company of the Initial Business Combination or the liquidation of the Company. Administrative services charges earned but not paid under the agreement aggregating $20,000 are included in accrued liabilities at September 30, 2017.

 

NOTE 5 - TRUST ACCOUNT AND FAIR VALUE MEASUREMENT

 

The Company complies with FASB ASC 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

 

Upon the closing of the Public Offering and the private placement, a total of $155,250,000 was deposited into the Trust Account. All proceeds in the Trust Account may be invested in either U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, and that invest solely in U.S. government treasury obligations.

 

At September 30, 2017 and December 31, 2016, the proceeds of the Trust Account were invested primarily in U.S. government treasury bills. The U.S. government treasury bills held at December 31, 2016 matured in March 2017 and the U. S. government treasury bills held at September 30, 2017 matured in October 2017. The Company classifies its U.S. government treasury bills and equivalent securities as held-to-maturity in accordance with FASB ASC 320 “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheet at September 30, 2017 and December 31, 2016 and adjusted for the amortization or accretion of premiums or discounts. Approximately $66,000 and $1,000, respectively, of the balance in the Trust Account was held in cash at September 30, 2017 and December 31, 2016. During the nine months ended September 30, 2017 and 2016, approximately $260,000 and $70,000, respectively, was released from the Trust Account to the Company to pay taxes.

 

The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In addition, the table presents the carrying value under FASB ASC 320. Since all of the Company’s permitted investments consist of U.S. government treasury bills and cash, fair values of its investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities as follows:

 

   Carrying   Gross   Quoted
Prices in
 
   Value at   Unrealized   Active 
Description  September 30,
2017
   Holding
Gain
   Markets
(Level 1)
 
Assets:            
U.S. Government            
Treasury Bills  $121,683,000   $10,000   $121,693,000 
Cash   66,000    -    66,000 
Total  $121,749,000   $10,000   $121,759,000 

 

   Carrying   Gross   Quoted Prices in 
   Value at   Unrealized   Active 
Description  December 31,
2016
   Holding
Loss
   Markets
(Level 1)
 
Assets            
U.S. Government            
Treasury Bills  $155,542,000   $(15,000)  $155,527,000 
Cash   1,000    -    1,000 
Total  $155,543,000   $(15,000)  $155,528,000 

 

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On August 3, 2017, in connection with stockholder approval of the Company’s Amended and Restated Certificate of Incorporation, stockholders representing 3,416,480 shares elected to redeem their shares for a pro rata share of the amount in the Trust Account resulting in approximately $34,269,000 removed from the Trust Account in connection with such redemptions at a redemption value of approximately $10.03 per share.

 

At September 30, 2017, such redemption amount per share was approximately $10.04.

 

NOTE 6 – STOCKHOLDERS’ EQUITY

 

Common Stock:

 

The Company is authorized to issue 35,000,000 shares of common stock. The Company will likely (depending on the terms of the Initial Business Combination) be required to increase the number of shares of common stock which it is authorized to issue at the same time as its stockholders vote on the Initial Business Combination to the extent the Company seeks stockholder approval in connection with the Initial Business Combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock they own. At September 30, 2017 and December 31, 2016, there were 15,989,770 and 19,406,250, respectively, shares of common stock issued and outstanding. At September 30, 2017 and December 31, 2016, 11,212,713 and 14,428,805, respectively, of the outstanding shares were subject to redemption.

 

As discussed further in Note 5, on August 3, 2017, shareholders representing 3,416,480 shares elected to redeem their shares which reduced the number of outstanding shares from 19,406,250 to 15,989,770.

 

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. At September 30, 2017 and December 31, 2016, there were no shares of preferred stock issued and outstanding.

 

NOTE 7 – TERMINATION OF PROPOSED BUSINESS COMBINATION WITH SEQUEL AND RELATED TRANSACTION FEE INCOME

 

On January 11, 2017, the Company entered into an Agreement and Plan of Merger (the “Sequel Merger Agreement”), by and among the Company, Sequel Acquisition, LLC (the “MergerSub”), a wholly-owned subsidiary of the Company, Sequel Youth and Family Services, LLC (“Sequel”) and other parties named thereto. Pursuant to the Sequel Merger Agreement, the Company agreed to acquire the Sequel business through an equity purchase and a merger of MergerSub with and into Sequel, with Sequel being the survivor in the merger (the “Sequel Business Combination”). On May 19, 2017, the Company received notice from Sequel that Sequel terminated the Sequel Merger Agreement since the transactions contemplated by the Sequel Merger Agreement were not completed on or prior to May 15, 2017 as required.

 

On September 1, 2017, the Company received a $2,500,000 fee for releasing a third party from a non-circumvention agreement with the Company relating to the Sequel Business Combination. In connection with the receipt of this payment by the Company, the Company paid down approximately $2,250,000 of accrued liabilities relating to the Sequel Business Combination, including the principal amount of the Sponsor Note of $1,200,000 together with approximately $57,000 of accrued interest.

 

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NOTE 8 – SUBSEQUENT EVENTS

 

Entry into Merger Agreement for Business Combination

 

On November 2, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, PRPL Acquisition, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub”), Purple Innovation, LLC, a Delaware limited liability company (“Purple”), InnoHold, LLC, a Delaware limited liability company and the sole equity holder of Purple (“InnoHold”), and the Sponsor, solely in its capacity thereunder as the representative of the Company after the consummation of the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, the Company agreed to acquire Purple’s business through a merger of Merger Sub with and into Purple, with Purple being the survivor in the merger (the “Business Combination,” and together with the other transactions contemplated by the Merger Agreement and the agreements attached thereto, the “Transactions”). The Merger Agreement and the Transactions were unanimously approved by the board of directors of the Company.

 

Purple is a comfort technology company with products aimed at improving how people sleep, sit and stand. Purple currently offers mattress, bedding and cushioning products through direct-to-consumer and retail channels. Purple is based in Alpine, UT, was organized as a Delaware limited liability company in 2010 and changed its name to Purple Innovation, LLC in January 2017. Additional information regarding Purple, the Business Combination and the Transactions is available in the Form 8-K filed by the Company on November 3, 2017 and the preliminary proxy statement filed by the Company on November 6, 2017.

 

Second Sponsor Note

 

Subsequent to September 30, 2017, on November 1, 2017, the Company executed the Second Sponsor Note for up to $1,000,000 to cover certain Business Combination fees and expenses. The Second Sponsor Note does not bear interest and can be drawn down in any amount upon five business days' notice to the Sponsor. On November 2, 2017, the Company drew $600,000 under the Second Sponsor Note. Under the Second Sponsor Note, the Company has the option to convert any unpaid balance into shares of common stock based on a share price of $10.00 per share. The Sponsor is also entitled to receive a capital commitment fee in the amount of $50,000 in consideration of its agreement to commit to make the loan to the Company. The Second Sponsor Note is repayable in full upon the earliest to occur of: (i) the consummation of the Business Combination, (ii) February 28, 2018 and (iii) the date that the winding up of the Company is effective.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes thereto contained elsewhere in this report. References to the “Company,” “us” or “we” refer to Global Partner Acquisition Corp.

 

Special Note Regarding Forward-Looking Statements

 

All statements other than statements of historical fact included in this section and other parts of this Form 10-Q regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.

 

Overview

 

We are a blank check company incorporated on May 19, 2015 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). We intend to effectuate the Business Combination using cash from the proceeds of a public offering (the “Public Offering”) that closed on August 4, 2015 and a sale of warrants in a private placement that occurred simultaneously with the completion of the Public Offering (the “Private Placement Warrants”), our capital stock, debt or a combination of cash, stock and debt.

 

The issuance of additional shares of our stock in a Business Combination:

 

may significantly dilute the equity interest of our stockholders;
   
may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to our common stock;
   
could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carryforwards, if any, and could result in the resignation or removal of our present officers and directors;
   
may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and
   
may result in a decrease in the prevailing market prices for our common stock and/or warrants.

