Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
Note 1 - Organization, Plan of Business
Operations
Origo Acquisition Corporation,
formerly known as CB Pharma Acquisition Corp. (the “Company”), was incorporated in the Cayman Islands on August 26,
2014 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, share purchase,
recapitalization, reorganization or other similar business combination, one or more businesses or entities (a “Business Combination”).
The Company’s effort to identify a prospective target business is not limited to a particular industry or geographic region
of the world.
All activity through August
31, 2016 relates to the Company’s formation, the initial public offering (“Initial Public Offering”) as defined
below and a search for a Business Combination candidate. On December 12, 2014, the Company changed its fiscal year end from December
31 to November 30. The Company is an early stage and emerging growth company and, as such, the Company is subject to
all of the risks associated with early stage and emerging growth companies.
The registration statement
for the Company’s Initial Public Offering was declared effective on December 12, 2014. The Company consummated the Initial
Public Offering of 4,000,000 units (“Units”) at $10.00 per Unit on December 17, 2014, generating gross proceeds of
$40 million (Note 3). On December 24, 2014, the Company consummated the closing of the sale of 200,000 additional Units upon receiving
notice of EarlyBirdCapital, Inc.’s (“EBC”), the representative of the underwriters in the Initial Public Offering
election to exercise its over-allotment option, generated an additional gross proceeds of $2 million.
Simultaneously with the
closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 285,000
units (“Private Placement Units”) at a price of $10.00 per Unit, of which 265,000 Private Placement Units were sold
to Fortress Biotech, Inc. (“Fortress”), formerly known as Coronado Biosciences, Inc., an affiliate of the Company’s
former executive officers and the holder of a majority of the Company’s Ordinary Shares prior to the Initial Public Offering,
and 20,000 Private Placement Units were sold to EBC, generating an aggregate of $2.85 million in gross proceeds (Note 4). Following
the exercise of the over-allotment, the Company also consummated a simultaneous Private Placement of an additional 1,000 Private
Placement Units at a price of $10.00 per Unit to EBC on December 24, 2014, generated $10,000 in additional gross proceeds.
An aggregate amount of
approximately $42.85 million (approximately $10.20 per Unit) from the net proceeds of the sale of the Units in the Initial Public
Offering, the over-allotment, and the Private Placement Units, net of fees of approximately $1.84 million associated with the Initial
Public Offering, inclusive of approximately $1.37 million of underwriting fees, was placed in a trust account (“Trust Account”)
immediately after the sales and invested in U.S. government treasury bills. As of August 31, 2016, the amount held in Trust was reduced to approximately $32.8 million in connection with the Extension
as discussed below.
The Company’s management
has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private
Placement, although substantially all of the net proceeds are intended to be applied to consummating a Business Combination.
On June 10, 2016, the
Company held an extraordinary general meeting of shareholders (the “Meeting”). At the Meeting, the shareholders approved
each of the following items: (i) an amendment to the Company’s Amended and Restated Memorandum and Articles of Association
(the “Charter”) to extend the date by which the Company has to consummate a business combination (the “Extension”)
from June 12, 2016 to December 12, 2016, (ii) an amendment to the Charter to allow the holders of the Company’s ordinary
shares issued in the Company’s Initial Public Offering to elect to convert their public shares into their pro rata portion
of the funds held in the Trust Account, as defined below, if the Extension is approved, and (iii) to change the Company’s
name from “CB Pharma Acquisition Corp.” to “Origo Acquisition Corporation”. Under Cayman Islands law, the
amendments to the Charter took effect upon their approval. Accordingly, the Company now has until December 12, 2016 to consummate
an initial Business Combination.
