1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
JK ACQUISITION CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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JK ACQUISITION CORP.
4400 POST OAK PARKWAY, SUITE 2530
HOUSTON, TEXAS 77027
To All Stockholders of
JK Acquisition Corp. (the "Company")
On January 31, 2008, we announced that the special meeting of our
stockholders to vote on the proposed merger with Multi-Shot, LLC ("Multi-Shot")
had been cancelled. We determined and informed Multi-Shot that the proposed
merger would not receive the votes of our stockholders required for approval.
The agreement and plan of merger governing the proposed merger expired on
January 31, 2008, and the proposed merger with Multi-Shot was abandoned.
As a result of the preceding, our board of directors has determined it
would be in the best interests of our stockholders to distribute now to
stockholders holding shares of our common stock ("IPO Shares") issued in our
initial public offering ("IPO") all amounts in the Trust Fund established by us
at the consummation of its IPO and into which a certain amount of the net
proceeds of the IPO were deposited (the "Trust Fund"). As of February 28, 2008,
approximately $80,721,782 (approximately $6.10 per IPO Share) was in the Trust
Fund, after establishing a reserve for accrued Delaware franchise taxes in the
amount of approximately $52,770. Further, our board of directors also
determined that it would be in the best interests of our remaining stockholders
for our company to continue its corporate existence after the distribution of
the Trust Fund, rather than dissolve as required by our certificate of
incorporation, and to do so with a new certificate of incorporation that would
be suitable for our company as a non-blank check company.
Accordingly, we have called a special meeting of Stockholders to be held on
______________, ______________ _____, 2008 at
____________________________________, Texas at _______ ____.M. Central daylight
time for the following purposes:
1. To consider and vote on three proposals to amend our certificate of
incorporation:
* to permit the continuance of our company as a corporation beyond
the time currently specified in our certificate of
incorporation without the limitations related to its IPO
(the "Article Five Elimination Proposal") - Specifically, this
proposal would remove the Fifth Article from our certificate
of incorporation, which, among other blank check company-
related restrictions, requires us to dissolve following
distribution of the Trust Fund. If this proposal is approved,
our stockholders will not have the right to receive a
liquidating distribution of any net assets outside of the Trust
Fund. However, there are no net assets outside of the
IPO trust account available for distribution to stockholders;
* to increase the authorized shares of common stock from
50,000,000 shares to 200,000,000 shares of common stock (the
"Authorized Share Proposal") - This proposal will be acted upon
following, and will be conditioned upon, the approval of the
Article Five Elimination Proposal; and
* to effect a ten-for-one reverse stock split (the "Reverse Stock
Split Proposal") of our common stock, $.0001 par value
per share ("Common Stock"), in which every 10 shares of
Common Stock outstanding as of the effective date of the
amendment will be converted into one share of Common Stock -
This proposal will be acted upon following, and will be
conditioned upon, the approval of the Article Five
Elimination Proposal; and
2. To consider and vote on a proposal to adjourn the special meeting to
a later date or dates, if necessary, to permit further solicitation
of proxies in the event there are insufficient votes at the time of
the special meeting to approve the Article Five Elimination
Proposal, the Authorized Share Proposal, and/or the Reverse Split
Proposal (the "Adjournment Proposal").
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The Board of Directors has fixed the close of business on April 21,
, 2008 as the record date for determining the stockholders entitled to
notice of and to vote at the special meeting and any adjournment thereof.
Holders of our common stock will be entitled to vote on each of the Article Five
Elimination Proposal, the Authorized Share Proposal, and the Reverse Split
Proposal set forth above, and will be each entitled to one vote for each share
of record. The Authorized Share Proposal, and the Reverse Split Proposal will
not be presented for a vote at the special meeting unless and until our
stockholders have approved the Article Five Elimination Proposal. The
Adjournment Proposal may be presented at the meeting, at the discretion of our
board of directors, but only if either Article Five Elimination Proposal, the
Authorized Share Proposal, and/or the Reverse Split Proposal fail to receive the
required number of votes and our board of directors believes that additional
votes constituting the required approval may be obtained by adjourning the
meeting.
We have accrued and unpaid liabilities of approximately $1.7 million as of
the date of this notice, including an aggregate of approximately $825,000 owed
to two of our officers and directors, James P. Wilson and Keith D. Spickelmier.
If we liquidate before the completion of a business combination and distribute
the proceeds held in trust to our public stockholders, Messrs. Wilson and
Spickelmier have agreed to indemnify us against any claims by any vendor or
other entities that are owed money by us for services rendered or products sold
to us that would reduce the amount of the funds in the trust. Messrs. Wilson
and Spickelmier have confirmed that they are currently negotiating with
creditors regarding the satisfaction of our liabilities, which Messrs. Wilson
and Spickelmier expect to complete prior to the special meeting. However, we
cannot assure you that Messrs. Wilson and Spickelmier will be able to satisfy
those obligations. Since any obligations of Messrs. Wilson and Spickelmier are
not collateralized or otherwise guaranteed, we cannot assure you that they will
perform any obligation that they may have or that stockholders will be able to
enforce any such obligation. As a result, the indemnification described above
may not effectively mitigate the risk of creditors' claims upon the amounts
distributed to the holders of the IPO Shares from the Trust Fund. Under
Delaware law, holders of IPO Shares could be required to return a portion of the
distributions that they receive up to their pro rata share of the liabilities
not so discharged, but not in excess of the total amounts that they separately
receive.
After careful consideration, our board of directors has determined that
each of the proposals is fair to and in the best interests of our company and
our stockholders. Our board of directors recommends that you vote, or give
instruction to vote, "FOR" the adoption of each of the proposals. Enclosed is
a notice of special meeting and proxy statement containing detailed information
concerning each of the proposals. We urge you to read the proxy statement and
attached annexes carefully.
All stockholders are cordially invited to attend the special meeting.
Whether or not you plan to attend the special meeting, it is important that your
shares be represented. Accordingly, please sign and date the enclosed Proxy
Card and return it promptly in the envelope provided herewith. Even if you
return a Proxy Card, you may revoke the proxies appointed thereby at any time
prior to the exercise thereof by filing with our Corporate Secretary a written
revocation or duly executed Proxy Card bearing a later date or by attendance and
voting at the special meeting. Attendance at the special meeting will not, in
itself, constitute revocation of the proxies.
By Order of the
Board of Directors,
Houston, Texas James P. Wilson,
______________ _____, 2008 Chairman of the Board,
Chief Executive Officer
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PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
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JK ACQUISITION CORP.
4400 POST OAK PARKWAY, SUITE 2530
HOUSTON, TEXAS 77027
TELEPHONE: 713/978-7557
PROXY STATEMENT AND NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS OF JK ACQUISITION CORP.