 

Similarly, if we issue debt securities, it could result in:

 

a decrease in the prevailing market prices for our common stock and/or warrants.
   
default and foreclosure on our assets if our operating revenues after a Business combination are insufficient to repay our debt obligations;
   
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
   
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
   
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
   
our inability to pay dividends on our common stock;
   
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 

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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
   
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
   
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

 

On January 11, 2017, the Company entered into an Agreement and Plan of Merger (the “Sequel Merger Agreement”), by and among the Company, Sequel Acquisition, LLC (the “MergerSub”), a wholly-owned subsidiary of the Company, Sequel Youth and Family Services, LLC (“Sequel”) and other parties named thereto. Pursuant to the Sequel Merger Agreement, the Company agreed to acquire the Sequel business through an equity purchase and a merger of MergerSub with and into Sequel, with Sequel being the survivor in the merger (the “Sequel Business Combination”). On May 19, 2017, the Company received notice from Sequel that Sequel terminated the Sequel Merger Agreement since the transactions contemplated by the Sequel Merger Agreement were not completed on or prior to May 15, 2017 as required.

 

On September 1, 2017, the Company received a $2,500,000 fee for releasing a third party from a non-circumvention agreement with the Company relating to the Sequel Business Combination. In connection with the receipt of this payment by the Company, the Company paid down approximately $2,250,000 of accrued liabilities relating to the Sequel Business Combination, including the principal amount of the Sponsor Note of $1,200,000 together with approximately $57,000 of accrued interest.

 

On August 3, 2017, the Company’s stockholders agreed to amend the Company’s amended and restated certificate of incorporation pursuant to an “Extension Amendment,” to extend the date by which the Company must (i) consummate a Business Combination, (ii) cease its operations if it fails to complete such Business Combination, and (iii) redeem or repurchase 100% of the Company’s common stock included as part of the units sold in the Company’s initial public offering that was consummated on August 4, 2015 from August 4, 2017 to November 6, 2017 (or February 5, 2018 if the Company has executed a definitive agreement for a business combination by November 6, 2017) or such earlier date as determined by the Board. Under the Extension Amendment, public stockholders will have the right to redeem their pro rata portion of the funds in the Trust Account.

 

On November 2, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, PRPL Acquisition, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub”), Purple Innovation, LLC, a Delaware limited liability company (“Purple”), InnoHold, LLC, a Delaware limited liability company and the sole equity holder of Purple (“InnoHold”), and the Sponsor, solely in its capacity thereunder as the representative of the Parent after the consummation of the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, the Company agreed to acquire Purple’s business through a merger of Merger Sub with and into Purple, with Purple being the survivor in the merger (the “Business Combination,” and together with the other transactions contemplated by the Merger Agreement and the agreements attached thereto, the “Transactions”). The Merger Agreement and the Transactions were unanimously approved by the board of directors of the Company.

 

Purple is a comfort technology company with products aimed at improving how people sleep, sit and stand. Purple currently offers mattress, bedding and cushioning products through direct-to-consumer and retail channels. Purple is based in Alpine, UT, was organized as a Delaware limited liability company in 2010 and changed its name to Purple Innovation, LLC in January 2017. Additional information regarding Purple, the Business Combination and the Transactions is available in the Form 8-K that was filed by the Company on November 3, 2017 and the preliminary proxy statement filed by the Company on November 6, 2017.

 

As a result of entering into the Merger Agreement, the Company will have until February 5, 2018 to complete the Business Combination. However, there can be no assurances that the Company will complete the Business Combination. See “Risk Factors” in our Annual Report on Form 10-K filed on March 14, 2017 and Part II Other Information, Item 1A Risk Factors and in the preliminary proxy statement filed by the Company on November 6, 2017.

 

As indicated in the accompanying financial statements, at September 30, 2017, we had approximately $374,000 in cash. We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our Business Combination will be successful.

 

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Results of Operations

 

For the period from May 19, 2015 (inception) through September 30, 2017 our activities consisted of formation and preparation for the Public Offering and, subsequent to the Public Offering, locating and completing a suitable Business Combination. Our operating costs for the three months ended September 30, 2017 and 2016 were approximately $937,000 and $227,000, respectively, and are largely associated with our governance and public reporting, insurance, as well as state franchise taxes of approximately $25,000 and $25,000, respectively, and charges of $10,000 per month from our Sponsor for administrative services as well as, in the three and nine months ended September 30, 2017, approximately $700,000 of costs associated with the potential initial business combination and extension. Our operating costs for the nine months ended September 30, 2017 and 2016 were approximately $1,421,000 and $486,000, respectively, and are largely associated with our governance and public reporting, insurance, as well as state franchise taxes of approximately $75,000 and $75,000, respectively, and charges of $10,000 per month from our Sponsor for administrative services as well as, in the nine months ended September 30, 2017, approximately $900,000 of costs associated with the extension agreement, the Sequel Business Combination and the Business Combination. Interest income earned on our U.S. government treasury bills totaled approximately $294,000 and $735,000 during the three and nine months ended September 30, 2017, respectively, and approximately $93,000 and $258,000 during the three and nine months ended September 30, 2016. The increase in interest income in the three and nine months ended September 30, 2017, despite a reduction in the funds in the Trust Account due to redemptions in August 2017, results from the higher yields on U.S. government treasury bills compared to the three and nine months ended September 30, 2016.

 

During the three and nine months ended September 30, 2017 the Company received a $2,500,000 fee for releasing a third party from a non-circumvention agreement with the Company relating to the Sequel Business Combination. In connection with the receipt of this payment by the Company, the Company paid down approximately $2,250,000 of accrued liabilities relating to that business combination, including the Sponsor Note for $1,200,000 together with approximately $57,000 of accrued interest

 

The provision for income taxes for the three and nine months ended September 30, 2017 reflects the federal income taxes on income from the Trust Account, net of expenses that are currently deductible.

 

Liquidity and Capital Resources

 

On August 4, 2015, we consummated the Public Offering of an aggregate of 15,525,000 units (including the full exercise of the underwriters’ over-allotment option) at a price of $10.00 per unit generating gross proceeds of approximately $155,250,000 before underwriting discounts and expenses. Simultaneously with the consummation of the Public Offering, we consummated the private placement of 12,815,000 Private Placement Warrants, each exercisable to purchase one-half of one share of our common stock at $5.75 per half share ($11.50 per whole share), to the Sponsor, at a price of $0.50 per Private Placement Warrant, generating gross proceeds, before expenses, of approximately $6,408,000. We received net proceeds from the Public Offering and the sale of the Private Placement Warrants of approximately $156,550,000, net of the non-deferred portion of the underwriting commissions of $4,658,000 and offering costs and other expenses of approximately $450,000. $155,250,000 of the proceeds from the Public Offering and the concurrent private placement were deposited into the Trust Account and are not available to us for operations (other than amounts identified for payment of taxes).

 

Until the consummation of the Public Offering, the Company’s only sources of liquidity were the initial purchase of Founder Shares for $25,000 by the Sponsor, and a total of $225,000 loaned by the Sponsor against the issuance of an unsecured promissory note. These loans were non-interest bearing and were paid in full on August 4, 2015 in connection with the closing of the Public Offering.

 

On January 12, 2017, the Company issued a promissory note to the Sponsor (the “Sponsor Note”). The note permitted the Company to borrow money from time to time from the Sponsor in an aggregate principal amount of up to $1,200,000 with an interest rate of 7.5% per annum. During January 2017, the Company borrowed $1,200,000 under the note. The Company used the proceeds from such borrowings for ongoing operational expenses and certain other expenses in connection with the Company’s Initial Business Combination. The note was repaid, together with approximately $57,000 of accrued interest, on September 5, 2017.

 

On September 1, 2017, the Company received a $2,500,000 fee in exchange for releasing a third party from a non-circumvention agreement with the Company relating to the Sequel Business Combination. In connection with the receipt of this payment by the Company, the Company paid down approximately $2,250,000 of accrued liabilities relating to that business combination, including the Sponsor Note for $1,200,000 together with approximately $57,000 of accrued interest.

 

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During the nine months ended September 30, 2017, approximately $137,000 of cash was provided from operations and we drew down, and then paid off, $1,200,000 under the Sponsor Note. At September 30, 2017, we had approximately $374,000 of cash available outside of the Trust Account to fund our search for a Business Combination. We have had discussions with members of our Sponsor about providing up to $1.0 million of additional financing in the form of loans or advances to fund expenses incurred in connection with the consummation of an Initial Business Combination, but there are no agreements for such financing currently in place. We believe that we will have sufficient resources, assuming receipt of the additional financing from our Sponsor, which is not currently in place, to fund our operations and our search for a Business Combination through the period that ends with our liquidation. 

