Notes to Condensed Interim Financial Statements
(unaudited)
May 31, 2017
1
.
Nature of Operations
Electrum Special Acquisition Corporation
(the ‘‘Company,’’ ‘‘we,’’ ‘‘our’’ or ‘‘us’’)
is a blank check company incorporated in the British Virgin Islands on December 12, 2014. The Company was formed for the purpose
of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets
of, entering into contractual arrangements, or engaging in any other similar business transaction, with one or more businesses
or entities (‘‘Business Combination’’). The Company has neither engaged in any operations nor generated
any operating revenue to date. The Company’s sponsor is ESAC Holdings LLC, a Delaware limited liability company (the ‘‘Sponsor’’).
The registration statement for the Company’s
initial public offering (the “Offering”) (as described in Note 4) was declared effective by the United States Securities
and Exchange Commission (“SEC”) on June 10, 2015. The Sponsor and an entity controlled by one of the Company’s
directors purchased, simultaneously with the closing of the Offering, an aggregate of $7,025,000 of warrants in a private placement
(Note 5).
Upon closing of the Offering and private
placement, $200,000,000 was placed in the Trust Account and may be invested in United States government treasury bills, notes or
bonds having a maturity of 180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated
under the Investment Company Act of 1940 and that invest solely in U.S. treasuries, as determined by the Company, until the earlier
of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account as described below.
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Offering, although substantially all of the net
proceeds of the Offering are intended to be generally applied toward consummating a Business Combination. Furthermore, there is
no assurance that the Company will be able to successfully effect a Business Combination. The Company intends to finance a Business
Combination in part with the Offering and the $7,025,000 private placement (see Note 4).
The Company will either (1) seek shareholder
approval of our initial Business Combination at a meeting called for such purpose at which shareholders may seek to redeem their
public shares, regardless of whether they vote for or against the proposed Business Combination, into their pro rata share of the
aggregate amount then on deposit in the Trust Account (net of taxes payable), or (2) provide our shareholders with the opportunity
to sell their public shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount
equal to their pro rata share of the aggregate amount then on deposit in the Trust Account (net of taxes payable), in each case
based on the number of public shares outstanding and subject to the limitations described herein. The decision as to whether we
will seek shareholder approval of our proposed Business Combination or allow shareholders to sell their shares to us in a tender
offer will be made by us, solely in our 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 us to seek shareholder approval. Unlike other blank check companies
which require shareholder votes and conduct proxy solicitations in conjunction with their initial Business Combinations and related
redemptions of public shares for cash upon consummation of such initial Business Combinations even when a vote is not required
by law, we will have the flexibility to avoid such shareholder vote and allow our shareholders to sell their shares pursuant to
the tender offer rules of the SEC. In that case, we will file tender offer documents with the SEC which will contain substantially
the same financial and other information about the initial Business Combination as is required under the SEC’s proxy rules.
We will consummate our initial Business Combination only if we have net tangible assets of at least $5,000,001 upon such consummation
and, solely if we seek shareholder approval, a majority of the outstanding ordinary shares voted are voted in favor of the Business
Combination.
1
.
Nature of Operations – (continued)
We initially had until June 16, 2017 to
consummate our initial Business Combination. This date has now been extended to October 8, 2017 as described in Note 2 below. If
we are unable to consummate our initial Business Combination within such time period, we will distribute the aggregate amount then
on deposit in the Trust Account pro rata to our public shareholders by way of the redemption of their shares and will cease all
operations except for the purposes of winding up of our affairs, as further described herein. In such event, our warrants will
expire worthless. We expect the per share redemption price to be $10.00 per ordinary share, without taking into account any interest
earned on such funds. However, we may not be able to distribute such amounts as a result of claims of creditors which may take
priority over the claims of our public shareholders. In that case, it may be possible that the per-share value of the residual
assets remaining available for distribution will be less than the initial public offering price per Unit in the Offering.
Section 102(b)(1) of the Jumpstart Our
Business Startups Act of 2012 (the ‘‘JOBS Act’’) permits emerging growth companies to delay complying with
new or revised financial accounting standards that do not yet apply to 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). 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. We have 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, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.