In connection with the
Extension, effective as of June 10, 2016, (i) each of Lindsay A. Rosenwald, Michael Weiss, George Avgerinos, Adam J. Chill, Arthur
A. Kornbluth and Neil Herskowitz resigned from his position as an officer and/or director of the Company and (ii) Edward J. Fred
and Jose M. Aldeanueva were appointed as Chief Executive Officer and President and Chief Financial Officer, Secretary and Treasurer,
respectively, of the Company and Edward J. Fred, Jose M. Aldeanueva, Stephen Pudles, Jeffrey J. Gutovich and Barry Rodgers became
directors of the Company. On May 20, 2016, the Initial Shares (as defined below) were transferred to the new management in connection
with the resignation of the then-officers and directors of the Company upon the consummation of the Extension.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
At the Meeting, shareholders
holding 1,054,401 public shares exercised their right to convert such public shares into a pro rata portion of the Trust Account.
As a result, an aggregate of approximately $10.76 million (or approximately $10.20 per share) were removed from the Trust Account
to pay such holders. Because the Extension amendment was approved, as indicated in the Company’s proxy statement relating
to the Meeting, the new management of the Company provided a loan to the Company of $0.20 for each public share that was not converted,
for an aggregate amount of approximately $629,000, and deposited in the Trust Account. As a result, as of August 31, 2016, the
Company currently has approximately $32.8 million in Trust Account, and the conversion amount per share in any subsequent Business
Combination or liquidation will be approximately $10.44 per share.
The Company’s new
Chief Executive Officer has agreed that he will be personally liable under certain circumstances to ensure that the proceeds in
the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by the Company
for service rendered, contracted for or products sold to the Company. However, such officer may not be able to satisfy those obligations
should they arise. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting
due diligence on prospective acquisitions and continuing general and administrative expenses. In addition, interest income earned
on the funds in the Trust Account may be released to the Company to pay its income or other tax obligations, and working capital
requirements. With these exceptions, expenses incurred by the Company may be paid prior to a Business Combination only from the
net proceeds of the Initial Public Offering not held in the Trust Account; provided, however, that in order to meet its working
capital needs following the consummation of the Initial Public Offering, the Company’s shareholders prior to the Initial
Public Offering, including their subsequent transferees (collectively the “Initial Shareholders”), officers and directors
or their affiliates (including Fortress) may, but are not obligated to, loan the Company funds, from time to time or at any time,
in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes
would either be paid upon consummation of the Company’s initial Business Combination, without interest, or, at the lender’s
discretion, converted upon consummation of the Company’s Business Combination into additional
Private Placement Units at a price of $10.00 per Unit. If the Company does not complete a Business Combination, the loans would
not be repaid.
The Company will either
seek shareholder approval of any Business Combination at a meeting called for such purpose at which holders of the outstanding
Ordinary Shares sold in the Initial Public Offering (“Public Shareholders”) may seek to convert such shares (“Public
Shares”) into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due
but not yet paid, or provide Public Shareholders with the opportunity to sell their Public Shares to the Company by means of a
tender offer for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less any
taxes then due but not yet paid. The Company will proceed with a Business Combination only if it will have net tangible assets
of at least $5,000,001 upon consummation of the Business Combination and, solely if shareholder approval is sought, a majority
of the outstanding Ordinary Shares of the Company voted, are voted in favor of the Business Combination. Notwithstanding the foregoing,
a Public Shareholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group”
(as defined in Section 13(d) (3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 30% or
more of the Ordinary Shares sold in the Initial Public Offering. Accordingly, all shares purchased by a holder in excess of 30%
of the shares sold in the Initial Public Offering will not be converted to cash. In connection with any shareholder vote required
to approve any Business Combination, the Initial Shareholders have agreed (i) to vote any of their respective shares, including
the 1,050,000 Ordinary Shares issued in connection with the organization of the Company (the “Initial Shares”), in
favor of the initial Business Combination and (ii) not to convert such respective shares into a pro rata portion of the Trust Account
or seek to sell their shares in connection with any tender offer the Company engages in.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
If the Company has
not completed a Business Combination by December 12, 2016, pursuant to the amended Charter, it will trigger the automatic
liquidation of the Trust Account and the voluntary liquidation of the Company. If the Company is required to liquidate, Public Shareholders are entitled to share ratably in the Trust Account, including any interest,
and any net assets remaining available for distribution to them after payment of liabilities. The Initial Shareholders have
agreed to waive their rights to share in any distribution with respect to their Initial Shares.