 

Subsequent to September 30, 2017, on November 1, 2017, the Company executed the Second Sponsor Note for up to $1,000,000 to cover certain Business Combination fees and expenses. The Second Sponsor Note does not bear interest and can be drawn down in any amount upon five business days' notice to the Sponsor. On November 2, 2017, the Company drew $600,000 under the Second Sponsor Note. Under the Second Sponsor Note, the Company has the option to convert any unpaid balance into shares of common stock based on a share price of $10.00 per share. The Sponsor is also entitled to receive a capital commitment fee in the amount of $50,000 in consideration of its agreement to commit to make the loan to the Company. The Second Sponsor Note is repayable in full upon the earliest to occur of: (i) the consummation of the Business Combination, (ii) February 28, 2018 and (iii) the date that the winding up of the Company is effective.

 

Off-balance sheet financing arrangements

 

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

 

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial assets.

 

Contractual obligations

 

At September 30, 2017, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. In connection with the Public Offering, in July 2015 we entered into an Administrative Services Agreement with our Sponsor, pursuant to which the Company pays $10,000 per month for office space, utilities and administrative support. At September 30, 2017, the condensed balance sheet includes $20,000 of fees accrued but not paid under the Administrative Services Agreement. Upon the earlier of the completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying the monthly fee.

 

Critical Accounting Policies

 

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. The Company has identified the following as its critical accounting policies:

 

Emerging Growth Company

 

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

 

 17 

 

 

Net Income (Loss) Per Common Share

 

The Company complies with the accounting and disclosure requirements in ASC Topic 260, “Earnings Per Share.” Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Shares of common stock subject to possible redemption at September 30, 2017 have been excluded from the calculation of basic income per share for the three and nine months ended September 30, 2017 since such shares, if redeemed, only participate in their pro rata share of the Trust Account. The Company has not considered the effect of warrants sold in the Public Offering and the concurrent private placement to purchase 14,170,000 shares of common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events.

 

Financial Instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying unaudited condensed balance sheets.

 

Income Taxes

 

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. At September 30, 2017 and December 31, 2016, the Company has a deferred tax asset of approximately $450,000 and $225,000, respectively, related to net operating loss carryforwards (which begin to expire in 2035) and start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is appropriate at this time.

 

Redeemable Common Stock

 

All of the shares of common stock sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of such common stock under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with FASB ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the Company does not specify a maximum redemption threshold, its amended and restated certificate of incorporation provides that in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001.

 

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the security to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital.

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

 

 18 

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We were incorporated in Delaware on May 19, 2015 for the purpose of effecting a Business Combination. As of September 30, 2017, we had not commenced any operations or generated any revenues. All activity through September 30, 2017 relates to our formation and our Public Offering and subsequent to that, locating and completing a suitable Business Combination. Subsequent to the Public Offering, $155,250,000 of the net proceeds of the Public Offering and the private placement that closed on August 4, 2015 were deposited into a Trust Account that invests solely in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U. S. government obligations. At September 30, 2017, the Trust Account is invested primarily in U.S. government treasury bills. Therefore, we do not believe there is currently a material interest rate risk. On August 3, 2017, in connection with stockholder approval of the Company’s Amended and Restated Certificate of Incorporation, stockholders representing 3,416,480 shares elected to redeem their shares for a pro rata share of the amount in the Trust Account resulting in approximately $34,269,000 removed from the Trust Account in connection with such redemptions at a redemption value of approximately $10.03 per share.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective.

 

Changes in Internal Control over Financial Reporting

 

During the three months ended September 30, 2017, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 19 

 

 

PART II — OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

As of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the period ended December 31, 2016 except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC including those risks included in the preliminary proxy statement filed by the Company on November 6, 2017.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 ITEM 6. EXHIBITS

 

Exhibit
Number
  Description
3.1   Amendment to Amended and Restated Certificate of Incorporation. (incorporated by reference to the Current Report on Form 8-K filed by the Company on August 4, 2017).
10.1   Amendment No. 1 to Investment Management Trust Agreement, dated August 3, 2017, by and between Global Partner Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to the Current Report on Form 8-K filed by the Company on August 4, 2017).
31.1   Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2   Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1*   Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
32.2*   Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
     
101.INS   XBRL Instance Document
     
101.SCH    XBRL Taxonomy Extension Schema Document
     
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF    XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB    XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document

 

 

*       Furnished herewith

 

 20 

 

 

SIGNATURES

 

In accordance with the requirements 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.

 

  GLOBAL PARTNER ACQUISITION CORP.
   
Dated: November 9, 2017   /s/ Paul Zepf
 

Name: Paul Zepf

Title: Chief Executive Officer

(Principal Executive Officer)  

 

Dated: November 9, 2017   /s/ Andrew Cook
 

Name: Andrew Cook

Title: Chief Financial Officer and Secretary

(Principal Financial and Accounting Officer)  

 

 

21

 

 

 

EX-31.1 2 f10q0917ex31-1_globalpartner.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the

Securities Exchange Act of 1934

(Section 302 of the Sarbanes-Oxley Act of 2002)

 

I, Paul Zepf, certify that:

 

1.  I have reviewed this Quarterly Report on Form 10-Q of Global Partner Acquisition Corp.;

 

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

a)       designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)      designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)       evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)       disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)       all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)       any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: November 9, 2017   /s/ Paul Zepf
 

Name: Paul Zepf

Title: Chief Executive Officer

(Principal Executive Officer)

EX-31.2 3 f10q0917ex31-2_globalpartner.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Rule 13a-14(a) and Rule 15d-14(e) under the

Securities Exchange Act of 1934

(Section 302 of the Sarbanes-Oxley Act of 2002)

 

I, Andrew Cook, certify that:

 

1.  I have reviewed this Quarterly Report on Form 10-Q of Global Partner Acquisition Corp.;

 

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

a)       designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)      designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)       evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)       disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)       all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)       any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: November 9, 2017   /s/ Andrew Cook
 

Name: Andrew Cook

Title: Chief Financial Officer and Secretary

(Principal Financial Officer)  

 

EX-32.1 4 f10q0917ex32-1_globalpartner.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

 

In connection with the Quarterly Report on Form 10-Q of Global Partner Acquisition Corp. (the “Company”) for the quarter ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), I, Paul Zepf, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: November 9, 2017   /s/ Paul Zepf
 

Name: Paul Zepf

Title: Chief Executive Officer

(Principal Executive Officer)  

EX-32.2 5 f10q0917ex32-2_globalpartner.htm CERTIFICATION

Exhibit 32.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

 

In connection with the Quarterly Report on Form 10-Q of Global Partner Acquisition Corp. (the “Company”) for the quarter ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), I, Andrew Cook, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: November 9, 2017   /s/ Andrew Cook
 

Name: Andrew Cook

Title: Chief Financial Officer and Secretary

(Principal Financial Officer)  

 