2. Extension and Trust Amendment
On June 5, 2017, at the Special Meeting
of Shareholders (the “Special Meeting”), the Company’s shareholders approved the following items: (i) an amendment
(the “Extension Amendment”) to the Company’s Memorandum and Articles of Association to extend the date by which
the Company has to consummate a Business Combination (the “Extension”) for an additional 120 days, from June 10, 2017
to October 8, 2017 (the “Extended Date”); and (ii) an amendment (the “Trust Amendment”) to the investment
management trust agreement, dated June 10, 2015, by and between the Company and Continental Stock Transfer & Trust Company
(“Continental”), to extend the date on which to commence liquidating the Trust Account in the event the Company has
not consummated a Business Combination by the Extended Date. The affirmative vote of at least 65% of the Company’s shares
attending the Special Meeting in person or by proxy and voting on the Extension Amendment was required to approve the Extension
Amendment, and the affirmative vote of at least a majority of the Company’s shares attending the Special Meeting in person
or by proxy and voting on the Trust Amendment was required to approve the Trust Amendment. The purpose of the Extension is to allow
the Company more time to complete a Business Combination.
Following redemptions of 3,031,985 of the
Company’s shares in connection with the Extension, a total of approximately $170.7 million will remain in the Trust Account.
In connection with the Extension, the Sponsor has agreed to contribute to the Company as a loan $0.025 for each public share that
was not redeemed in connection with the shareholder vote to approve the Extension, for each calendar month, or portion thereof,
that is needed by the Company to complete a Business Combination (the “Contribution”) by the Extended Date. The Contribution
will increase the pro rata portion of the funds available in the Trust Account in the event of the consummation of a Business Combination
or a liquidation from approximately $10.05 per share to approximately $10.15 per share, assuming the Company takes the entire time
through October 8, 2017 to complete a Business Combination. The first Contribution was deposited into the Trust Account on June
16, 2017 to fund the calendar month through July 10, 2017. If the Sponsor determines not to continue extending for additional calendar
months, its obligation to make additional Contributions will terminate and the Company will dissolve and liquidate in accordance
with its Amended and Restated Memorandum and Articles of Association.
On June 6, 2017, in connection with the
Special Meeting, the Company and Continental entered into the Trust Amendment, pursuant to which the date on which to commence
liquidation of the Trust Account established in connection with the Company’s initial public offering in the event the Company
has not consummated a Business Combination was extended from June 10, 2017 to October 8, 2017.
3. Summary of Significant Accounting
Policies
Basis of presentation
The accompanying unaudited interim financial
statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America
(‘‘GAAP’’) for interim information and in accordance with the instructions to Form 10-Q and Article 8 and
Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include
all of the information and notes required by GAAP for a complete financial statement presentation. In the opinion of management,
the interim financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a
fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results
are not necessarily indicative of results for a full year.
Liquidation and Going Concern
If the Company does not complete a Business
Combination by October 8, 2017, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding
public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right
to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining holders of ordinary shares and our board of directors, dissolve
and liquidate, subject (in the case of (ii) and (iii) above) to our obligations to provide for claims of creditors and the requirements
of other applicable law. The holders of the insider shares will not participate in any redemption distribution. Holders of warrants
will receive no proceeds in connection with
the redemption or liquidation.
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.
These conditions raise substantial doubt
about our ability to continue as a going concern.
Net earnings (loss) per ordinary share
The Company complies with the accounting
and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net earnings (loss) per ordinary share is
computed by dividing net income (loss) applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding
for the period. At May 31, 2017 and May 31, 2016, the Company did not have any dilutive securities and other contracts that could,
potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. The Company has not
considered the effect of warrants to purchase ordinary shares in the calculation of diluted loss per share, since the exercise
of the warrants is contingent upon the occurrence of future events. As a result, diluted earnings (loss) per ordinary share is
the same as basic earnings (loss) per ordinary share for the periods presented.
Concentration of credit risk
Financial instruments that potentially
subject the Company to concentration 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.
Fair value of financial instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under FASB ASC Topic 820, ‘‘Fair Value Measurements and Disclosures,’’
approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
3. Summary of Significant Accounting
Policies – (continued)
Use of estimates
The preparation of financial statements
in conformity with GAAP requires 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 and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
Cash and securities held in Trust Account
The assets held in the Trust Account are
held in cash and U.S. Treasury Bills.
