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QPAC > SEC Filings for QPAC > Form 10-Q on 12-Nov-2013All Recent SEC Filings

Show all filings for QUINPARIO ACQUISITION CORP. | Request a Trial to NEW EDGAR Online Pro



Quarterly Report


References to the "Company," "us" or "we" refer to Quinpario Acquisition Corp. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the interim financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward looking statements that involve risks and uncertainties.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.


We are a blank check company formed on May 31, 2013 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 are actively searching for a target business for our initial business combination. We intend to effectuate our initial business combination using cash from the proceeds of the Public Offering and the Private Placement of the placement units and the extension units (if applicable), our capital stock, debt or a combination of cash, stock and debt.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception up to the closing of our initial public offering ("Public Offering") on August 14, 2013 was in preparation for that event. We believe that we have sufficient funds available to complete our efforts to effect a Business Combination with an operating business within the required 16 months from August 14, 2013.

For the three months ended September 30, 2013, we had net losses of $196,641 which consist of formation and operating costs, offset by interest income of $6,199 on the Trust Account. For the period from May 31, 2013 (inception) through September 30, 2013, we had net losses of $213,803 which consist of formation and operating costs, offset by interest income of $6,199 on the Trust Account.

Liquidity and Capital Resources

Our liquidity needs have been satisfied to date through receipt of $25,000 from the sale of the Founder Shares to Quinpario Partners I, LLC ("Sponsor"), loans and advances from Quinpario Partners LLC, an affiliate of our Sponsor, totaling $356,054 and $1,295,383 of working capital from the gross proceeds of the Public Offering. As of the date of this filing, all loans and advances have been repaid to Quinpario Partners LLC from the net proceeds of the Public Offering.

On August 14, 2013, we consummated our Public Offering of 17,250,000 units at a price of $10.00 per unit. Simultaneously with the consummation of our Public Offering, we consummated the private placement of 1,150,000 placement units to our Sponsor for $11,500,000. We received net proceeds from our Public Offering and the sale of the placement units of $178,370,383, net of the non-deferred portion of the underwriting commissions of $5,175,000 and offering costs and other expenses of $454,617. For a description of the proceeds generated in our Public Offering and a discussion of the use of such proceeds, we refer you to Part II, Item 2 of this report.

We will depend on sufficient interest being earned on the proceeds held in the Trust Account to provide us with additional working capital to identify one or more target businesses, conduct due diligence and complete our initial business combination, as well as to pay any taxes that we may owe. As described elsewhere in this Report, the amounts in the Trust Account may be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act. The current low interest rate environment has made it more difficult for such investments to generate sufficient funds, together with the amounts available outside the Trust Account, to locate, conduct due diligence, structure, negotiate and close our Initial Business Combination. As a result, we may need to seek additional capital to continue our operations. If additional capital is required, we intend to borrow sufficient funds from Quinpario Partners, LLC or the management team to operate until we close our initial Business Combination. Neither Quinpario Partners, LLC nor our management team is under any obligation to advance funds to us. Up to $750,000 of such loans may be convertible into warrants of the post business combination entity at a price of $0.75 per warrant at the option of the lender. The warrants would be identical to the placement warrants. Any such loans would be repaid only from funds held outside the Trust Account or from funds released to us upon completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.

For the period from August 14, 2013 (consummation of our IPO) through September 30, 2013, we disbursed an aggregate of $344,675 out of the proceeds of our Public Offering not held in trust and the proceeds from the sale of the Founder Shares, for legal expenses, accounting expenses and filing fees relating to our SEC reporting obligations, general corporate matters, and miscellaneous expenses. As of September 30, 2013, there was $973,518 remaining in our working capital account not held in trust.

Off-Balance Sheet Arrangements

As of September 30, 2013, 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

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than a monthly fee of $10,000 payable to Quinpario Partners LLC for office space, administrative services and secretarial support.

We began incurring these fees on August 9, 2013, the date the Company's securities were first listed on the NASDAQ Capital Market and will terminate upon the earlier of (i) the consummation of a Business Combination or (ii) the liquidation of the Company.

Critical Accounting Policies

The preparation of interim financial statements and related disclosures in conformity with generally accepted accounting principles in the United States ("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 interim financial statements, and revenue and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:

Development stage company

The Company is considered to be in the development stage and complies with the reporting requirements of FASB ASC 915, "Development Stage Entities". At September 30, 2013, the Company has not commenced any operations nor generated revenue to date. All activity through September 30, 2013 relates to the Company's formation and the Public Offering, and since August 14, 2013, the identification of potential target businesses and assets. Following the Public Offering, the Company will not generate any operating revenues until after completion of a Business Combination, at the earliest. The Company has generated non-operating income in the form of interest income on the designated Trust Account.

Redeemable common stock

All of the 17,250,000 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 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 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 will adjust 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 shall be affected by charges against accumulated deficit and in the absence of accumulated deficit, by charges against paid-in capital.

Accordingly, at September 30, 2013, 16,373,500 of the 17,250,000 Public Shares are classified outside of permanent equity at their redemption value. The redemption value is equal to the pro rata share of the aggregate amount then on deposit in the Trust Account, including interest but less taxes payable and amounts released for working capital (approximately $10.26 per share at September 30, 2013).

Net loss per common share:

Loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period.

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.

Recent accounting pronouncements:

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

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