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letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><i>Organization and General:</i></font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; 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The Company is an &#8220;emerging growth company,&#8221; as defined in Section 2(a) of the Securities Act of 1933, as amended, or the &#8220;Securities Act,&#8221; as modified by the Jumpstart Our Business Startups Act of 2012 (the &#8220;JOBS Act&#8221;).</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">At September 30, 2017, the Company had not commenced any operations. 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Under the Extension Amendment, public stockholders had the right to redeem their pro rata portion of the funds in the Trust Account and stockholders representing 3,416,480 shares elected to redeem their shares as further discussed in Notes 4 and 5. 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Subsequent to September 30, 2017, on November 2, 2017, the Company drew $600,000 under a Sponsor note executed on November 1, 2017. Further, the Company continues to generate interest income that is available to pay taxes. 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In connection with the receipt of this payment by the Company, the Company paid down approximately $2,250,000 of accrued liabilities relating to the Sequel Business Combination, including the principal amount of the Sponsor Note of $1,200,000 together with approximately $57,000 of accrued interest.</p> </div> 2500000 2250000 1200000 57000 <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>NOTE 8&#160;&#8211;&#160;SUBSEQUENT EVENTS</b></font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>&#160;</b></font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><i>Entry into Merger Agreement for Business Combination</i></font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>&#160;</b></font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On November 2, 2017, the Company entered into an Agreement and Plan of Merger (the &#8220;Merger Agreement&#8221;) by and among the Company, PRPL Acquisition, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (&#8220;Merger Sub&#8221;), Purple Innovation, LLC, a Delaware limited liability company (&#8220;Purple&#8221;), InnoHold, LLC, a Delaware limited liability company and the sole equity holder of Purple (&#8220;InnoHold&#8221;), and the Sponsor, solely in its capacity thereunder as the representative of the Company after the consummation of the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, the Company agreed to acquire Purple&#8217;s business through a merger of Merger Sub with and into Purple, with Purple being the survivor in the merger (the &#8220;Business Combination,&#8221; and together with the other transactions contemplated by the Merger Agreement and the agreements attached thereto, the &#8220;Transactions&#8221;). The Merger Agreement and the Transactions were unanimously approved by the board of directors of the Company.</p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.25in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">&#160;</p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Purple is a comfort technology company with products aimed at improving how people sleep, sit and stand. Purple currently offers mattress, bedding and cushioning products through direct-to-consumer and retail channels. Purple is based in Alpine, UT, was organized as a Delaware limited liability company in 2010 and changed its name to Purple Innovation, LLC in January 2017. Additional information regarding Purple, the Business Combination and the Transactions is available in the Form 8-K filed by the Company on November 3, 2017 and the preliminary proxy statement filed by the Company on November 6, 2017.</p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.25in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><i>Second Sponsor Note</i></font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.25in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 15pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Subsequent to September 30, 2017, on November 1, 2017, the Company executed the Second Sponsor Note for up to $1,000,000 to cover certain Business Combination fees and expenses. The Second Sponsor Note does not bear interest and can be drawn down in any amount upon five business days' notice to the Sponsor. On November 2, 2017, the Company drew $600,000 under the Second Sponsor Note. Under the Second Sponsor Note, the Company has the option to convert any unpaid balance into shares of common stock based on a share price of $10.00 per share. The Sponsor is also entitled to receive a capital commitment fee in the amount of $50,000 in consideration of its agreement to commit to make the loan to the Company. The Second Sponsor Note is repayable in full upon the earliest to occur of: (i) the consummation of the Business Combination, (ii) February 28, 2018 and (iii) the date that the winding up of the Company is effective.</p> 2017-11-01 600000 1000000 50000 The Second Sponsor Note is repayable in full upon the earliest to occur of: (i) the consummation of the Business Combination, (ii) February 28, 2018 and (iii) the date that the winding up of the Company is effective. 34165000 3416480 (i) The consummation of the Initial Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds of the Public Offering outside the Trust Account may be used to pay for business, legal and accounting due diligence expenses for prospective acquisition targets and continuing general and administrative expenses. 0.80 50000 622000 791000 (ii) the redemption of 100% of the shares of common stock included in the Units (as defined below) sold in the Public Offering if the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Public Offering (subject to the requirements of law). Includes the effect of the redemption of 3,416,480 public shares into a pro rata portion of the Trust Account on August 3, 2017 (see Notes 5 and 6). 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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2017
Nov. 07, 2017
Document and Entity Information [Abstract]    
Entity Registrant Name Global Partner Acquisition Corp.  
Entity Central Index Key 0001643953  
Trading Symbol GPAC  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Type 10-Q  
Document Period End Date Sep. 30, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
Entity Filer Category Accelerated Filer  
Entity Common Stock, Shares Outstanding   15,989,770
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Condensed Balance Sheets - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Current assets -    
Cash $ 374,000 $ 237,000
Prepaid expenses 19,000 41,000
Total current assets 393,000 278,000
Non-current assets -    
Cash and investments held in Trust Account 121,749,000 155,543,000
Total assets 122,142,000 155,821,000
Current liabilities -    
Accounts payable 522,000 199,000
Accrued liabilities 289,000 1,614,000
Accrued taxes 204,000 62,000
Total current liabilities 1,015,000 1,875,000
Other liabilities -    
Deferred underwriting commission 4,000,000 4,658,000
Total liabilities 5,015,000 6,533,000
Common stock subject to possible redemption; 11,212,713 shares and 14,428,805 shares, respectively, at September 30, 2017 and December 31, 2016 (at redemption value of approximately $10.00 per share) 112,127,000 144,288,000
Commitments and contingencies
Stockholders' equity:    
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, none issued or outstanding
Common stock, $0.0001 par value, 35,000,000 shares authorized, 4,777,057 shares and 4,977,445 shares, respectively, issued and outstanding (excluding 11,212,713 and 14,428,805 shares, respectively, subject to possible redemption) at September 30, 2017 and December 31, 2016
Additional paid-in-capital 6,179,000 7,630,000
Accumulated deficit (1,179,000) (2,630,000)
Total stockholders' equity 5,000,000 5,000,000
Total liabilities and stockholders' equity $ 122,142,000 $ 155,821,000
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Sep. 30, 2017
Dec. 31, 2016
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Common stock, possible redemption, per share $ 10.04 $ 10.00
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
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3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Statement [Abstract]        
Revenues
General and administrative expenses 937,000 227,000 1,421,000 486,000
Loss from operations (937,000) (227,000) (1,421,000) (486,000)
Other income (expense)        
Transaction fee income 2,500,000 2,500,000
Interest income on Trust Account 294,000 93,000 735,000 258,000
Interest expense on Notes payable - related party (17,000) (57,000)
Total other income 2,777,000 3,178,000
Income (loss) before income tax 1,840,000 (134,000) 1,757,000 (228,000)
Provision for income tax (130,000) (306,000)
Net income (loss) attributable to common stock $ 1,710,000 $ (134,000) $ 1,451,000 $ (228,000)
Weighted average common shares outstanding:        
Basic and diluted 4,988,000 4,763,000 4,995,000 4,754,000
Diluted 15,990,000 4,763,000 18,263,000 4,754,000
Net Income (loss) per common share:        
Basic $ 0.34 $ (0.03) $ 0.29 $ (0.05)
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Condensed Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($)
Total
Common Stock
Paid-in Capital
Additional Accumulated Deficit
Balance at Dec. 31, 2016 $ 5,000,000 $ 7,630,000 $ (2,630,000)
Balance, shares at Dec. 31, 2016   4,977,445    
Reduction of deferred underwriting commissions 658,000 658,000
Change in proceeds subject to possible redemption [1] (2,109,000) (2,109,000)
Change in proceeds subject to possible redemption, shares [1]   (200,388)    
Net income 1,451,000 1,451,000
Balance at Sep. 30, 2017 $ 5,000,000 $ 6,179,000 $ (1,179,000)
Balance, shares at Sep. 30, 2017   4,777,057    
[1] Includes the effect of the redemption of 3,416,480 public shares into a pro rata portion of the Trust Account on August 3, 2017 (see Notes 5 and 6).
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Condensed Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Cash flows from operating activities:    
Net income (loss) $ 1,451,000 $ (228,000)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:    
Decrease in prepaid expenses 22,000 59,000
Increase (decrease) in accounts payable, accrued liabilities and accrued taxes, net (860,000) (47,000)
Trust income retained in Trust Account (476,000) (187,000)
Net cash provided by (used) in operating activities 137,000 (403,000)
Cash flows from investing activities:    
Withdrawal from Trust Account upon redemption of 3,416,480 public shares 34,165,000
Cash flows from financing activities:    
Proceeds from notes payable - related party 1,200,000
Payment of notes payable - related party (1,200,000)
Redemption of common stock (34,165,000)
Net cash used in financing activities (34,165,000)
Net increase (decrease) in cash 137,000 (403,000)
Cash at beginning of period 237,000 1,048,000
Cash at end of period 374,000 645,000
Supplemental disclosure of noncash investing and financing activities:    
Reduction of deferred underwriting commissions $ 658,000
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Condensed Statements of Cash Flows (Parenthetical) (Unaudited)
9 Months Ended
Sep. 30, 2017
shares
Statement of Cash Flows [Abstract]  
Redemption of public shares 3,416,480
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Description of Organization and Business Operations
9 Months Ended
Sep. 30, 2017
Description of Organization and Business Operations [Abstract]  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

NOTE 1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

 

Organization and General:

 

Global Partner Acquisition Corp. (the “Company”) was incorporated in Delaware on May 19, 2015. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

 

At September 30, 2017, the Company had not commenced any operations. All activity for the period from May 19, 2015 (inception) through September 30, 2017 relates to the Company’s formation and the initial public offering (“Public Offering”) described below and, subsequent to the Public Offering, locating and completing a suitable Business Combination. The Company has not and will not generate any operating revenues until after completion of the Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on cash from the proceeds of the Public Offering and a concurrent private placement.