TO BE HELD ON _____________ ____, 2008
NOTICE IS HEREBY GIVEN that a special meeting of stockholders, including
any adjournments or postponements thereof, of JK Acquisition Corp., a Delaware
corporation (the "Company"), will be held on ______________, ______________
_____, 2008 at ____________________________________, Texas at _______ ____.M.
Central daylight time for the following purposes:
1. To consider and vote on three proposals to amend our certificate of
incorporation:
* to permit the continuance of our company as a corporation beyond
the time currently specified in our certificate of incorporation
without the limitations related to its IPO (the "Article Five
Elimination Proposal") - Specifically, this proposal would remove the
Fifth Article from our certificate of incorporation, which, among
other blank check company-related restrictions, requires us to
dissolve following distribution of the Trust Fund. If this
proposal is approved, our stockholders will not have the right to
receive a liquidating distribution of any net assets outside of the
Trust Fund. However, there are no net assets outside of the
IPO trust account available for distribution to stockholders;
* to increase the authorized shares of common stock from
50,000,000 shares to 200,000,000 shares of common stock (the
"Authorized Share Proposal") - This proposal will be acted upon
following, and will be conditioned upon, the approval of the
Article Five Elimination Proposal; and
* to effect a ten-for-one reverse stock split (the "Reverse Stock
Split Proposal") of our common stock, $.0001 par value per share
("Common Stock"), in which every 10 shares of Common Stock
outstanding as of the effective date of the amendment will be
converted into one share of Common Stock - This proposal will be
acted upon following, and will be conditioned upon, the approval of
the Article Five Elimination Proposal; and
2. To consider and vote upon a proposal to adjourn the special meeting
to a later date or dates, if necessary, to permit further solicitation
of proxies in the event there are insufficient votes at the time
of the special meeting to approve the Article Five Elimination
Proposal, the Authorized Share Proposal, and/or the Reverse Split
Proposal (the "Adjournment Proposal").
These items of business are more fully described in this proxy statement,
which we encourage you to read in its entirety before voting. The Company will
not transact any other business at the special meeting except for business
properly brought before the special meeting or any adjournment or postponement
thereof by the Company's board of directors.
Holders of our common stock as of the record date for the special meeting
are each entitled to one vote for each share of record and vote together as a
single class with respect to each of Article Five Elimination Proposal, the
Authorized Share Proposal, and the Reverse Split Proposal, and (if presented to
them) the Adjournment Proposal.
However, the Authorized Share Proposal and the Reverse Split Proposal will
not be presented to our stockholders for a vote at the special meeting (i.e.,
the polls will not be opened for voting on the Authorized Share Proposal and the
Reverse Split Proposal) unless and until our stockholders have approved the
Article Five Elimination Proposal. Holders of our common stock as of the record
date for the special meeting are each entitled to vote together as a single
class with respect to the Adjournment Proposal if it is presented.
The record date for the special meeting is April 21, 2008. Only holders of
record of the Company's common stock at the close of business on April 21, 2008
are entitled to notice of the special meeting and to have their vote counted at
the special meeting and any adjournments or postponements thereof. A complete
list of the Company stockholders of record entitled to vote at the special
meeting will be available for inspection by stockholders for 10 days prior to
the date of the special meeting at the principal executive offices of the
Company during ordinary business hours for any purpose germane to the special
meeting.
Your vote is important regardless of the number of shares you own. Each of
the Article Five Elimination Proposal, the Authorized Share Proposal, and the
Reverse Split Proposal must be approved by the affirmative vote of a majority of
the outstanding shares as of the record date of the Company's common stock,
voting together as a single class. The adoption of the Adjournment Proposal
requires the affirmative vote of a majority of the shares of common stock
represented in person or by proxy and voting at the special meeting, if the
Adjournment Proposal is presented.
All the Company stockholders are cordially invited to attend the special
meeting in person. However, to ensure your representation at the special
meeting, you are urged to complete, sign, date and return the enclosed proxy
card as soon as possible. If you are a stockholder of record of the Company's
common stock, you may also cast your vote in person at the special meeting. If
your shares are held in an account at a brokerage firm or bank, you must
instruct your broker or bank on how to vote your shares. If you do not vote or
do not instruct your broker or bank how to vote, your action will have the same
effect as voting "AGAINST" approval of the Article Five Elimination Proposal,
the Authorized Share Proposal, and the Reverse Split Proposal, but will have no
effect on the vote with respect to the Adjournment Proposal. Abstentions will
count towards the vote total for approval of the Article Five Elimination
Proposal, the Authorized Share Proposal, and the Reverse Split Proposal and will
have the same effect as "AGAINST" votes for each such proposal. An abstention or
failure to vote will have no effect on any vote to adjourn the special meeting.
The board of directors of the Company recommends that you vote "FOR" each
of the proposals, which are described in detail in this proxy statement.
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TABLE OF CONTENTS
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS 5
FORWARD-LOOKING STATEMENTS 11
SPECIAL MEETING OF THE COMPANY STOCKHOLDERS
General 12
Date, Time and Place 12
Purpose of the Company Special Meeting 12
Recommendation of The Company Board of Directors 12
Record Date; Who is Entitled to Vote 13
Quorum 13
Abstentions and Broker Non-Votes 13
Vote of Our Stockholders Required 13
Voting Your Shares 14
Revoking Your Proxy 14
Who Can Answer Your Questions About Voting Your Shares 14
No Additional Matters May Be
Presented at the Special Meeting 14
Proxies and Proxy Solicitation Costs 14
BACKGROUND INFORMATION
General 15
Initial Public Offering 15
Termination of Merger 15
Distribution of the Trust Fund 16
Continuation of The Company Following
the Distribution of the Trust Fund 16
General 16
Future Acquisition Plans 16
Need for Additional Capital 17
Possible Status as "Shell Company" under
the Federal Securities Laws 17
Potential Application of Rule 419 under
the Securities Act to Future 18
Public Offerings 18
Quotation on the American Stock Exchange 18
Status of Outstanding Warrants Following
the Special Meeting of Stockholders 18
Dissolution if the Article Five Elimination
Proposal is Are Not Approved 19
Interests of The Company Directors and
Officers in the Proposals 19
Certain Other Interests in the Proposals 21
PROPOSAL ONE -THE ARTICLE FIVE ELIMINATION PROPOSAL 21
PROPOSAL TWO - THE AUTHORIZED SHARE PROPOSAL 22
PROPOSAL THREE - THE REVERSE SPLIT PROPOSAL 23
PROPOSAL FOUR - THE ADJOURNMENT PROPOSAL 25
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 25
PRICE RANGE OF SECURITIES AND DIVIDENDS
General 27
Holders 28
Dividends 28
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DESCRIPTION OF SECURITIES
General 28
Units 28
Common stock 28
Preferred Stock 29
Warrants 29
Dividends 30
Our Transfer Agent and Warrant Agent 30
Shares eligible for future sale 30
Rule 144 31
Registration Rights 31
Delaware Anti-Takeover Law 31
WHERE YOU CAN FIND MORE INFORMATION 32
STOCKHOLDER PROPOSALS 32
Annex I Second Amended and Restated Certificate of Incorporation I-1
Annex II Authorized Share Proposal Amendment II-1
Annex III Reverse Stock Split Proposal Amendment III-1
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. JK Acquisition Corp. ("Company") is a blank check company formed in
2005 to serve as a vehicle for the acquisition, through a merger, capital stock
exchange, asset acquisition or other similar business combination with a then
unidentified operating business. On April 11, 2006, we completed our IPO of
equity securities, raising net proceeds of $76,632,404. Like most blank check
companies, our certificate of incorporation provides for the return of the IPO
proceeds held in trust to the holders of shares of common stock sold in the IPO
if there is no qualifying business combination(s) consummated before the
termination date as defined in the certificate of incorporation. Our certificate
of incorporation provides that, upon the termination date, the Company will
cause its officers to distribute the amounts in the Trust Fund (inclusive of
interest) to the holders of IPO Shares within sixty days of the termination
date. Further, our certificate of incorporation requires that after the
distribution of the amounts in the Trust Fund, the officers of the Company shall
take such action necessary to dissolve and liquidate the Company as soon as
reasonably practicable.