Liquidity
As of August
31, 2016, the Company had a balance of cash and cash equivalents of approximately $233,000, which excludes interest income
available to the Company for working capital purpose of approximately $110,000 from the Company's investments in the Trust account.
Through August 31, 2016, the Company's liquidity needs were satisfied through receipt of approximately $407,000 from the net
proceeds of the sale of the Units in the Initial Public Offering, the over-allotment, and the Private Placement Units held
outside of the Trust Account, and loans in the form of convertible promissory notes, including an aggregate principal amount
of $1 million from the new management following the Extension, of which $370,880 was provided for the Company’s working
capital needs (see Note 5), and $325,000 from Fortress. The Company re-paid approximately $32,000 to the new management in
June 2016. In addition to these convertible notes, Fortress paid for professional services provided to the Company in the
amount of $7,715 and had deferred payment of their administrative service fee of $175,000 through May 2016. On May 20, 2016,
Fortress agreed to converted the deferred administrative service fee to capital.
The Company intends to use
substantially all of the net proceeds of the Initial Public Offering, including the funds held in the Trust Account, to acquire
a target business or businesses and to pay for expenses relating thereto, upon consummation of the initial Business Combination.
To the extent that the Company's capital stock is used in whole or in part as consideration to affect the initial Business Combination,
the remaining proceeds held in the Trust Account as well as any other net proceeds not expended will be used as working capital
to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing
or expanding the target business' operations, for strategic acquisitions and for marketing, research and development of existing
or new products. Such funds could also be used to repay any operating expenses or finders' fees which the Company had incurred
prior to the completion of the initial Business Combination if the funds available to us outside of the Trust Account were insufficient
to cover such expenses.
Based on the foregoing,
management believes that the Company will have sufficient working capital to meet the Company's needs through the earlier of consummation
of a Business Combination or December 12, 2016. Over this time period, the Company will be using these funds for paying existing
accounts payable, identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective
target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate
documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating
and consummating the Business Combination.
Note 2 - Significant Accounting Policies
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.
GAAP”) for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission
(the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion
of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating
results for the three and nine months ended August 31, 2016 are not necessarily indicative of the results that may be expected
for the year ending November 30, 2016. For further information, refer to the financial statements and footnotes thereto included
in the Company’s Annual Report on Form 10-K for the year ended November 30, 2015 filed with the SEC on February 29, 2016.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
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 of 1933, as amended (“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.
Cash and Cash Equivalents
The Company considers
all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
Cash and Marketable Securities Held in Trust Account
The amounts held in
the Trust Account represent substantially all of the proceeds of the Initial Public Offering and are classified as restricted
assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination. As
of August 31, 2016, cash and marketable securities, which classified as trading securities, held in the Trust
Account consisted of approximately $32.1 million in mutual funds and approximately $629,000 in cash. At August 31, 2016,
there was approximately $110,000 of interest income held in the Trust Account available to be released to the Company.
Ordinary Shares Subject to Possible Conversion
The Company accounts for
its Ordinary Shares subject to possible conversion 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
features 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 features certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Ordinary Shares
subject to possible conversion at conversion value are presented as temporary equity, outside of the shareholders’ equity
section of the Company’s balance sheet.
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. At August 31, 2016, the Company had 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 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.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
Net Loss per Share
Loss per share is
computed by dividing net loss by the weighted-average number of Ordinary Shares outstanding during the period. An aggregate
of 2,557,018 and 3,698,656 Ordinary Shares subject to possible conversion at August 31, 2016 and 2015, respectively, have
been excluded from the calculation of basic loss per ordinary share since such Ordinary Shares, if redeemed, only participate
in their pro rata share of the earnings in the Trust Account. The Company has not considered the effect of (i) warrants sold in the
Public Offering and Private Placement to purchase 2,243,000 Ordinary Shares of the Company, (ii) rights to acquire 448,600
Ordinary Shares of the Company and (iii) 400,000 Ordinary Shares, warrants to purchase 200,000 Ordinary Shares and rights to
acquire 40,000 Ordinary Shares included in the unit purchase option sold to the underwriter, in the calculation of diluted
loss per share, since the exercise of the unit purchase option and warrants as well as the conversion of rights is contingent
on the occurrence of future events.