 

Sponsor and Financing:

 

The Company’s sponsor is Global Partner Sponsor I LLC, a Delaware limited liability corporation (the “Sponsor” or the “initial stockholder”). The registration statement for the Public Offering (as described in Note 3) was declared effective by the United States Securities and Exchange Commission (the “SEC”) on July 29, 2015. The Company intends to finance an Initial Business Combination with proceeds from $155,250,000 of gross proceeds from the Public Offering, including the underwriters’ exercise of the over-allotment option in full (as described in Note 3) and approximately $6,408,000 of gross proceeds from a concurrent private placement (Note 3). Upon the closing of the Public Offering and the private placement, $155,250,000 was deposited in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”) as discussed below. See below as well as Notes 4, 5 and6 regarding redemptions of common stock and the release of a portion of the funds from the Trust Account in connection with stockholder approval, in August 2017, to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company must complete its Initial Business Combination.

 

The Trust Account:

 

The funds in the Trust Account may be invested only in U.S. government treasury bills with a maturity of one hundred and eighty (180) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds of the Public Offering outside the Trust Account may be used to pay for business, legal and accounting due diligence expenses for prospective acquisition targets and continuing general and administrative expenses.

 

The Company’s amended and restated certificate of incorporation originally provided that, other than the withdrawal of interest to pay taxes, if any, none of the funds held in the Trust Account will be released until the earlier of: (i) the completion of the Initial Business Combination; or (ii) the redemption of 100% of the shares of common stock included in the Units (as defined below) sold in the Public Offering if the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Public Offering (subject to the requirements of law).

 

However, on August 3, 2017, the stockholders of the Company approved an amendment to the Company’s amended and restated certificate of incorporation to extend the date on which the Company must liquidate the Trust Account if the Company has not completed an initial business combination, from August 4, 2017 to November 6, 2017 (or February 5, 2018 if the Company has executed a definitive agreement for an initial business combination by November 6, 2017), and to permit the withdrawal of funds from the Trust Account to pay stockholders who properly exercise their redemption rights in connection with the extension. Stockholders representing 3,416,480 shares elected to redeem their shares as further discussed in Notes 5 and 6. As discussed further in Note 8, on November 2, 2017, the Company entered into a definitive agreement for an Initial Business Combination, thereby extending the date to complete an Initial Business Combination to February 5, 2018.

 

Initial Business Combination:

 

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 an Initial Business Combination with a Target Business. As used herein, a “Target Business” is one or more businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the Company signing a definitive agreement in connection with the Initial Business Combination. There is no assurance that the Company will be able to successfully effect an Initial Business Combination.

 

The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to have their shares redeemed by the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to redeem their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval unless a vote is required by NASDAQ rules. If the Company seeks stockholder approval, it will complete its Initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination. However, in no event will the Company redeem its Public Shares (as defined below) in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its Public Shares and the related Initial Business Combination.

 

If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. As a result, such shares of common stock are recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with Financial Accounting Standards, Board (“FASB”) Accounting Standards Update (“ASC”) 480, “Distinguishing Liabilities from Equity.”

 

On August 3, 2017, the Company’s stockholders agreed to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate an Initial Business Combination from August 4, 2017 to February 5, 2018 or such earlier date as determined by the Board of Directors of the Company. Under the Extension Amendment, public stockholders had the right to redeem their pro rata portion of the funds in the Trust Account and stockholders representing 3,416,480 shares elected to redeem their shares as further discussed in Notes 4 and 5. See Liquidation and Going Concern below.

 

Liquidation and Going Concern:

 

As noted in Initial Business Combination above, the Company will have until February 5, 2018 to complete an Initial Business Combination. If the Company does not complete an Initial Business Combination by that date, the Company will (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest, but less taxes payable (less up to $50,000 of such net interest to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its creditors and remaining stockholders, as part of its plan of dissolution and liquidation. The initial stockholders have entered into letter agreements with the Company, pursuant to which they have waived their rights to participate in any redemption with respect to their initial shares; however, if the Sponsor or any of the Company’s officers, directors or affiliates acquire shares of common stock in or after the Public Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not complete the Initial Business Combination within the required time period.

 

This mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern at September 30, 2017. No adjustments have been made to the carrying amounts of assets or liabilities as of such date should the Company be required to liquidate after February 5, 2018.

 

In the event of liquidation, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Public Offering.

 

At September 30, 2017, the Company had current liabilities of approximately $1,015,000 and negative working capital of approximately $622,000. Of these amounts, approximately $204,000 represents accrued taxes (which can be paid with interest earned from the Trust Account), approximately $20,000 represents unpaid administrative fees payable to our Sponsor and approximately $791,000 largely represents amounts owed to professionals, consultants, advisors and others for their services. Funds in the Trust Account are not generally available to pay professionals, consultants, advisors and others absent an Initial Business Combination and the majority of such parties have agreed to waive any claims against the Trust Account. The Company believes that such professionals, consultants, advisors and others will continue assisting the Company with completing the Initial Business Combination and, excluding our independent registered public accounting firm, defer a portion of their fees until such completion or on a contingency basis. Subsequent to September 30, 2017, on November 2, 2017, the Company drew $600,000 under a Sponsor note executed on November 1, 2017. Further, the Company continues to generate interest income that is available to pay taxes. As such, the Company believes that it has sufficient working capital at September 30, 2017 (assuming the subsequent receipt of the additional funding from the Sponsor which is not currently in place) to fund its operations until completion of its Initial Business Combination or, if necessary, through February 5, 2018.

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Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2017
Summary of Significant Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation:

 

The accompanying interim unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”), and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2017 and December 31, 2016, and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.

 

The accompanying unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC. All dollar amounts are rounded to the nearest thousand dollars.

 

Emerging Growth Company:

 

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.

 

Net Income (Loss) Per Common Share:

 

The Company complies with the accounting and disclosure requirements in ASC Topic 260, “Earnings Per Share.” Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Shares of common stock subject to possible redemption at September 30, 2017 have been excluded from the calculation of basic income per share for the three and nine months ended September 30, 2017 since such shares, if redeemed, only participate in their pro rata share of the Trust Account. The Company has not considered the effect of warrants sold in the Public Offering and the concurrent private placement to purchase 14,170,000 shares of common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events.

 

Concentration of Credit Risk:

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

 

Financial Instruments:

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the financial statements.

 

Use of Estimates:

 

The preparation of financial statements in conformity with GAAP requires the Company’s 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. Actual results could differ from those estimates.

 

Income Taxes:

 

The Company follows the asset and liability method of accounting for income taxes under FASB ASC, 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. At September 30, 2017 and December 31, 2016, the Company has a deferred tax asset of approximately $450,000 and $225,000, respectively, primarily related to start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is appropriate at this time.

 

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2017 or December 31, 2016. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2017 or December 31, 2016. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

 

Redeemable Common Stock:

 

All of the 15,525,000 common shares sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of common shares under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with FASB ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of an entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001.

  

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital.

 

On August 3, 2017, in connection with stockholder approval of an amendment to the Company’s amended and restated certificate of incorporation, stockholders representing 3,416,480 shares elected to redeem their shares as discussed further in Notes 5 and 6.

 

Accordingly, at September 30, 2017 and December 31, 2016, 11,212,713 and 14,428,805, respectively, of the 15,525,000 Public Shares were classified outside of permanent equity at their redemption value.

 

Recent Accounting Pronouncements:

 

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
Public Offering
9 Months Ended
Sep. 30, 2017
Public Offering [Abstract]  
PUBLIC OFFERING

NOTE 3 – PUBLIC OFFERING

 

On August 4, 2015, the Company closed the Public Offering for the sale of 15,525,000 Units at a price of $10.00 per unit (the “Units”), including the full exercise of the underwriters’ over-allotment option yielding gross proceeds of $155,250,000. Each Unit consists of one share of the Company’s common stock, $0.0001 par value and one redeemable common stock purchase warrant (the “Warrants”). Each Warrant entitles the holder to purchase one-half of one share of common stock at a price of $5.75. No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Each Warrant will become exercisable on the later of 30 days after the completion of the Initial Business Combination or 12 months from the closing of the Public Offering and will expire five years after the completion of the Initial Business Combination or earlier upon redemption or liquidation. However, if the Company does not complete the Initial Business Combination on or prior to February 5, 2018, the Warrants will expire. The Company has agreed to use its best efforts following the completion of the Initial Business Combination to file a new registration statement under the Securities Act, to cover the shares of common stock issuable upon the exercise of the warrants. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of the Warrants issued as part of the 15,525,000 Units during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they are exercised on a cashless basis in the circumstances described in the warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $24.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.