Specifically, our certificate of incorporation defines the
"termination date" as the later of the following dates: 18 months after the
consummation of the IPO or 24 months after the consummation of the IPO in the
event that either a letter of intent, an agreement in principle or a definitive
agreement to complete a Business Combination was executed but was not
consummated within such 18-month period. On September 6, 2006, the Company,
Multi-Shot, LLC ("Multi-Shot") and various other parties entered into the
Agreement and Plan of Merger ("Merger Agreement") and related agreements. Over
the course of this transaction, the parties twice amended the terms of the
Merger Agreement and twice extended the transaction. On January 31, 2008, the
Company announced that the special meeting of its stockholders to vote on the
proposed merger with Multi-Shot had been cancelled. The Company determined and
informed Multi-Shot that the proposed merger would not receive the votes of its
stockholders required for approval. The agreement and plan of merger governing
the proposed merger expired on January 31, 2008, and the proposed merger with
Multi-Shot was abandoned. In view of the preceding, our board of directors has
determined that it is no longer possible for the Company to consummate a
qualifying business combination prior to the Termination Date. Based upon this
determination, our board of directors believes it is in the best interests of
our stockholders to take the necessary actions to return to the holders of our
common stock the amounts held in the Trust Fund with interest (net of applicable
taxes, if any) prior to the stated Termination Date. As of February 28, 2008,
approximately $80,721,782 (approximately $6.10 per IPO Share) was in the Trust
Fund, after establishing a reserve for accrued Delaware franchise taxes in the
amount of approximately $52,770. Following the Trust Fund distribution, the
Company intends to continue as a corporate entity, rather than dissolve, and
pursue the acquisition of one or more operating companies in one or more
industries not now identified.
Q. WHY IS THE COMPANY PROPOSING THE ARTICLE FIVE ELIMINATION PROPOSAL?
A. The Company was organized to serve as a vehicle for the acquisition,
through a merger, capital stock exchange, asset acquisition or other similar
business combination with a then unidentified operating business. Once our board
of directors determined it was no longer possible to fulfill this purpose within
the timeframe required by our certificate of incorporation, our board of
directors determined that it was in the best interests of our stockholders to
distribute the funds in our Trust Fund to the holders of the IPO Shares.
Further, our board of directors also determined that it would be in the best
interests of our remaining stockholders for our company to continue its
corporate existence after the distribution of the Trust Fund, rather than
dissolve as required by our certificate of incorporation, and to do so with a
new certificate of incorporation that would be suitable for our company as a
non-blank check company.
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The Company's stockholders are being asked to approve the amendment of
our certificate of incorporation to permit the Company to continue its corporate
existence (rather than dissolving, as currently required by our certificate of
incorporation following the distribution of the amounts in the Trust Fund) and
to do so with a corporate charter that does not contain blank check
company-related provisions and other restrictions. Specifically, the Article
Five Elimination Proposal involves removing the restrictive provisions relating
to the operations of the Company as a blank check company. If the Article Five
Elimination Proposal is approved, the Company may pursue the acquisition of one
or more operating companies in one or more industries not now identified. See
the section entitled "Background Information-Continuation of the Company
Following the Distribution of the Trust Fund." As of the date of this proxy
statement, the Company has no arrangements in place with any acquisition
candidates and will not engage in more active identification and pursuit of
potential acquisitions unless and until our stockholders approve the Article
Five Elimination Proposal at the special meeting. The Company's second amended
and restated certificate of incorporation, as it will be filed with the
Secretary of State of Delaware if each of the Article Five Elimination Proposal,
the Authorized Share Proposal and the Reverse Stock Split Proposal approved, is
attached as Annex I hereto.
Q. WHY IS THE COMPANY PROPOSING THE AUTHORIZED SHARE PROPOSAL AND THE
REVERSE STOCK SPLIT PROPOSAL?
A. During its discussions with potential merger candidates, management
realized that the Company's capital structure was not appropriate for the type
of merger transaction that the Company was approving. Specifically, in
connection with the proposed Multi-Shot transaction, the Company was requested
to increase significantly the number of authorized shares of Common Stock. In
anticipation of a similar need to do so in the future and to avoid additional
costs associated with regulatory compliance, the Company's Board of Directors
believes it to be in the best interests of the Company and its stockholders to
increase significantly the number of authorized shares of Common Stock at this
time. For similar reasons, the Company's Board of Directors believes it to be
in the best interests of the Company and its stockholders to reduce
proportionately the number of outstanding shares of Common Stock at this time to
make the Company more attractive as a merger candidate in the future.
Q. IF APPROVED BY STOCKHOLDERS, WHEN WILL THE ARTICLE FIVE ELIMINATION
PROPOSAL, THE AUTHORIZED SHARE PROPOSAL, AND THE REVERSE STOCK SPLIT PROPOSAL
BECOME EFFECTIVE?
A. If approved by the stockholders of the Company, the Article Five
Elimination Proposal, the Authorized Share Proposal, and the Reverse Stock Split
Proposal will become effective upon the filing of a Certificate of Amendment of
Certificate of Incorporation with the Secretary of State of Delaware, which is
expected to occur shortly after stockholder approval. Such Certificate of
Amendment will not implement any proposal not approved by the stockholders.
Q. WHAT IS BEING VOTED ON?
A. There are four proposals on which the Company's stockholders are
being asked to vote. The first three proposals involve three amendments to our
certificate of incorporation (a) to remove the Fifth Article from the
certificate of incorporation (the Article Five Elimination Proposal), which,
among other blank check company-related restrictions, requires the Company to
dissolve following distribution of the IPO Trust Fund, (b) to increase the
authorized shares of common stock from 50,000,000 shares to 200,000,000 shares
of common stock (the Authorized Share Proposal), and (c) to effect a
ten-for-one reverse stock split (the Reverse Stock Split Proposal) of our Common
Stock, in which every 10 shares of Common Stock outstanding as of the effective
date of the amendment will be converted into one share of Common Stock. The
Authorized Share Proposal and the Reverse Split Proposal will not be presented
to stockholders at the special meeting unless the Article Five Elimination
Proposal has already been approved.