Use of Estimates
The preparation of financial
statements in conformity with U.S. 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 expenses during the reporting period. Actual results could differ from those estimates.
Income Taxes
The Company accounts for
income taxes under ASC Topic 740 “Income Taxes”. ASC 740 requires the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the
expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies
the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition
threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecoginition, classification, interest and penalties, accounting in
interim period, disclosure and transition. The Company determined that the Cayman Islands is its only major tax jurisdiction. Based
on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition
in the Company’s financial statements. Since the Company was incorporated on August 26, 2014, the evaluation was performed
for the 2014 and 2015 tax year, which will be the only period subject to examination upon filing of appropriate tax returns. The
Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments
that would result in a material changes to its financial position.
The Company’s policy
for recording interest and penalties associated with audits is to record such expense as a component of income tax expense. There
were no amounts accrued for penalties or interest as of August 31, 2016 and 2015. Management is currently unaware of any issues
under review that could result in significant payments, accruals or material deviations from its position.
Recent Accounting Pronouncements
Management does not believe
that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on
the accompanying financial statements.
Subsequent Events
The
Company evaluates subsequent events and transactions that occur after the Balance Sheet date up to the date these financial statements
were available to be issued. Based on the evaluation, the Company did not identify any subsequent event that would have
required adjustment or disclosure in the financial statements.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
Note 3 - Initial Public Offering
In December 2014, the
Company consummated the Initial Public Offering of 4,200,000 of its units (“Units”). Each Unit consists of one ordinary
share, $.0001 par value per share (“Ordinary Share”), one right (“Right”) to receive one-tenth of one Ordinary
Share upon consummation of the Company’s initial Business Combination and one warrant entitling the holder to purchase one-half
of one Ordinary Share (“Warrant”). The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds
of $42,000,000. Each Warrant entitles the holder to purchase one-half of one Ordinary Share at a price of $11.50 per full Ordinary
Share commencing on the later of the Company’s completion of its initial Business Combination or December 12, 2015, and expiring
five years from the completion of the Company’s initial Business Combination. The Company will not issue fractional shares.
As a result, investors must exercise Warrants in multiples of two Warrants in whole and not in part, at a price of $11.50 per full
share, subject to adjustment, to validly exercise the Warrants. The Company may redeem the Warrants at a price of $0.01 per Warrant
upon 30 days’ notice, only in the event that the last sale price of the Ordinary Shares is at least $24.00 per share for
any 20 trading days within a 30-trading day period (“30-Day Trading Period”) ending on the third day prior to the date
on which notice of redemption is given, provided there is a current registration statement in effect with respect to the Ordinary
Shares underlying such Warrants commencing five business days prior to the 30-Day Trading Period and continuing each day thereafter
until the date of redemption. If the Company redeems the Warrants as described above, management will have the option to require
all holders that wish to exercise Warrants to do so on a “cashless basis.” In accordance with the warrant agreement
relating to the Warrants issued in the Initial Public Offering the Company is only required to use its best efforts to maintain
the effectiveness of the registration statement covering the Warrants. If a registration statement is not effective within 90 days
following the consummation of a Business Combination, Warrant holders may, until such time as there is an effective registration
statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise Warrants
on a cashless basis pursuant to an available exemption from registration under the Securities Act of 1933, as amended. In the event
that a registration statement is not effective at the time of exercise or no exemption is available for a cashless exercise, the
holder of such Warrant shall not be entitled to exercise such Warrant for cash and in no event (whether in the case of a registration
statement being effective or otherwise) will the Company be required to net cash settle the Warrant exercise. Additionally, in
no event will the Company be required to net cash settle the Rights. If an initial Business Combination is not consummated, the
Rights and Warrants will expire and will be worthless.