 

The Company paid an underwriting discount of 3% of the gross proceeds of the Public Offering to the underwriters at the closing of the Public Offering (approximately $4,658,000), with an additional fee (the “Deferred Discount”) of 3% of the gross proceeds payable upon the Company’s completion of the Initial Business Combination. In July 2017, the Company reached an agreement with the underwriters to reduce the Deferred Discount from $4,657,500 to $4,000,000. The reduction was recorded as an addition to additional paid in capital in the three and nine months ended September 30, 2017. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes the Initial Business Combination.

 

In addition, on August 4, 2015, the Sponsor paid the Company approximately $6,408,000 in a private placement for the purchase of 12,815,000 warrants at a price of $0.50 per warrant (the “Private Placement Warrants”) - see also Note 4.

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Related Party Transactions
9 Months Ended
Sep. 30, 2017
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 4 – RELATED PARTY TRANSACTIONS

 

Founder Shares:

 

In May 2015, the Sponsor purchased 3,881,250 shares of common stock (the “Founder Shares”) for $25,000, or approximately $0.006 per share. The Founder Shares are identical to the common stock included in the Units sold in the Public Offering except that the Founder Shares are subject to certain transfer restrictions as described in more detail below. The Sponsor agreed to forfeit up to 506,250 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters so that the initial stockholder would own 20.0% of the Company’s issued and outstanding shares after the Public Offering. As described above, the underwriters exercised their over-allotment option in full and therefore none of the Founder Shares were forfeited.

 

The Company’s initial stockholder has agreed not to transfer, assign or sell any of its Founder Shares until the earlier of (A) one year after the completion of the Initial Business Combination, or earlier if, subsequent to the Initial Business Combination, the last sale price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the Initial Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

 

Private Placement Warrants;

 

Upon the closing of the Public Offering on August 4, 2015, the Sponsor paid the Company approximately $6,408,000 in a private placement for the purchase of 12,815,000 warrants (including warrants in connection with the exercise of the over-allotment option) at a price of $0.50 per warrant (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase one-half of one share of common stock at $5.75 per share. The purchase price of the Private Placement Warrants was added to the proceeds from the Public Offering held in the Trust Account pending completion of the Initial Business Combination. The Private Placement Warrants (including the common stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Initial Business Combination and they are non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the warrants included in the Units sold in the Public Offering. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Warrants sold as part of the Units in the Public Offering and have no net cash settlement provisions.

 

If the Company does not complete an Initial Business Combination, then the proceeds from the Private Placement Warrants will be part of the liquidating distribution to the public stockholders and the Private Placement Warrants will expire worthless.

 

Registration Rights:

 

The Company’s initial stockholder and holders of the Private Placement Warrants are entitled to registration rights pursuant to a registration rights agreement entered into in connection with the Public Offering in July 2015. The Company’s initial stockholder and holders of the Private Placement Warrants are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders have “piggy-back” registration rights to include their securities in other registration statements filed by the Company. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Related Party Loans:

 

On January 12, 2017, the Company issued a promissory note to the Sponsor. The note permitted the Company to borrow money from time to time from the Sponsor in an aggregate principal amount of up to $1,200,000 with an interest rate of 7.5% per annum. During January 2017, the Company borrowed $1,200,000 under the note. The Company used the proceeds from such borrowings for ongoing operational expenses and certain other expenses in connection with the Company’s Initial Business Combination. The note was repaid, together with approximately $57,000 of accrued interest, on September 5, 2017 (see Note 7).

  

Administrative Services Agreement:

 

The Company has agreed to pay $10,000 a month for office space, utilities and administrative support to the Sponsor. Services commenced on July 29, 2015, the date the securities were first listed on the NASDAQ Capital Market, and will terminate upon the earlier of the consummation by the Company of the Initial Business Combination or the liquidation of the Company. Administrative services charges earned but not paid under the agreement aggregating $20,000 are included in accrued liabilities at September 30, 2017.

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Trust Account and Fair Value Measurement
9 Months Ended
Sep. 30, 2017
Trust Account and Fair Value Measurement [Abstract]  
TRUST ACCOUNT AND FAIR VALUE MEASUREMENT

NOTE 5 - TRUST ACCOUNT AND FAIR VALUE MEASUREMENT

 

The Company complies with FASB ASC 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

 

Upon the closing of the Public Offering and the private placement, a total of $155,250,000 was deposited into the Trust Account. All proceeds in the Trust Account may be invested in either U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, and that invest solely in U.S. government treasury obligations.

 

At September 30, 2017 and December 31, 2016, the proceeds of the Trust Account were invested primarily in U.S. government treasury bills. The U.S. government treasury bills held at December 31, 2016 matured in March 2017 and the U. S. government treasury bills held at September 30, 2017 matured in October 2017. The Company classifies its U.S. government treasury bills and equivalent securities as held-to-maturity in accordance with FASB ASC 320 “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheet at September 30, 2017 and December 31, 2016 and adjusted for the amortization or accretion of premiums or discounts. Approximately $66,000 and $1,000, respectively, of the balance in the Trust Account was held in cash at September 30, 2017 and December 31, 2016. During the nine months ended September 30, 2017 and 2016, approximately $260,000 and $70,000, respectively, was released from the Trust Account to the Company to pay taxes.

 

The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In addition, the table presents the carrying value under FASB ASC 320. Since all of the Company’s permitted investments consist of U.S. government treasury bills and cash, fair values of its investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities as follows:

 

    Carrying     Gross     Quoted
Prices in
 
    Value at     Unrealized     Active  
Description   September 30,
2017
    Holding
Gain
    Markets
(Level 1)
 
Assets:                  
U.S. Government                  
Treasury Bills   $ 121,683,000     $ 10,000     $ 121,693,000  
Cash     66,000       -       66,000  
Total   $ 121,749,000     $ 10,000     $ 121,759,000  

 

    Carrying     Gross     Quoted Prices in  
    Value at     Unrealized     Active  
Description   December 31,
2016
    Holding
Loss
    Markets
(Level 1)
 
Assets                  
U.S. Government                  
Treasury Bills   $ 155,542,000     $ (15,000 )   $ 155,527,000  
Cash     1,000       -       1,000  
Total   $ 155,543,000     $ (15,000 )   $ 155,528,000  

  

On August 3, 2017, in connection with stockholder approval of the Company’s Amended and Restated Certificate of Incorporation, stockholders representing 3,416,480 shares elected to redeem their shares for a pro rata share of the amount in the Trust Account resulting in approximately $34,269,000 removed from the Trust Account in connection with such redemptions at a redemption value of approximately $10.03 per share.

 

At September 30, 2017, such redemption amount per share was approximately $10.04.

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Stockholders' Equity
9 Months Ended
Sep. 30, 2017
Stockholders' Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 6 – STOCKHOLDERS’ EQUITY

 

Common Stock:

 

The Company is authorized to issue 35,000,000 shares of common stock. The Company will likely (depending on the terms of the Initial Business Combination) be required to increase the number of shares of common stock which it is authorized to issue at the same time as its stockholders vote on the Initial Business Combination to the extent the Company seeks stockholder approval in connection with the Initial Business Combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock they own. At September 30, 2017 and December 31, 2016, there were 15,989,770 and 19,406,250, respectively, shares of common stock issued and outstanding. At September 30, 2017 and December 31, 2016, 11,212,713 and 14,428,805, respectively, of the outstanding shares were subject to redemption.

 

As discussed further in Note 5, on August 3, 2017, shareholders representing 3,416,480 shares elected to redeem their shares which reduced the number of outstanding shares from 19,406,250 to 15,989,770.

 

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. At September 30, 2017 and December 31, 2016, there were no shares of preferred stock issued and outstanding.