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The fourth proposal, the Adjournment Proposal, is to approve the
adjournment of the special meeting to a later date or dates, if necessary, to
permit further solicitation and vote of proxies in the event there are
insufficient votes at the time of the special meeting to approve the Article
Five Elimination Proposal, the Authorized Share Proposal, and/or the Reverse
Split Proposal.
Q. WHAT'S THE RELATIONSHIP BETWEEN THE ARTICLE FIVE ELIMINATION
PROPOSAL, ON THE ONE HAND, AND THE AUTHORIZED SHARE PROPOSAL AND THE REVERSE
SPLIT PROPOSAL, ON THE OTHER HAND?
A. The Authorized Share Proposal and the Reverse Split Proposal will
not be presented to our stockholders for a vote at the special meeting (i.e.,
the polls will not be opened for voting on the Authorized Share Proposal and the
Reverse Split Proposal) unless and until our stockholders approve the Article
Five Elimination Proposal.
Q. HOW ARE VOTES COUNTED?
A. Votes will be counted by the inspector of election appointed for the
meeting, who will separately count "FOR" and "AGAINST" votes, abstentions and
broker non-votes. Each of the Article Five Elimination Proposal, the Authorized
Share Proposal, and the Reverse Split Proposal must be approved the affirmative
vote of a majority of the outstanding shares as of the record date of the
Company's common stock, voting together as a single class. The adoption of the
Adjournment Proposal requires the affirmative vote of a majority of the shares
of common stock represented in person or by proxy and voting at the special
meeting, if the Adjournment Proposal is presented.
With respect to the Article Five Elimination Proposal, the Authorized
Share Proposal, and the Reverse Split Proposal, abstentions and broker non-votes
will have the same effect as "AGAINST" votes. An abstention or failure to vote
will have no effect on any vote to adjourn the special meeting. If your shares
are held by your broker as your nominee (that is, in "street name"), you will
need to obtain a proxy form from the institution that holds your shares and
follow the instructions included on that form regarding how to instruct your
broker to vote your shares. If you do not give instructions to your broker, your
broker can vote your shares with respect to "discretionary" items, but not with
respect to "non-discretionary" items. Discretionary items are proposals
considered routine under the rules of the New York Stock Exchange applicable to
member brokerage firms. These rules provide that for routine matters your broker
has the discretion to vote shares held in street name in the absence of your
voting instructions. On non-discretionary items for which you do not give your
broker instructions, the shares will be treated as broker non-votes. The
Adjournment Proposal is the only discretionary item being proposed at the
special meeting.
Q. WHAT IS THE QUORUM REQUIREMENT?
A. A quorum of stockholders is necessary to hold a valid meeting. A
quorum will be present if at least a majority of the outstanding shares of
common stock on the record date are represented by stockholders present at the
meeting or by proxy.
Your shares will be counted towards the quorum only if you submit a
valid proxy (or one is submitted on your behalf by your broker, bank or other
nominee) or if you vote in person at the special meeting. Abstentions and broker
non-votes will be counted towards the quorum requirement. If there is no quorum,
a majority of the votes present at the special meeting may adjourn the special
meeting to another date.
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Q. WHO CAN VOTE AT THE SPECIAL MEETING?
A. Only holders of record of the Company's common stock at the close of
business on April 21, 2008 are entitled to have their vote counted at the
special meeting and any adjournments or postponements thereof. On this record
date, 16,516,667 shares of common stock were outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name. If on
April 21, 2008 your shares were registered directly in your name with the
Company's transfer agent, Continental Stock Transfer & Trust Company, then you
are a stockholder of record. As a stockholder of record, you may vote in person
at the special meeting or vote by proxy. Whether or not you plan to attend the
special meeting in person, we urge you to fill out and return the enclosed proxy
card to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank.
If on April 21, 2008 your shares were held, not in your name, but rather
in an account at a brokerage firm, bank, dealer, or other similar organization,
then you are the beneficial owner of shares held in "street name" and these
proxy materials are being forwarded to you by that organization. The
organization holding your account is considered to be the stockholder of record
for purposes of voting at the special meeting. As a beneficial owner, you have
the right to direct your broker or other agent on how to vote the shares in your
account. You are also invited to attend the special meeting. However, since you
are not the stockholder of record, you may not vote your shares in person at the
special meeting unless you request and obtain a valid proxy from your broker or
other agent.
Q. WHAT VOTE IS REQUIRED IN ORDER TO ADOPT THE ARTICLE FIVE ELIMINATION
PROPOSAL, THE AUTHORIZED SHARE PROPOSAL, AND THE REVERSE SPLIT PROPOSAL?
A. The adoption of each of the Article Five Elimination Proposal, the
Authorized Share Proposal, and the Reverse Split Proposal will require the
affirmative vote of the holders of a majority of the outstanding shares of our
common stock on the record date, voting together as a single class. If you do
not vote (i.e. you "Abstain" from voting on this proposal), your action will
have the same effect as an "AGAINST" vote. Broker non-votes will have the same
effect as "AGAINST" votes.
Q. WHAT VOTE IS REQUIRED IN ORDER TO ADOPT THE ADJOURNMENT PROPOSAL?
A. The adoption of the Adjournment Proposal requires the affirmative
vote of a majority of the shares of common stock represented in person or by
proxy and voting at the special meeting, if the Adjournment Proposal is
presented.
Q. DOES THE COMPANY BOARD RECOMMEND VOTING FOR THE APPROVAL OF THE
ARTICLE FIVE ELIMINATION PROPOSAL, THE AUTHORIZED SHARE PROPOSAL, THE REVERSE
SPLIT PROPOSAL, AND THE ADJOURNMENT PROPOSAL?
A. Yes. After careful consideration of the terms and conditions of
these proposals, the board of directors of the Company has determined that the t
Article Five Elimination Proposal, the Authorized Share Proposal, the Reverse
Split Proposal, and the Adjournment Proposal are fair to and in the best
interests of the Company and its stockholders. The Company board of directors
recommends that the Company stockholders vote "FOR" each of these proposals.
Q. HOW DO THE COMPANY'S DIRECTORS AND OFFICERS INTEND TO VOTE THEIR
SHARES?
A. The Company's directors and officers have advised the Company that
they support the Article Five Elimination Proposal, the Authorized Share
Proposal, the Reverse Split Proposal, and the Article Five Elimination Proposal
and will vote any shares held by them "FOR" them, together with the Adjournment
Proposal. Currently, the directors and officers of the Company hold 3,291,667
shares of common stock.
8
Q. WHAT INTERESTS DO THE COMPANY'S DIRECTORS AND OFFICERS HAVE IN THE
APPROVAL OF THE PROPOSALS?
A. The Company's directors and officers have interests in the proposals
that may be different from, or in addition to, your interests as a stockholder.
These interests include ownership of warrants that may become exercisable in the
future, the possibility of future compensatory arrangements, and the possibility
of participation in future financings. See the section entitled "Background
Information-Interests of the Company Directors and Officers in the Proposals."
Q. WHAT IF I OBJECT TO THE ARTICLE FIVE ELIMINATION PROPOSAL, THE
AUTHORIZED SHARE PROPOSAL, AND THE REVERSE SPLIT PROPOSAL? DO I HAVE APPRAISAL
RIGHTS?