Note 4 - Private Placement
Simultaneously with the
consummation of the Initial Public Offering, the Company consummated the Private Placement of 285,000 Private Placement Units at
a price of $10.00 per Private Placement Unit, generating total proceeds of $2.85 million. Of the Private Placement Units, 265,000
were purchased by an Initial Shareholder that was an affiliate of the Company’s former executive officers and 20,000 were
purchased by EBC, the representative of the underwriters of the Initial Public Offering. The Company consummated the sale of an
additional 1,000 Private Placement Units to EBC upon consummation of the over-allotment option, generating total proceeds of $10,000.
The Private Placement Units are identical to the Units sold in the Initial Public Offering, except the warrants included in the
Private Placement Units will be non-redeemable, may be exercised on a cashless basis and may be exercisable for unregistered Ordinary
Shares if the prospectus relating to the Ordinary Shares issuable upon exercise of the Warrants is not current and effective, in
each case so long as they continue to be held by the initial purchasers or their permitted transferees. The holders of the Private
Placement Units have agreed (A) to vote the Ordinary Shares included in the Private Placement Units (“Private Shares”)
in favor of any initial Business Combination, (B) not to propose, or vote in favor of, an amendment to the Company’s amended
and restated memorandum and articles of association with respect to the Company’s pre-Business Combination activities prior
to the consummation of such a Business Combination unless the Company provides dissenting public shareholders with the opportunity
to convert their public shares into the right to receive cash from the Company’s Trust Account in connection with any such
vote, (C) not to convert any Private Shares into the right to receive cash from the Trust Account in connection with a shareholder
vote to approve the Company’s initial Business Combination or a vote to amend the provisions of the Company’s amended
and restated memorandum and articles of association relating to shareholders’ rights or pre-Business Combination activity
and (D) that such Private Shares shall not participate in any liquidating distribution upon winding up if a Business Combination
is not consummated within the required time period. Additionally, the purchasers have agreed not to transfer, assign or sell any
of the Private Placement Units (except to certain permitted transferees) until the completion of the Company’s initial Business
Combination. The holders have agreed not to sell their shares to the Company in any tender offer in connection with the initial
Business Combination.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
Note 5 – Related Party Transactions
Initial Shares
In August 2014, the Company
issued 1,150,000 Initial Shares to the Initial Shareholders for an aggregate purchase price of $25,000. The Initial Shares included
an aggregate of up to 150,000 shares subject to compulsory repurchase for an aggregate purchase price of $0.01 to the extent that
the underwriters’ over-allotment option was not exercised in full or in part, so that the Initial Shareholders would collectively
own 20.0% of issued and outstanding shares after the Initial Public Offering (excluding the sale of the Private Placement Units).
On December 18, 2014, EBC notified the Company that it had elected to exercise a portion of the over-allotment option for 200,000
additional units at $10.00 per unit for an additional $2,000,000, The partial exercise resulted in a reduction of 50,000 Ordinary
Shares subject to compulsory repurchase resulting in a total of 100,000 Ordinary Shares being compulsory repurchased on January
5, 2015. On May 20, 2016, the Initial Shares were transferred to the new management in connection with the resignation of the then-officers
and directors of the Company upon the consummation of the Extension.