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Termination of Proposed Business Combination with Sequel and Related Transaction Fee Income
9 Months Ended
Sep. 30, 2017
Termination of Proposed Business Combination with Sequel and Related Transaction Fee Income [Abstract]  
TERMINATION OF PROPOSED BUSINESS COMBINATION WITH SEQUEL AND RELATED TRANSACTION FEE INCOME

NOTE 7 – TERMINATION OF PROPOSED BUSINESS COMBINATION WITH SEQUEL AND RELATED TRANSACTION FEE INCOME

 

On January 11, 2017, the Company entered into an Agreement and Plan of Merger (the “Sequel Merger Agreement”), by and among the Company, Sequel Acquisition, LLC (the “MergerSub”), a wholly-owned subsidiary of the Company, Sequel Youth and Family Services, LLC (“Sequel”) and other parties named thereto. Pursuant to the Sequel Merger Agreement, the Company agreed to acquire the Sequel business through an equity purchase and a merger of MergerSub with and into Sequel, with Sequel being the survivor in the merger (the “Sequel Business Combination”). On May 19, 2017, the Company received notice from Sequel that Sequel terminated the Sequel Merger Agreement since the transactions contemplated by the Sequel Merger Agreement were not completed on or prior to May 15, 2017 as required.

 

On September 1, 2017, the Company received a $2,500,000 fee for releasing a third party from a non-circumvention agreement with the Company relating to the Sequel Business Combination. In connection with the receipt of this payment by the Company, the Company paid down approximately $2,250,000 of accrued liabilities relating to the Sequel Business Combination, including the principal amount of the Sponsor Note of $1,200,000 together with approximately $57,000 of accrued interest.

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Subsequent Events
9 Months Ended
Sep. 30, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 8 – SUBSEQUENT EVENTS

 

Entry into Merger Agreement for Business Combination

 

On November 2, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, PRPL Acquisition, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub”), Purple Innovation, LLC, a Delaware limited liability company (“Purple”), InnoHold, LLC, a Delaware limited liability company and the sole equity holder of Purple (“InnoHold”), and the Sponsor, solely in its capacity thereunder as the representative of the Company after the consummation of the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, the Company agreed to acquire Purple’s business through a merger of Merger Sub with and into Purple, with Purple being the survivor in the merger (the “Business Combination,” and together with the other transactions contemplated by the Merger Agreement and the agreements attached thereto, the “Transactions”). The Merger Agreement and the Transactions were unanimously approved by the board of directors of the Company.

 

Purple is a comfort technology company with products aimed at improving how people sleep, sit and stand. Purple currently offers mattress, bedding and cushioning products through direct-to-consumer and retail channels. Purple is based in Alpine, UT, was organized as a Delaware limited liability company in 2010 and changed its name to Purple Innovation, LLC in January 2017. Additional information regarding Purple, the Business Combination and the Transactions is available in the Form 8-K filed by the Company on November 3, 2017 and the preliminary proxy statement filed by the Company on November 6, 2017.

 

Second Sponsor Note

 

Subsequent to September 30, 2017, on November 1, 2017, the Company executed the Second Sponsor Note for up to $1,000,000 to cover certain Business Combination fees and expenses. The Second Sponsor Note does not bear interest and can be drawn down in any amount upon five business days' notice to the Sponsor. On November 2, 2017, the Company drew $600,000 under the Second Sponsor Note. Under the Second Sponsor Note, the Company has the option to convert any unpaid balance into shares of common stock based on a share price of $10.00 per share. The Sponsor is also entitled to receive a capital commitment fee in the amount of $50,000 in consideration of its agreement to commit to make the loan to the Company. The Second Sponsor Note is repayable in full upon the earliest to occur of: (i) the consummation of the Business Combination, (ii) February 28, 2018 and (iii) the date that the winding up of the Company is effective.

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Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2017
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation:

Basis of Presentation:

 

The accompanying interim unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”), and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2017 and December 31, 2016, and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.

 

The accompanying unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC. All dollar amounts are rounded to the nearest thousand dollars.

Emerging Growth Company:

Emerging Growth Company:

 

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.

Net Income (Loss) Per Common Share:

Net Income (Loss) Per Common Share:

 

The Company complies with the accounting and disclosure requirements in ASC Topic 260, “Earnings Per Share.” Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Shares of common stock subject to possible redemption at September 30, 2017 have been excluded from the calculation of basic income per share for the three and nine months ended September 30, 2017 since such shares, if redeemed, only participate in their pro rata share of the Trust Account. The Company has not considered the effect of warrants sold in the Public Offering and the concurrent private placement to purchase 14,170,000 shares of common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events.

Concentration of Credit Risk:

Concentration of Credit Risk:

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Financial Instruments:

Financial Instruments:

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the financial statements.

Use of Estimates:

Use of Estimates:

 

The preparation of financial statements in conformity with GAAP requires the Company’s 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. Actual results could differ from those estimates.

Income Taxes:

Income Taxes:

 

The Company follows the asset and liability method of accounting for income taxes under FASB ASC, 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. At September 30, 2017 and December 31, 2016, the Company has a deferred tax asset of approximately $450,000 and $225,000, respectively, primarily related to start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is appropriate at this time.

 

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2017 or December 31, 2016. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2017 or December 31, 2016. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

Redeemable Common Stock:

Redeemable Common Stock:

 

All of the 15,525,000 common shares sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of common shares under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with FASB ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of an entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001.

  

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital.

 

On August 3, 2017, in connection with stockholder approval of an amendment to the Company’s amended and restated certificate of incorporation, stockholders representing 3,416,480 shares elected to redeem their shares as discussed further in Notes 5 and 6.

 

Accordingly, at September 30, 2017 and December 31, 2016, 11,212,713 and 14,428,805, respectively, of the 15,525,000 Public Shares were classified outside of permanent equity at their redemption value.

Recent Accounting Pronouncements:

Recent Accounting Pronouncements:

 

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Trust Account and Fair Value Measurement (Tables)
9 Months Ended
Sep. 30, 2017
Trust Account and Fair Value Measurement [Abstract]  
Schedule of identical assets or liabilities
    Carrying     Gross     Quoted
Prices in
 
    Value at     Unrealized     Active  
Description   September 30,
2017
    Holding
Gain
    Markets
(Level 1)
 
Assets:                  
U.S. Government                  
Treasury Bills   $ 121,683,000     $ 10,000     $ 121,693,000  
Cash     66,000       -       66,000  
Total   $ 121,749,000     $ 10,000     $ 121,759,000  

 

    Carrying     Gross     Quoted Prices in  
    Value at     Unrealized     Active  
Description   December 31,
2016
    Holding
Loss
    Markets
(Level 1)
 
Assets                  
U.S. Government                  
Treasury Bills   $ 155,542,000     $ (15,000 )   $ 155,527,000  
Cash     1,000       -       1,000  
Total   $ 155,543,000     $ (15,000 )   $ 155,528,000
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.8.0.1
Description of Organization and Business Operations (Details) - USD ($)
9 Months Ended
Aug. 03, 2017
Sep. 30, 2017
Nov. 30, 2017
Nov. 02, 2017
Dec. 31, 2016
Description of Organization and Business Operations (Textual)          
Gross proceeds from public offering   $ 155,250,000      
Gross proceeds from issuance of private placement   6,408,000      
Cash deposited in trust account   $ 155,250,000      
Business combination, description   (i) The consummation of the Initial Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds of the Public Offering outside the Trust Account may be used to pay for business, legal and accounting due diligence expenses for prospective acquisition targets and continuing general and administrative expenses.      
Business combination fair market value, percentage   80.00%      
Net tangible assets   $ 5,000,001      
Interest paid, net   50,000      
Current liabilities   1,015,000     $ 1,875,000
Negative working capital   622,000      
Accrued taxes   204,000     $ 62,000
Professionals and services expense   $ 791,000      
Common stock, redemption terms   (ii) the redemption of 100% of the shares of common stock included in the Units (as defined below) sold in the Public Offering if the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Public Offering (subject to the requirements of law).      
Administrative fees payable   $ 20,000      
Stock Redeemed or Called During Period, Shares 3,416,480        
Subsequent Event [Member] | Second Sponsor Note [Member]          
Description of Organization and Business Operations (Textual)          
Sponsor note     $ 1,000,000 $ 600,000  
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Details) - USD ($)
9 Months Ended
Aug. 03, 2017
Aug. 04, 2015
Sep. 30, 2017
Dec. 31, 2016
Summary of Significant Accounting Policies (Textual)        
Purchase of common stock     14,170,000  
Federal depository insurance coverage     $ 250,000  
Deferred tax assets related to net loss carryforwards     450,000 $ 225,000
Unrecognized tax benefits    
Accrued interest and penalties related to unrecognized tax benefits    
Net tangible assets     $ 5,000,001  
Common stock excluding possible redemption, shares     11,212,713 14,428,805
Stock redeemed or called during period shares 3,416,480      
Public Offering [Member]        
Summary of Significant Accounting Policies (Textual)        
Common stock excluding possible redemption, shares       15,525,000
Number of units sold in proposed offering   15,525,000 15,525,000  
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Public Offering (Details) - USD ($)
9 Months Ended
Aug. 04, 2015
Sep. 30, 2017
Jul. 31, 2017
Dec. 31, 2016
Public Offering (Textual)        
Gross proceeds from public offering   $ 155,250,000    
Deferred underwriting commission   4,000,000   $ 4,658,000
Private placement value   $ 6,408,000    
Purchase of warrants     4,657,500  
Underwriters to reduce the Deferred Discount     $ 4,000,000  
Public Offering [Member]        
Public Offering (Textual)        
Number of units sold in proposed offering 15,525,000 15,525,000    
Gross proceeds from public offering $ 155,250,000      
Sale of common stock, price per share $ 10.00      
Description of unit Each Unit consists of one share of the Company's common stock, $0.0001 par value and one redeemable common stock purchase warrant (the "Warrants").      
Warrant, description Each Warrant entitles the holder to purchase one-half of one share of common stock at a price of $5.75.      
Description of warrant exercisable

