TROO

Business Context and Reporting Period

Company: Hambrecht Asia Acquisition Corp. (Note: Input metadata listed "Troops, Inc." but the filing text identifies the registrant as Hambrecht Asia Acquisition Corp.)
Reporting Period: Quarter ended March 31, 2009.
Business Model: A Cayman Islands "blank check" company (Special Purpose Acquisition Company) in the development stage. The company was formed 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 operating revenues.

Key Financial Metrics

Note: The company holds the majority of its assets in a Trust Account invested in U.S. government debt securities. Operating cash is held outside the trust for working capital.

Material Changes vs. Prior Period

• Net Loss: The company reported a net loss of $4,369 for the three months ended March 31, 2009, compared to a net loss of $12,212 for the same period in 2008. The loss in 2009 was driven by operating expenses exceeding interest income earned on the Trust Account.
• Operating Expenses: Formation and administrative costs increased to $57,745 in Q1 2009 from $27,489 in Q1 2008. Specific costs included $12,501 in insurance expense (amortization of D&O policy), $22,500 in rent, and $22,744 in other operating costs.
• Interest Income: Interest income decreased significantly to $15,277 in Q1 2009 from $53,376 in Q1 2008, reflecting lower yields on the Trust Account investments.
• Liquidity: Cash held outside the Trust Account decreased from $100,312 at December 31, 2008, to $77,187 at March 31, 2009, due to operating cash outflows.

Outlook, Risks, and Contingencies

• 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 by that date, the deadline extends to March 12, 2010. Shareholder approval is required to extend the period further to March 12, 2011.
• Liquidation Risk: If the company fails to complete a business combination within the specified timeframes, it will dissolve and liquidate. Public shareholders will receive their pro-rata share of the Trust Account (approximately $7.92 per share as of March 31, 2009).
• Working Capital: The company has $77,187 in cash outside the trust to fund operations. It may use up to $700,000 (plus an additional $350,000 if approved) of interest earned on the Trust Account for working capital. Management does not currently anticipate needing to raise additional funds for operations but may need to raise capital to consummate a business combination.
• Related Party Transactions: The company pays $7,500 per month to a related party for office space and administrative services. Founders and affiliates hold private placement warrants that expire worthless if no business combination occurs.
• Going Concern: The financial statements do not include adjustments that might be necessary if the company is unable to continue as a going concern and is required to liquidate.

Investor Verification Checklist

• Trust Account Balance: Verify the current balance of the Trust Account ($33.8M) and the per-share redemption value ($7.92) to assess liquidation value.
• Extension Status: Confirm whether the company has entered into a letter of intent or definitive agreement to extend the deadline beyond September 12, 2009.
• Operating Cash Runway: Assess if the remaining $77,187 in operating cash is sufficient to cover expenses until the liquidation deadline or a business combination.
• Deferred Fees: Note the $830,903 in deferred underwriting fees payable only upon a successful business combination.
• Share Redemption Rights: Review the terms under which public shareholders can redeem shares for cash if they vote against a proposed business combination or extension.