The Initial Shares are
identical to the Ordinary Shares included in the Units sold in the Initial Public Offering. However, the holders of the Initial
Shares have agreed (A) to vote their Initial Shares (as well as any shares acquired after the Initial Public Offering) in favor
of any proposed Business Combination, (B) not to propose, or vote in favor of, an amendment to the amended and restated memorandum
and articles of association with respect to pre-Business Combination activities prior to the consummation of such a Business Combination
unless the Company provides dissenting public shareholders with the opportunity to convert their public shares into the right to
receive cash from the Trust Account in connection with any such vote, (C) not to convert any Initial Shares (as well as any other
shares acquired after the Initial Public Offering) into the right to receive cash from the Trust Account in connection with a shareholder
vote to approve a proposed initial Business Combination (or sell any shares they hold to the Company in a tender offer in connection
with a proposed initial Business Combination) or a vote to amend the provisions of the amended and restated memorandum and articles
of association relating to shareholders’ rights or pre-Business Combination activity and (D) that the Initial Shares shall
not participate in any liquidating distribution upon winding up if a Business Combination is not consummated. Additionally, the
Initial Shareholders have agreed not to transfer, assign or sell any of the Initial Shares (except to certain permitted transferees)
until (1) with respect to 50% of the Initial Shares, the earlier of one year after the date of the consummation of initial Business
Combination and the date on which the closing price of Ordinary Shares equals or exceeds $12.50 per share (as adjusted for share
splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing
after initial Business Combination and (2) with respect to the remaining 50% of the Initial Shares, one year after the date of
the consummation of initial Business Combination, or earlier, in either case, if, subsequent to initial Business Combination, the
Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of shareholders having
the right to exchange their Ordinary Shares for cash, securities or other property.
Notes Payable and Advance to Related
Party
As of August 31, 2016,
the Company had issued an aggregate of $325,000 convertible promissory notes to Fortress to evidence loans made by such shareholder
to the Company. All of these loans are unsecured and non-interest bearing and are due upon consummation of a Business Combination.
The holder has agreed to convert the principal balance of the convertible promissory notes into 32,500 Units at a price of $10.00
per Unit upon consummation of a Business Combination. The terms of the units into which the convertible promissory note will convert
will be identical to the Private Placement Units.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
The new management loaned
the Company an aggregate of $1 million in June 2016. Of these, an aggregate amount of $629,120, or $0.20 for each Public Share
that was not converted in connection with the Extension, was deposited in the Trust Account, and the remaining amount of $370,880
was loaned to the Company for working capital needs. The loan from the new management is evidenced by a promissory note, and is
unsecured, non-interest bearing, and payable at the consummation of a Business Combination. Upon consummation of a Business Combination,
up to $175,000 of the principal balance of such note may be converted, at the holders’ option, into Units at a price of $10.00
per Unit. The terms of the units into which the convertible promissory note will convert will be identical to the Private Placement
Units. If new management converts the entire $175,000 of the principal balance of the note, they would receive 17,500 Units. If
a Business Combination is not consummated, the note will not be repaid by the Company and all amounts owed thereunder by the Company
will be forgiven, except to the extent that the Company had funds available to it outside of the Trust Account. The Company re-paid approximately $32,000 to the new management in June 2016.
Administrative Service Fee
Commencing
on December 12, 2014, the Company had agreed to pay an Initial Shareholder a monthly fee of $10,000 for general
and administrative services. As of May 19, 2016, amount due to such Initial Shareholder was approximately $183,000; of
which approximately $175,000 represents the accrued service fee and $7,715 represents invoices of the Company paid by such
Initial Shareholder. On May 20, 2016, this arrangement was terminated, and such Initial Shareholder agreed that all amounts
owed under such arrangement, or $175,000, were contributed to capital.
Note 6 - Commitments
Material Agreements
Underwriting Agreement
On December 12, 2014,
the Company entered into an agreement with EBC (“Underwriting Agreement”). The Underwriting Agreement required the
Company to pay an underwriting discount of 3.25% of the gross proceeds of the Initial Public Offering as an underwriting discount.
The Company has further engaged EBC to assist the Company with its initial Business Combination. Pursuant to this arrangement,
the Company anticipates that the underwriter will assist the Company in holding meetings with shareholders to discuss the potential
Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested
in purchasing the Company’s securities, assist the Company in obtaining shareholder approval for the Business Combination
and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will
pay EBC a cash fee of 4% of the gross proceeds of the Initial Public Offering for such services upon the consummation of its initial
Business Combination (exclusive of any applicable finders’ fees which might become payable).
Other agreements
In August 2016,
the Company entered into an agreement with a legal counsel to assist the Company with potential business combination and related securities and corporate work. The agreement called for a retainer of $37,500 and the Company has
agreed to pay a portion
of the invoices and the remaining amount will be deferred until the consummation of the Business
Combination. In addition, the Company agreed to pay a monthly fee to the counsel to review the periodic reports.