Each Unit consists of one share of the Company’s common stock, $0.0001 par value and one redeemable common stock purchase warrant (the “Warrants”). Each Warrant entitles the holder to purchase one-half of one share of common stock at a price of $5.75. No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Each Warrant will become exercisable on the later of 30 days after the completion of the Initial Business Combination or 12 months from the closing of the Public Offering and will expire five years after the completion of the Initial Business Combination or earlier upon redemption or liquidation. However, if the Company does not complete the Initial Business Combination on or prior to February 5, 2018, the Warrants will expire. The Company has agreed to use its best efforts following the completion of the Initial Business Combination to file a new registration statement under the Securities Act, to cover the shares of common stock issuable upon the exercise of the warrants. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of the Warrants issued as part of the 15,525,000 Units during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they are exercised on a cashless basis in the circumstances described in the warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $24.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.

     
Underwriters discount, description The Company paid an underwriting discount of 3% of the gross proceeds of the Public Offering to the underwriters at the closing of the Public Offering (approximately $4,658,000), with an additional fee (the "Deferred Discount") of 3% of the gross proceeds payable upon the Company's completion of the Initial Business Combination. In July 2017, the Company reached an agreement with the underwriters to reduce the Deferred Discount from $4,657,500 to $4,000,000. The reduction was recorded as an addition to additional paid in capital in the three and nine months ended September 30, 2017. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes the Initial Business Combination.      
Percentage of deferred discount 3.00%      
Exercise price of warrants $ 0.01      
Underwriting discount 3.00%      
Private Placement [Member]        
Public Offering (Textual)        
Exercise price of warrants $ 0.50      
Private placement value $ 6,408,000      
Purchase of warrants 12,815,000      
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
Related Party Transactions (Details) - USD ($)
1 Months Ended 9 Months Ended
Sep. 05, 2017
Jan. 12, 2017
Aug. 04, 2015
May 31, 2015
Sep. 30, 2017
Jul. 31, 2017
Jan. 31, 2017
Related Party Transactions (Textual)              
Administrative services         $ 20,000    
Aggregate principal amount   $ 1,200,000          
Borrowed debt amount             $ 1,200,000
Interest rate per annum   7.50%          
Private placement value         6,408,000    
Purchase of warrants           4,657,500  
Unpaid administrative services charges         20,000    
Repaid amount of accrued interest $ 57,000            
Private Placement [Member]              
Related Party Transactions (Textual)              
Exercise price of warrants     $ 0.50        
Private placement value     $ 6,408,000        
Purchase of warrants     12,815,000        
Private Placement Warrants [Member]              
Related Party Transactions (Textual)              
Business combination, description     The Private Placement Warrants (including the common stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Initial Business Combination and they are non-redeemable so long as they are held by the Sponsor or its permitted transferees.        
Warrant description     Each Private Placement Warrant entitles the holder to purchase one-half of one share of common stock at $5.75 per share.        
Founder Shares [Member]              
Related Party Transactions (Textual)              
Purchase of common stock shares       3,881,250      
Purchase of common stock shares, value       $ 25,000      
Sale of common stock, price per share       $ 0.006      
Shares forfeited       506,250      
Ownership percentage       20.00%      
Business combination, description       (A) one year after the completion of the Initial Business Combination, or earlier if, subsequent to the Initial Business Combination, the last sale price of the Company's common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the Initial Business Combination that results in all of the Company's stockholders having the right to exchange their shares of common stock for cash, securities or other property.      
Sponsor [Member]              
Related Party Transactions (Textual)              
Administrative services         $ 10,000    
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
Trust Account and Fair Value Measurement (Details) - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
U.S. Government Treasury Bills $ 121,683,000 $ 155,542,000
U.S. Government Treasury Bills, Gross Unrealized Holding Gain 10,000 (15,000)
Cash 66,000 1,000
Cash, Gross Unrealized Holding Gain
Total 121,749,000 155,543,000
Total, Gross Unrealized Holding Gain 10,000 (15,000)
Quoted Prices in Active Markets (Level 1) [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
U.S. Government Treasury Bills 121,693,000 155,527,000
Cash 66,000 1,000
Total $ 121,759,000 $ 155,528,000
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
Trust Account and Fair Value Measurement (Details Textual) - USD ($)
9 Months Ended
Aug. 03, 2017
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Trust Account and Fair Value Measurement (Textual)        
Cash deposited in trust account   $ 155,250,000    
U.S. government treasury bills maturity, description   The U.S. government treasury bills held at December 31, 2016 matured in March 2017 and the U. S. government treasury bills held at September 30, 2017 matured in October 2017.    
Cash   $ 66,000   $ 1,000
Tax payable to trust account   $ 260,000 $ 70,000  
Stock Redeemed or Called During Period, Shares 3,416,480      
Stock redeemed during period value $ 34,269,000      
Stock redemption, per share $ 10.03 $ 10.04   $ 10.00
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity (Details) - shares
9 Months Ended
Aug. 03, 2017
Sep. 30, 2017
Dec. 31, 2016
Stockholders' Equity (Textual)      
Common stock, shares authorized   35,000,000 35,000,000
Common stock, shares issued   4,777,057 4,977,445
Common stock, shares outstanding   4,777,057 4,977,445
Common stock, voting rights, Description   Holders of the Company's common stock are entitled to one vote for each share of common stock they own.  
Preferred stock, shares authorized   1,000,000 1,000,000
Preferred stock, shares issued  
Preferred stock, shares outstanding  
Stock Redeemed or Called During Period, Shares 3,416,480    
Common stock, possible redemption, shares   11,212,713 14,428,805
Common Stock [Member]      
Stockholders' Equity (Textual)      
Common stock, shares issued   15,989,770 19,406,250
Common stock, shares outstanding   15,989,770 19,406,250
Maximum [Member]      
Stockholders' Equity (Textual)      
Common stock, shares outstanding 19,406,250    
Minimum [Member]      
Stockholders' Equity (Textual)      
Common stock, shares outstanding 15,989,770    
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
Termination of Proposed Business Combination with Sequel and Related Transaction Fee Income (Details)
Sep. 01, 2017
USD ($)
Termination of Proposed Business Combination with Sequel and Related Transaction Fee Income (Textual)  
Received fee relating to sequel business combination $ 2,500,000
Sequel Merger Agreement [Member]  
Termination of Proposed Business Combination with Sequel and Related Transaction Fee Income (Textual)  
Accrued liabilities relating to sequel business combination 2,250,000
Principal amount of sponsor note 1,200,000
Accrued interest $ 57,000
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent Events (Details) - Subsequent Event [Member] - Second Sponsor Note [Member] - USD ($)
1 Months Ended
Nov. 30, 2017
Nov. 02, 2017
Subsequent Events (Textual)    
Issuance date of note Nov. 01, 2017  
Second sponsor note $ 1,000,000 $ 600,000
Share price per share $ 10.00  
Sponsor capital commitment fee amount $ 50,000  
Sponsor capital commitment fee amount, description The Second Sponsor Note is repayable in full upon the earliest to occur of: (i) the consummation of the Business Combination, (ii) February 28, 2018 and (iii) the date that the winding up of the Company is effective.  
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