A. The Company stockholders do not have appraisal rights in connection
with the Article Five Elimination Proposal, the Authorized Share Proposal, and
the Reverse Split Proposal under the Delaware General Corporation Law ("DGCL").
Q. WHAT HAPPENS TO THE COMPANY WARRANTS IF THE ARTICLE FIVE ELIMINATION
PROPOSAL IS NOT APPROVED?
A. If the Article Five Elimination Proposal is not approved, the
Company will be required to commence proceedings to dissolve and liquidate
following distribution of the amounts in the Trust Fund and your warrants will
become worthless.
Q. WHAT HAPPENS TO THE COMPANY WARRANTS IF THE ARTICLE FIVE ELIMINATION
PROPOSAL IS APPROVED?
A. If the Article Five Elimination Proposal is approved, the Company
will continue its corporate existence without any of the blank check company
restrictions previously applicable to it and the warrants will remain
outstanding in accordance with their terms. It is the Company's position that
the warrants will become exercisable upon the consummation of any business
combination following stockholder approval of this proposal. For more
information, see the sections entitled "Description of Securities" and
"Background Information-Status of Outstanding Warrants Following the Special
Meeting of Stockholders."
Q. IF THE ELIMINATION OF ARTICLE FIVE ELIMINATION PROPOSAL IS APPROVED,
WHAT HAPPENS NEXT?
A. If the Article Five Elimination Proposal is approved, the Company
expects to continue its existence as a corporate entity and may pursue the
acquisition of one or more operating companies in one or more industries not now
identified, subject to several important factors, including the availability of
financing and the role and level of involvement of the Company's current board
of directors and management in the Company's post-blank check company
operations. Currently, it is anticipated that the Company's board of directors
will continue to serve as directors of the Company through the date of the
special meeting and may continue thereafter. As of the date of this proxy
statement, the Company has no arrangements in place with any acquisition
candidates and will not engage in more active identification and pursuit of
potential acquisitions unless and until our stockholders approve the Article
Five Elimination Proposal at the special meeting.
Following the approval of the Article Five Elimination Proposal, we
cannot assure you that we will be able to acquire an operating business.
Moreover, we expect that our common stock, warrant and units will no longer be
listed on the American Stock Exchange, and we have no assurance that our common
stock, warrant and units will be able to trade in any other established market.
9
Q. WHAT DO I NEED TO DO NOW?
A. The Company urges you to read carefully and consider the information
contained in this proxy statement, including the annexes, and to consider how
the proposals will affect you as a stockholder of the Company. You should then
vote as soon as possible in accordance with the instructions provided in this
proxy statement and on the enclosed proxy card.
Q. HOW DO I VOTE?
A. If you are a holder of record of the Company common stock, you may
vote in person at the special meeting or by submitting a proxy for the special
meeting. Whether or not you plan to attend the special meeting in person, we
urge you to vote by proxy to ensure your vote is counted. You may submit your
proxy by completing, signing, dating and returning the enclosed proxy card in
the accompanying pre-addressed postage paid envelope. You may still attend the
special meeting and vote in person if you have already voted by proxy.
If you hold your shares in "street name," which means your shares are
held of record by a broker, bank or nominee, you must provide the record holder
of your shares with instructions on how to vote your shares. You should have
received a proxy card and voting instructions with these proxy materials from
that organization rather than from the Company. Simply complete and mail the
proxy card to ensure that your vote is counted. To vote in person at the special
meeting, you must obtain a valid proxy from your broker, bank or other agent.
Follow the instructions from your broker or bank included with these proxy
materials, or contact your broker or bank to request a proxy form.
Q. WHAT WILL HAPPEN IF I ABSTAIN FROM VOTING OR FAIL TO VOTE?
A. An abstention or failure to vote will have the effect of voting
against the Article Five Elimination Proposal, the Authorized Share Proposal,
and the Reverse Split Proposal. An abstention or failure to vote will have no
effect on any vote to adjourn the special meeting.
Q. CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY OR
DIRECTION FORM?
A. Yes. You can revoke your proxy at any time prior to the final vote
at the special meeting. If you are the record holder of your shares, you may
revoke your proxy in any one of three ways: (i) you may submit another properly
completed proxy card with a later date; (ii) you may send a written notice that
you are revoking your proxy to the Company's corporate secretary at the address
listed at the end of this section; or (iii) you may attend the special meeting
and vote in person. Simply attending the special meeting will not, by itself,
revoke your proxy.
If your shares are held by your broker or bank as a nominee or agent,
you should follow the instructions provided by your broker or bank.
Q. WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?
A. You may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxy cards or voting
instruction cards, if your shares are registered in more than one name or are
registered in different accounts. For example, if you hold your shares in more
than one brokerage account, you will receive a separate voting instruction card
for each brokerage account in which you hold shares. Please complete, sign,
date and return each proxy card and voting instruction card that you receive in
order to cast a vote with respect to all of your the Company shares.
10
Q. WHO IS PAYING FOR THIS PROXY SOLICITATION?
A. The Company will pay for the entire cost of soliciting proxies. In
addition to these mailed proxy materials, our directors and officers may also
solicit proxies in person, by telephone or by other means of communication.
These parties will not be paid any additional compensation for soliciting
proxies. We may also reimburse brokerage firms, banks and other agents for the
cost of forwarding proxy materials to beneficial owners.
Q. WHO CAN HELP ANSWER MY QUESTIONS?
A. If you have questions about the proposals or if you need additional
copies of the proxy statement or the enclosed proxy card you should contact:
JK Acquisition Corp.
4400 Post Oak Parkway, Suite 2530
Houston, Texas 77027
Attn: Corporate Secretary
Telephone: 713/978-7557
You may also obtain additional information about the Company from documents
filed with the U.S. Securities and Exchange Commission ("SEC") by following the
instructions in the section entitled "Where You Can Find More Information."
FORWARD-LOOKING STATEMENTS
We believe that some of the information in this proxy statement constitutes
forward-looking statements within the definition of the Private Securities
Litigation Reform Act of 1995. You can identify these statements by
forward-looking words such as "may," "expect," "anticipate," "contemplate,"
"believe," "estimate," "intends," and "continue" or similar words. You should
read statements that contain these words carefully because they:
* discuss future expectations;
* contain projections of future results of operations or financial
condition; or
* state other "forward-looking" information.
We believe it is important to communicate our expectations to our
stockholders. However, there may be events in the future that we are not able to
predict accurately or over which we have no control. The cautionary language
discussed in this proxy statement provide examples of risks, uncertainties and
events that may cause actual results to differ materially from the expectations
described by us in such forward-looking statements, including, among other
things, claims by third parties against the Trust Fund, unanticipated delays in
the distribution of the funds from the Trust Fund, the application of Rule 419
or other restrictions to future financings or business combinations involving
the Company and the Company's ability to finance and consummate acquisitions
following the distribution of the funds from the Trust Fund. You are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date of this proxy statement.
All forward-looking statements included herein attributable to the Company
or any person acting on the Company's behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to in this section.