Ordinary shares subject to possible
redemption
The Company accounts for its ordinary shares
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as
a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that
feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are
classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at May 31, 2017
and November 30, 2016, the ordinary shares subject to possible redemption in the amount of $189,338,899 and $189,251,867 (or 18,933,890
and 18,925,187 shares), respectively, are presented as temporary equity, outside of the shareholders’ equity section of the
Company’s balance sheets. As described in Note 2, in connection with the Extension 3,031,985 of the Company’s outstanding
ordinary shares were redeemed subsequent to May 31, 2017.
Income taxes
The Company complies with the accounting
and reporting requirements of FASB ASC Topic 740, ‘‘Income Taxes,’’ which requires an asset and liability
approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts,
based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC Topic 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. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as
income tax expense. There were no unrecognized tax benefits as of May 31, 2017 and November 30, 2016. No amounts were accrued for
the payment of interest and penalties at May 31, 2017 and November 30, 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.
The Company may be subject to potential
examination by U.S. federal, U.S. state or foreign jurisdiction authorities in the areas of income taxes. These potential examinations
may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance
with U.S. federal, U.S. state and foreign tax laws. The Company’s management does not expect that the total amount of unrecognized
tax benefits will materially change over the next twelve months.
3. Summary of Significant Accounting
Policies – (continued)
Accounts payable, accrued expenses and
due to affiliate
Accounts payable and accrued expenses represent
amounts the Company owes to its vendors as of the balance sheet date. Due to affiliate represents general and administrative costs,
professional fees and due diligence costs paid by an affiliate on behalf of the Company. These advances are non-interest bearing,
unsecured and payable on demand.
Recently issued accounting standards
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.
4. Public Offering
On June 16, 2015, the Company sold 20,000,000
units at a price of $10.00 per unit (“Public Units”) in the Offering, including the sale of units upon partial exercise
of the underwriters’ overallotment option (see Note 2 which describes the redemptions that have occurred subsequent to May
31, 2017). Each Public Unit consists of one of the Company’s ordinary shares, no par value, and one warrant. Each warrant
entitles the registered holder to purchase one-half of one ordinary share at a price of $5.75 per half share, subject to adjustment
as discussed below, at any time commencing on the later of 12 months from the closing of the Offering or 30 days after the completion
of our initial Business Combination. Warrants may be exercised only for a whole number of ordinary shares. No fractional shares
will be issued upon exercise of the warrants. The warrants will expire five years after the completion of an initial Business Combination,
or earlier upon redemption, as described below.
Notwithstanding the foregoing, no public
warrants will be exercisable for cash unless we have an effective and current registration statement covering the ordinary shares
issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing,
if a registration statement covering the ordinary shares issuable upon exercise of the public warrants is not effective within
a specified period following the consummation of our initial Business Combination, warrant holders may, until such time as there
is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement,
exercise warrants on a cashless basis in the same manner as if we called the warrants for redemption and required all holders to
exercise their warrants on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering
the warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary
shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market
value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average
reported last sale price of the ordinary shares for the 10 trading days ending on the trading day prior to the date of exercise.
There will be no net cash settlement of the warrants under any circumstances.
In connection with the Offering, the Sponsor
and its designees, and an entity controlled by one of our directors, purchased from us an aggregate of 14,050,000 warrants (‘‘Private
Warrants’’) at $0.50 per warrant (for a total purchase price of $7,025,000). These purchases took place on a private
placement basis simultaneously with the consummation of the Offering. Each Private Warrant is exercisable to purchase one-half
of one ordinary share at $5.75 per half share. All of the proceeds received from this private placement were placed in the Trust
Account.
The Private Warrants are identical to the
warrants included in the units sold in the Offering except the Private Warrants are non-redeemable and may be exercised on a cashless
basis, at the holder’s option, in each case so long as they continue to be held by the initial purchasers or their permitted
transferees. The purchasers have also agreed not to transfer, assign or sell any of the Private Warrants or underlying securities
(except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions
as the permitted transferees of the Private Warrants must agree to, each as described below) until 30 days after the completion
of our initial Business Combination.
5. Related Party Transactions
On April 8, 2015, our Sponsor subscribed
for an aggregate of 3,737,500 of our ordinary shares (‘‘Insider Shares’’) for an aggregate purchase price
of $25,000, or approximately $0.00669 per share.
