SEC Filing Summary: Hambrecht Asia Acquisition Corp. (10-Q)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2008, for Hambrecht Asia Acquisition Corp. (the "Company"). The Company is a Cayman Islands corporation in the development stage, formed as a "blank check" company to acquire one or more operating businesses primarily located in the People's Republic of China. As of the reporting date, the Company had not commenced any operations or generated any revenues. All activity relates to its formation and its Initial Public Offering (IPO) consummated in March 2008.
Key Financial Metrics
| Metric | Value (as of/for period ended June 30, 2008) |
|---|---|
| Revenue | $0 (No operations) |
| Net Income (Loss) (Six Months) | $11,449 |
| Net Income (Loss) (Three Months) | $23,661 |
| Operating Costs (Six Months) | $156,683 |
| Interest Income (Six Months) | $168,133 |
| Cash and Cash Equivalents (Outside Trust) | $76,395 |
| Cash Equivalents in Trust Account | $33,634,793 |
| Total Assets | $33,844,520 |
| Current Liabilities | $94,063 (Accrued expenses) |
| Deferred Underwriting Discounts | $830,903 (Long-term liability) |
| Shares Outstanding | 5,299,125 (Includes 1,271,788 subject to redemption) |
Material Changes vs. Prior Period
- Capitalization: The Company consummated its IPO on March 12, 2008, and the underwriters exercised their over-allotment option on March 31, 2008. This resulted in a massive increase in assets, primarily due to the deposit of approximately $33.6 million into the Trust Account, compared to zero in the Trust Account as of December 31, 2007.
- Liabilities: Current liabilities increased to $94,063 due to accrued expenses. A long-term liability of $830,903 was recorded for deferred underwriting discounts, net of amounts subject to forfeiture.
- Equity: Shareholders' equity increased significantly from $3,264 at year-end 2007 to $22,846,993, driven by the proceeds from the IPO and private placement, offset by the classification of redeemable shares.
- Profitability: The Company shifted from a net loss position in the prior period to a net income position for the three and six months ended June 30, 2008, driven entirely by interest income earned on the Trust Account ($168,133 for six months) exceeding formation and operating costs ($156,683 for six months).
Outlook, Risks, and Management Commentary
- Business Combination Deadline: The Company must consummate a business combination by September 12, 2009 (18 months from IPO). If a letter of intent is signed within 18 months, the deadline extends to March 12, 2010. Shareholder approval is required to extend the period further to March 12, 2011.
- Liquidity: The Company has approximately $76,395 in cash outside the Trust Account to fund working capital. It may access up to $700,000 (or $1,050,000 with shareholder approval) of interest earned on the Trust Account for working capital needs.
- Redemption Rights: Public shareholders have the right to redeem their shares for a pro-rata portion of the Trust Account if they vote against a business combination or an extension of the deadline. Approximately 1,271,788 shares are currently classified as subject to possible redemption at $7.92 per share.
- Risks: The Company is a development-stage enterprise with no operating history. If a business combination is not consummated within the specified timeframes, the Company will liquidate and distribute the Trust Account proceeds to shareholders. The per-share value upon liquidation may be less than the IPO price.
- Related Party Transactions: The Company pays $7,500 per month to a related party for office space and administrative services. Related parties also hold private placement warrants and founder shares.
Investor Verification Checklist
- Verify the status of the Trust Account balance ($33,634,793) and confirm the amount of interest earned available for withdrawal.
- Confirm the exact deadline for the business combination and whether any extension votes are scheduled.
- Review the number of shares subject to redemption (1,271,788) and the current redemption price ($7.92) to assess potential dilution or cash outflow.
- Monitor the $76,395 cash balance outside the Trust to ensure it is sufficient to cover operating expenses until a business combination or liquidation.
- Check for any updates on the $1,187,004 deferred underwriting fee obligation contingent on a successful business combination.