Except to the extent required by applicable laws and regulations, the Company
undertakes no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this proxy statement or to reflect the
occurrence of unanticipated events.
11
SPECIAL MEETING OF THE COMPANY STOCKHOLDERS
GENERAL
We are furnishing this proxy statement to the Company stockholders as part
of the solicitation of proxies by our board of directors for use at the special
meeting of the Company stockholders to be held on _______________ _____, 2008,
and at any adjournment or postponement thereof. This proxy statement is first
being furnished to our stockholders on or about _______________ _____, 2008 in
connection with the vote on the Article Five Elimination Proposal, the
Authorized Share Proposal, the Reverse Split Proposal, and the Adjournment
Proposal. This document provides you with the information you need to know to be
able to vote or instruct your vote to be cast at the special meeting. Unless the
context requires otherwise, the terms "the Company," "we," "us," and "our" refer
to JK Acquisition Corp.
DATE, TIME AND PLACE
The special meeting will be held at ______________, ______________ _____,
2008 at ____________________________________, Texas at _______ ____.M. Central
daylight time.
PURPOSE OF THE COMPANY SPECIAL MEETING
At this special meeting, you will be asked to consider and vote upon the
following proposals:
* The Article Five Elimination Proposal - proposal to amend the
certificate of incorporation of the Company to permit the continuance of our
company as a corporation beyond the time currently specified in our certificate
of incorporation without the limitations related to its IPO to remove the Fifth
Article from the certificate of incorporation, which, among other blank check
company-related restrictions, and requires the Company to dissolve following the
distribution of the Trust Fund.
* The Authorized Share Proposal - a proposal to amend the certificate
of incorporation of the Company following and conditioned upon the
approval of the Article Five Elimination Proposal. This proposal
would increase the authorized shares of common stock from
50,000,000 shares to 200,000,000.
* The Reverse Stock Split Proposal - proposal to amend the certificate
of incorporation of the Company following and conditioned upon the
approval of the Article Five Elimination Proposal. This proposal
would effect a ten-for-one reverse stock split of Common Stock.
* The Adjournment Proposal - a proposal to authorize the adjournment of
the special meeting to a later date or dates, if necessary, to
permit further solicitation and vote of proxies in the event there
are insufficient votes at the time of the special meeting to adopt
the Article Five Elimination Proposal, the Authorized Share
Proposal, and/or the Reverse Split Proposal.
RECOMMENDATION OF THE COMPANY BOARD OF DIRECTORS
Our board of directors:
* has determined that each of the Article Five Elimination Proposal,
the Authorized Share Proposal, the Reverse Split Proposal, and the
Adjournment Proposal is fair to and in the best interests of
us and our stockholders;
* has approved each of the Article Five Elimination Proposal, the
Authorized Share Proposal, the Reverse Split Proposal, and the
Adjournment Proposal; and
* recommends that our common stockholders vote "FOR" each of the
Article Five Elimination Proposal, the Authorized Share Proposal,
the Reverse Split Proposal, and the Adjournment Proposal.
12
RECORD DATE; WHO IS ENTITLED TO VOTE
The record date is ____________________. On this record date, there were
16,516,667 shares of common stock outstanding and entitled to vote. Holders of
warrants are not entitled to vote at the special meeting.
The Article Five Elimination Proposal will be submitted to the holders of
the outstanding shares as of the record date of the Company's common stock.
Neither of the Authorized Share Proposal or the Reverse Split Proposal will be
presented to our stockholders for a vote at the special meeting (i.e., the polls
will not be opened for voting on the Authorized Share Proposal or the Reverse
Split Proposal) unless and until our stockholders have approved the Article Five
Elimination Proposal. Depending on our ability to obtain the requisite number
of votes for the Article Five Elimination Proposal, the Authorized Share
Proposal, and the Reverse Split Proposal, the adoption of the Adjournment
Proposal may be submitted to the holders of our common shares.
The Company's officers and directors have advised us that they support each
of the proposals and intend to vote their shares "FOR" each of the Article Five
Elimination Proposal, the Authorized Share Proposal, the Reverse Split Proposal,
and the Adjournment Proposal at the special meeting. As of April 21, 2008,
the Company's officers and directors owned, either directly or
beneficially, and were entitled to vote 3,291,667 shares, or 19.9%, of the
Company's outstanding common stock.
QUORUM
A quorum will be present if at least a majority of the outstanding shares
of common stock on the record date are represented by stockholders present at
the meeting or by proxy.
ABSTENTIONS AND BROKER NON-VOTES
Proxies that are marked "abstain" and proxies relating to "street name"
shares that are returned to us but marked by brokers as "not voted" will be
treated as shares present for purposes of determining the presence of a quorum
on all matters. The latter will not be treated as shares entitled to vote on the
matter as to which authority to vote is withheld by the broker. If you do not
give the broker voting instructions, your broker may not vote your shares on the
Article Five Elimination Proposal, the Authorized Share Proposal, or the Reverse
Split Proposal.
VOTE OF OUR STOCKHOLDERS REQUIRED
The affirmative vote of a majority of the outstanding shares of the Company
common stock, voting together as a single class, is required to adopt each of
the Article Five Elimination Proposal, the Authorized Share Proposal, and the
Reverse Split Proposal. If you do not vote (i.e. you "Abstain" from voting on
this proposal), your action will have the same effect as an "AGAINST" vote.
Broker non-votes will have the same effect as "AGAINST" votes.
If the affirmative vote of a majority of the outstanding shares of the
Company common stock, voting together as a single class, is not obtained for the
approval of the Article Five Elimination Proposal, the Authorized Share
Proposal, and the Reverse Split Proposal will not be presented at the special
meeting for approval.
The adoption of the Adjournment Proposal requires the affirmative vote of a
majority of the shares of common stock represented in person or by proxy and
voting at the special meeting, if the Adjournment Proposal is presented.
13
VOTING YOUR SHARES
Each share of the Company common stock that you own in your name entitles
you to one vote. Your one or more proxy cards show the number of shares of our
common stock that you own. There are two ways to vote your shares of the Company
common stock at the special meeting: You can vote by signing and returning the
enclosed proxy card. If you vote by proxy card, your "proxy," whose name is
listed on the proxy card, will vote your shares as you instruct on the proxy
card. If you sign and return the proxy card but do not give instructions on how
to vote your shares, your shares will be voted, as recommended by our board,
"FOR" the adoption of the Article Five Elimination Proposal, the Authorized
Share Proposal, the Reverse Split Proposal, and the Adjournment Proposal. Votes
received after a matter has been voted upon at the special meeting will not be
counted.
You can attend the special meeting and vote in person. We will give you a
ballot when you arrive. However, if your shares are held in the name of your
broker, bank or another nominee, you must get a proxy from the broker, bank or
other nominee. That is the only way we can be sure that the broker, bank or
nominee has not already voted your shares.
REVOKING YOUR PROXY
If you give a proxy, you may revoke it at any time before it is exercised
by doing any one of the following:
* you may send another proxy card with a later date;
* you may notify our corporate secretary in writing before the special
meeting that you have revoked your proxy; or
* you may attend the special meeting, revoke your proxy, and vote in
person, as indicated above.