On April 22, 2015, the Company effected
a bonus share issue of 0.03655250836 ordinary shares for each outstanding ordinary share, resulting in the Sponsor owning an aggregate
of 3,874,115 Insider Shares. Also on April 22, 2015, our four independent directors purchased an aggregate of 92,000 of our Insider
Shares, and an entity controlled by another director purchased an aggregate of 346,385 of our Insider Shares, for an aggregate
purchase price of approximately $2,932, or approximately $0.00669 per share. The Company accounted for the bonus share issue as
a share dividend in form because the total issuance of additional shares was less than 20% of the number of previously outstanding
shares.
On June 10, 2015, the entity controlled
by a director transferred 45,994 of its 346,385 shares to the Sponsor for a price equal to the original subscription cost of approximately
$0.00669 per share, resulting in the Sponsor owning 3,920,109 Insider Shares. Also on June 10, 2015, the Company effected a bonus
share issue of 0.16666666666667 ordinary shares for each outstanding ordinary share, resulting in the Sponsor owning an aggregate
of 4,573,461 Insider Shares, each of the four independent directors owning 26,833 Insider Shares, and an entity controlled by another
director owning 350,457 Insider Shares. The Company accounted for this bonus share issue as a share dividend in form because the
total issuance of additional shares was less than 20% of the number of previously outstanding shares.
On June 16, 2015, the Company’s initial
shareholders forfeited an aggregate of 31,250 Insider Shares, so that the initial shareholders own 20.0% of the Company’s
issued and outstanding ordinary shares after the Offering.
The Insider Shares are identical to the
ordinary shares included in the units sold in the Offering. However, the holders have agreed (A) to vote the Insider Shares in
favor of any proposed Business Combination, (B) not to propose, or vote in favor of, an amendment to our memorandum and articles
of association with respect to our pre-Business Combination activities prior to the consummation of such a Business Combination
unless we provide dissenting public shareholders with the opportunity to redeem their public shares in connection with any such
vote, (C) not to redeem any shares (including the Insider Shares) into the right to receive cash from the Trust Account in connection
with a shareholder vote to approve our proposed initial Business Combination (or sell any shares they hold to us in a tender offer
in connection with a proposed initial Business Combination) or a vote to amend the provisions of our memorandum and articles of
association relating to shareholders’ rights or pre-Business Combination activity and (D) that the Insider Shares shall not
participate in any liquidating distribution upon winding up if a Business Combination is not consummated. Additionally, the holders
have agreed not to transfer, assign or sell any of the Insider Shares (except to certain permitted transferees) until the earlier
of (i) one year after the date of the consummation of our initial Business Combination or (ii) if after 150 days after our initial
Business Combination, the closing price of our ordinary shares equals or exceeds $12.00 per share (as adjusted for stock splits,
stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30 trading day period. Notwithstanding
the foregoing, these transfer restrictions will be removed earlier if, after our initial Business Combination, we consummate a
subsequent (i) liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having
the right to exchange their ordinary shares for cash, securities or other property or (ii) consolidation, merger or other change
in the majority of our management team.
In addition, our Sponsor and an entity
controlled by one of our directors purchased an aggregate of 14,050,000 Private Warrants at a price of $0.50 per warrant ($7,025,000
in the aggregate) in a private placement that occurred simultaneously with the closing of the Offering. The proceeds from the private
placement of the Private Warrants from the Offering were placed in the Trust Account.
The Private Warrants are identical to the
warrants included in the units sold in the Offering except the Private Warrants are non-redeemable and may be exercised on a cashless
basis, at the holder’s option, in each case so long as they continue to be held by the initial purchasers or their permitted
transferees. The purchasers have also agreed not to transfer, assign or sell any of the Private Warrants or underlying securities
(except to the same permitted transferees as the Insider Shares and provided the transferees agree to the same terms and restrictions
as the permitted transferees of the Private Warrants must agree to, each as described above) until 30 days after the completion
of our initial Business Combination.
If the Company does not complete the Business
Combination, then the Private Placement Warrants proceeds will be part of the liquidation distribution to the public shareholders
and the Private Placement Warrants will expire worthless.
5. Related Party Transactions (continued)
As of May 31, 2017 and November 30, 2016,
an affiliate of the Sponsor is owed $209,630 and $30,257, respectively, for general and administrative costs, due diligence costs
and professional fees paid on our behalf. These advances are non-interest bearing and unsecured.