Origo Acquisition Corporation
(formerly CB Pharma Acquisition Corp.)
Notes to Condensed Financial Statements
August 31, 2016
(Unaudited)
Purchase Option
The Company sold to EBC,
for $100, a unit purchase option to purchase up to a total of 400,000 units exercisable at $11.00 per unit (or an aggregate exercise
price of $4,400,000) commencing on the consummation of a Business Combination. The unit purchase option expires on December 12,
2019. The units issuable upon exercise of this option are identical to the Units being offered in the Initial Public Offering.
Accordingly, after the Business Combination, the purchase option will be to purchase 440,000 Ordinary Shares (which include 40,000
Ordinary Shares to be issued for the rights included in the units) and 400,000 Warrants to purchase 200,000 Ordinary Shares. The
Company has agreed to grant to the holders of the unit purchase option, demand and “piggy back” registration rights
for periods of five and seven years, respectively, from the effective date of the Initial Public Offering, including securities
directly and indirectly issuable upon exercise of the unit purchase option.
The Company accounted
for the fair value of the unit purchase option, inclusive of the receipt of a $100 cash payment, as an expense of the Initial Public
Offering resulting in a charge directly to shareholders’ equity. The Company estimated that the fair value of this unit purchase
option is approximately $2.92 million (or $7.30 per unit) using the Black-Scholes option-pricing model. The fair value of the unit
purchase option granted to the EBC is estimated as of the date of grant using the following assumptions: (1) expected volatility
of 99.10%, (2) risk-free interest rate of 1.53% and (3) expected life of five years. The unit purchase option may be exercised
for cash or on a “cashless” basis, at the holder’s option (except in the case of a forced cashless exercise upon
the Company’s redemption of the Warrants, as described in Note 3), such that the holder may use the appreciated value of
the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying Warrants and
the market price of the Units and underlying Ordinary Shares) to exercise the unit purchase option without the payment of any cash.
The Company will have no obligation to net cash settle the exercise of the unit purchase option or the Warrants underlying the
unit purchase option. The holder of the unit purchase option will not be entitled to exercise the unit purchase option or the Warrants
underlying the unit purchase option unless a registration statement covering the securities underlying the unit purchase option
is effective or an exemption from registration is available. If the holder is unable to exercise the unit purchase option or underlying
Warrants, the unit purchase option or Warrants, as applicable, will expire worthless.
Registration Rights
The Initial Shareholders
are entitled to registration rights with respect to their initial shares (and any securities issued upon conversion of working
capital loans) and the purchasers of the Private Placement Units are entitled to registration rights with respect to the Private
Placement Units (and underlying securities), pursuant to an agreement dated December 12, 2014. The holders of the majority of the
initial shares are entitled to demand that the Company register these shares at any time commencing three months prior to the first
anniversary of the consummation of a Business Combination. The holders of the Private Placement Units (or underlying securities)
are entitled to demand that the Company register these securities at any time after the Company consummates a Business Combination.
In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the Company’s
consummation of a Business Combination.
Note 7 - Shareholder Equity
Preferred Shares
The Company is authorized
to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may
be determined from time to time by the Company’s board of directors.
As of August 31, 2016,
there are no preferred shares issued or outstanding.
Ordinary Shares
The Company is authorized
to issue 100,000,000 Ordinary Shares with a par value of $0.0001 per share.
As of November 30,
2015, the Company has an aggregate of 5,536,000 Ordinary Shares outstanding. Of these, an aggregate of 3,688,039 Ordinary
Shares subject to possible conversion classified as temporary equity in the accompanying Balance Sheet. At the Meeting on
June 10, 2016, shareholders holding 1,054,401 public shares exercised their right to convert such public shares into a pro
rata portion of the Trust Account (see Note 1). As a result, the Company has an aggregate of 4,481,599 Ordinary Shares
outstanding as of August 31, 2016. Of these, an aggregate of 2,557,018 Ordinary Shares subject to possible conversion
classified as temporary equity in the accompanying Balance Sheet