WHO CAN ANSWER YOUR QUESTIONS ABOUT VOTING YOUR SHARES
If you have any questions about how to vote or direct a vote in respect of
your shares of our common stock, you may call our corporate secretary at (713)
978-7557.
NO ADDITIONAL MATTERS MAY BE PRESENTED AT THE SPECIAL MEETING
This special meeting has been called only to consider the adoption of the
Article Five Elimination Proposal, the Authorized Share Proposal, the Reverse
Split Proposal, and the Adjournment Proposal. Under our by-laws, other than
procedural matters incident to the conduct of the special meeting, no other
matters may be considered at the special meeting if they are not included in the
notice of the special meeting.
PROXIES AND PROXY SOLICITATION COSTS
We are soliciting proxies on behalf of our board of directors. This
solicitation is being made by mail but also may be made by telephone or in
person. The Company will pay for the entire cost of soliciting proxies. In
addition to these mailed proxy materials, our directors and officers may also
solicit proxies in person, by telephone or by other means of communication.
These parties will not be paid any additional compensation for soliciting
proxies.
We will ask banks, brokers and other institutions, nominees and fiduciaries
to forward their proxy materials to their principals and to obtain their
authority to execute proxies and voting instructions. We will reimburse them for
their reasonable expenses.
If you grant a proxy, you may still vote your shares in person if you
revoke your proxy before the special meeting.
14
BACKGROUND INFORMATION
GENERAL
We were incorporated in Delaware on May 11, 2005, as a blank check company
formed to serve as a vehicle for the acquisition, through a merger, capital
stock exchange, asset acquisition or other similar business combination with a
then unidentified operating business whose fair market value is at least equal
to 80% of our net assets at the time of such business combination.
INITIAL PUBLIC OFFERING
A registration statement for the Company's initial public offering was
declared effective on April 10, 2006. On April 11, 2006, the Company
consummated its initial public offering of 11,500,000 units and on April 17,
2006, consummated the closing of an additional 1,725,000 units that were subject
to the underwriters' over-allotment option. Each unit consists of one share of
common stock and two redeemable common stock purchase warrants. Each warrant
expires on April 10, 2010, or earlier upon redemption, and entitles the holder
to purchase one share of our common stock at an exercise price of $5.00 per
share. The common stock and warrants started trading separately as of May 11,
2006.
The net proceeds from the sale of the Company's units and private placement
shares were approximately $76,632,404. Of this amount, $76,532,404 was
deposited in trust and, in accordance with the Company's amended and restated
certificate of incorporation, will be released either upon the consummation of a
business combination or upon the liquidation of the Company. The remaining
$100,000 was held outside of the trust for use to provide for business, legal
and accounting due diligence on prospective acquisitions and continuing general
and administrative expenses ("working capital"). Additionally, up to $900,000
of working capital may be funded from the interest earned from the trust
account. As of February 28, 2008, approximately $80,721,782was held in deposit
in the trust account, after establishing a reserve for accrued Delaware
franchise taxes in the amount of approximately $52,770.
Our certificate of incorporation requires us to promptly distribute to the
holders of the IPO Shares the amount in our Trust Fund, including any accrued
interest, if we do not effect a business combination as described in the
registration statement for our IPO within 18 months after the consummation of
our IPO (April 11, 2006), or within 24 months after the consummation of our IPO
if a letter of intent, agreement in principle or definitive agreement has been
executed within 18 months after the consummation of our IPO and the business
combination has not been consummated within such 18 month period.
TERMINATION OF MERGER
On September 6, 2006, the Company, Multi-Shot, LLC ("Multi-Shot") and
various other parties entered into the Agreement and Plan of Merger ("Merger
Agreement") and related agreements. Over the course of this transaction, the
parties twice amended the terms of the Merger Agreement and twice extended the
transaction. On January 31, 2008, the Company announced that the special
meeting of its stockholders to vote on the proposed merger with Multi-Shot had
been cancelled. The Company determined and informed Multi-Shot that the
proposed merger would not receive the votes of its stockholders required for
approval. The agreement and plan of merger governing the proposed merger
expired on January 31, 2008, and the proposed merger with Multi-Shot was
abandoned.
If we do not effect a qualifying business combination as described in our
IPO registration statement within the extended 24 month window following the
consummation of our IPO, we are required by our certificate of incorporation to
distribute to the holders of the IPO Shares the amount in our Trust Fund,
including any accrued interest, within 60 days of April 11, 2008 (the
"Termination Date"), and commence proceeding to dissolve and liquidate the
Company.
Because of the termination of the merger, our board of directors has
determined that it is no longer possible for the Company to consummate a
qualifying business combination prior to the Termination Date. Based upon this
determination, our board of directors believes it is in the best interests of
our stockholders to take the necessary actions to return to the holders of our
common stock the amounts held in the Trust Fund with interest (net of applicable
taxes, if any) prior to the Termination Date.
15
DISTRIBUTION OF THE TRUST FUND
The Company intends to distribute the amounts in the Trust Fund within 60
days of April 11, 2008. As of February 28, 2008, there was approximately
$80,721,782 (approximately $6.10 per IPO Share) in the Trust Fund. Only holders
of our IPO Shares are entitled to receive proceeds from the distribution of the
Trust Fund, after establishing a reserve for accrued Delaware franchise taxes in
the amount of approximately $52,770. We have accrued and unpaid liabilities of
approximately $1.7 million as of the date of this notice, including an aggregate
of approximately $825,000 owed to two of our officers and directors, James P.
Wilson and Keith D. Spickelmier. If we liquidate before the completion of a
business combination and distribute the proceeds held in trust to our public
stockholders, Messrs. Wilson and Spickelmier have agreed to indemnify us against
any claims by any vendor or other entities that are owed money by us for
services rendered or products sold to us that would reduce the amount of the
funds in the trust. Messrs. Wilson and Spickelmier have confirmed that they
are currently negotiating with creditors regarding the satisfaction of our
liabilities, which Messrs. Wilson and Spickelmier expect to complete prior to
the special meeting. However, we cannot assure you that Messrs. Wilson and
Spickelmier will be able to satisfy those obligations. Since any obligations of
Messrs. Wilson and Spickelmier are not collateralized or otherwise guaranteed,
we cannot assure you that they will perform any obligation that they may have or
that stockholders will be able to enforce any such obligation. As a result, the
indemnification described above may not effectively mitigate the risk of
creditors' claims upon the amounts distributed to the holders of the IPO Shares
from the Trust Fund. Under Delaware law, holders of IPO Shares could be
required to return a portion of the distributions that they receive up to their
pro rata share of the liabilities not so discharged, but not in excess of the
total amounts that they separately receive.
CONTINUATION OF THE COMPANY FOLLOWING THE DISTRIBUTION OF THE TRUST FUND
GENERAL
The purpose of the Article Five Elimination Proposal is to permit the
Company to continue its corporate existence (rather than dissolving, as
currently required by our certificate of incorporation following the
distribution of the amounts in the Trust Fund) and to do so with a corporate
charter that does not contain blank check company-related provisions and other
restrictions. Specifically, the Article Five Elimination Proposal includes
removing the restrictive provisions relating to the operations of the Company as
a blank check company.