Commencing on June 10, 2015, the date that
our securities were first listed on Nasdaq, we have agreed to pay an affiliate of the Sponsor a total of $10,000 per month for
general and administrative services including office space, utilities and secretarial support. For the three months ended May 31,
2017 and May 31, 2016 total fees paid under this agreement were $30,000 each period. For the six months ended May 31, 2017 and
May 31, 2016 total fees paid under this agreement were $60,000 each period.
On April 18, 2017, the Company entered
into a promissory note (the “Note”) with Electrum Strategic Opportunities Fund L.P., the majority owner of the Sponsor.
The Company can borrow up to $200,000 under the terms of the Note. Any outstanding principal is due at the time the Company consummates
the Business Combination and no interest is charged on the unpaid principal balance. As of May 31, 2017 nothing has been borrowed
under the Note.
6. Deferred Underwriting Compensation
The Company is committed to pay deferred
underwriting compensation (“Deferred Discount”) totaling $6,750,000 (approximately 3.375%) of the gross offering proceeds
of the Offering, to the underwriters upon the Company’s consummation of the Business Combination. The underwriters are not
entitled to any interest accrued on the Deferred Discount, and no Deferred Discount is payable to the underwriters if there is
no Business Combination.
7. Trust Account and Fair Value Measurements
Trust Account
A total of $200,000,000, which includes
$192,975,000 of the net proceeds from the Offering and $7,025,000 from the sale of the Private Warrants, has been placed in the
Trust Account. As of May 31, 2017 and November 30, 2016, the balance in the Trust Account was $201,352,260 and $200,815,168, respectively.
As of May 31, 2017, the Company’s
Trust Account consisted of $201,303,468 in U.S. Treasury Bills, $19,139 in accrued interest and $29,653 in cash. As of November
30, 2016, the Company’s Trust Account consisted of $200,478,941 in U.S. Treasury Bills, $332,951 in accrued interest and
$3,276 in cash. The Company classifies its U. S. Treasury 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 May 31, 2017 and November 30, 2016 balance sheets and adjusted for the amortization or accretion of premiums
or discounts.
As discussed in Note 2, the Trust Amendment
extended the date on which to commence liquidating the Trust Account in the event the Company has not consummated a Business Combination
from June 10, 2017 to October 8, 2017. In connection with the Extension, 3,031,985 of the Company’s outstanding ordinary
shares were redeemed subsequent to May 31, 2017, which left approximately $170.7 million in the Trust Account.
Fair Value Measurements
The Company complies with ASC 820, “Fair
Value Measurement”, 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.
7. Trust Account and Fair Value Measurements
(continued)
The following table presents information
about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of May 31, 2017 and November
30, 2016, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets
or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest
rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability,
and includes situations where there is little, if any, market activity for the asset or liability.
The gross holding gains and fair value
of held-to-maturity securities at May 31, 2017 and November 30, 2016 is as follows:
|
|
|
Held-To-Maturity
|
|
Amortized Cost
|
|
|
Gross
Holding
Gains
|
|
|
Fair Value
|
|
|
At May 31, 2017
|
|
U.S. Treasury Securities (Mature on 6/01/2017)
|
|
$
|
201,322,607
|
|
|
$
|
2,393
|
|
|
$
|
201,325,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At November 30, 2016
|
|
U.S. Treasury Securities
|
|
$
|
200,811,892
|
|
|
$
|
6,863
|
|
|
$
|
200,818,755
|
|
8. Shareholders’ Equity
Ordinary Shares
The Company is authorized to issue an unlimited
number of ordinary shares with no par value. At May 31, 2017 and November 30, 2016, there were 25,000,000 shares issued and outstanding,
which includes 18,933,890 and 18,925,187 shares subject to possible redemption, respectively. See Note 2 for redemptions made subsequent
to May 31, 2017.
Preferred Shares
The Company is authorized to issue an unlimited
number of preferred shares with no par value divided into five classes (Class A — Class E). At May 31, 2017 and November
30, 2016, there were no preferred shares issued and outstanding. The rights, privileges, restrictions and conditions of all five
classes of preferred shares have not been determined and, accordingly, these features will be attached to each class as they are
issued, through amendments to the Articles of Association.
9. Subsequent Events
The Extension and Trust Amendment which
occurred subsequent to May 31, 2017 are described in Note 2.