FUTURE ACQUISITION PLANS
If the Article Five Elimination Proposal is approved, the Company intends
to pursue the acquisition of one or more operating companies in one or more
industries not now identified, subject to several important factors, including
the availability of financing and the role and level of involvement of the
Company's current board of directors and management in the Company's post-blank
check company operations. We cannot assure you that we will be able to acquire
an operating business. As an alternative, the Company might seek to obtain value
from its status as a public shell through a sale to or combination with an
operating company seeking such status as a means of "going public." As of the
date of this proxy statement, the Company has no arrangements in place with any
acquisition candidates and will not engage in more active identification and
pursuit of potential acquisitions unless and until our stockholders approve the
Article Five Elimination Proposal at the special meeting. Currently, it is
anticipated that the members of the Company's board of directors will continue
to serve as directors of the Company through the date of the special meeting and
may continue thereafter.
In the event that the Company enters into a definitive agreement to acquire
an operating company, we believe the acquisition would not necessarily require
stockholder approval, even if it constituted a change in control of the Company,
provided that the Company's common stock is not then listed on a national
exchange and the acquisition is structured so as not to require a stockholder
vote under the DGCL. Accordingly, you may not be entitled to vote on any future
acquisitions by the Company.
16
NEED FOR ADDITIONAL CAPITAL
The board of directors anticipates that the Company will need to raise
capital to fund ongoing operations, including the compliance cost of continuing
to remain a public reporting company, and to fund the acquisition of an
operating business. On March 31, 2008, we had approximately $59,487 in cash
outside the Trust Fund. Our balance sheet as of that date reflected total
liabilities of approximately $1,698,215, excluding common stock subject to
redemption.
The Company does not currently have any specific capital-raising plans. We
may seek to issue equity securities, including preferred securities for which we
may determine the rights and designations, common stock, warrants, equity
rights, convertibles notes and any combination of the foregoing. Any such
offering may take the form of a private placement, public offering, rights
offering, other offering or any combination of the foregoing at fixed or
variable market prices or discounts to prevailing market prices. We cannot
assure you that we will be able to raise sufficient capital on favorable, or
any, terms. We believe that the issuance of equity securities in such a
financing will not be subject to stockholder approval if the Company's common
stock is not then listed on a national exchange or traded on Nasdaq.
Accordingly, you may not be entitled to vote on any future financing by the
Company. Moreover, stockholders have no preemptive or other rights to acquire
any securities that the Company may issue in the future.
If the Company is deemed to be "blank check company" for the purposes of
the federal securities laws, regulatory restrictions that are more restrictive
than those currently set forth in the Company's certificate of incorporation may
apply to any future public offerings by the Company. For more information, see
the section below entitled "-Potential Application of Rule 419 under the
Securities Act to Future Public Offerings."
POSSIBLE STATUS AS "SHELL COMPANY" UNDER THE FEDERAL SECURITIES LAWS
Following stockholder approval of the Article Five Elimination Proposal and
the Trust Fund distribution, we may be deemed a "shell company" under the
federal securities laws. A "shell company" is a public reporting company that
has no or nominal assets (other than cash), and no or nominal operations. Shell
companies are subject to certain special rules under the federal securities
laws, including:
* specific disclosure requirements on Form 8-K upon the consummation of
a transaction that effects a change in control or changes the shell
company into a non-shell company, as discussed further below;
* limitations in the use of certain short-form registration statements
under the Securities Act while a shell company, including Form S-8
registration statements used in connection with employee benefit
plans;
* ineligibility for certain streamlined procedures and publicity rules
in connection with public offerings while a shell company and for
a period of three years thereafter; and
* unavailability of the resale provisions of Rule 144 of the Securities
Act until one year following the Form 8-K disclosure described
above.
In addition, we may be deemed a "blank check company" under the federal
securities laws, which could result in restrictions on any future public
offerings of our securities, as further described below.
17
POTENTIAL APPLICATION OF RULE 419 UNDER THE SECURITIES ACT TO FUTURE PUBLIC
OFFERINGS
Depending on the timing and nature of our future capital-raising
activities, we could become subject to even more onerous restrictions regarding
the handling of any future public offering proceeds than those set forth in our
current certificate of incorporation regarding the proceeds of our IPO.
Following the amendment of our certificate of incorporation and the
distribution of the amounts in the Trust Fund, we may be deemed a "blank check
company" for the purposes of Rule 419 promulgated under the Securities Act of
1933 (the "Securities Act"). Rule 419 imposes strict restrictions on the
handling of the proceeds received, and securities issued, in an offering
registered under the Securities Act by a "blank check company" as defined in
Rule 419, including a mandatory escrow of the offering proceeds, a process of
stockholder "reconfirmation" when a business combination is announced and a ban
on the trading of the securities sold, pending the consummation of a business
combination, which must occur within 18 months of the offering. Rule 419 defines
a "blank check company" as:
* a development stage company that has no specific business plan or
purpose or has indicated that its business plan is to engage in
a merger or acquisition with an unidentified company or companies,
or other entity or person; and
* issuing "penny stock," as defined in Rule 3a51-1 under the Securities
Exchange Act of 1934 (the "Exchange Act").
There are several bases on which exemptions from the application of Rule 419
exist, including raising capital through a private offering exempt from
registration under the Securities Act, raising net proceeds in excess of $5
million in a public offering that is a firm commitment underwritten offering and
raising capital in a public offering in connection with the acquisition of an
identified company. Although the Company intends to conduct any future capital
raising in a manner that is exempt from Rule 419, there can be no assurances
that any future capital raising transactions will qualify for such an exemption.
QUOTATION ON THE AMERICAN STOCK EXCHANGE
The Company's outstanding common stock, warrants and units are currently
quoted on the American Stock Exchange. Following stockholder approval of the
distribution of the amounts in the Trust Fund, we believe that our common stock,
warrant and units will no longer be listed on the American Stock Exchange. In
such event, we will try to have them quoted on the OTC Bulletin Board. However,
we have no certainty that we will be able to accomplish this. To trade on the
OTC Bulletin Board, the Company must continue to timely file public reports.
Concurrent with the IPO, the Company filed a registration statement on Form 8-A
with the SEC registering the units, the common stock, and the warrants under
Section 12(g) of the Exchange Act. While such registration is in effect, the
Company is a reporting company under the federal securities laws. At this time,
the Company has no intention of seeking to deregister its common stock, warrant
or units under the Exchange Act and plans to continue to file public reports as
long as such registration is in effect. Nonetheless, we cannot assure you that
our common stock, warrants or units will remain listed on the American Stock
Exchange or be eligible for quotation on the OTC Bulletin Board.
STATUS OF OUTSTANDING WARRANTS FOLLOWING THE SPECIAL MEETING OF STOCKHOLDERS
If the Article Five Elimination Proposal is not approved, the Company will
be required to commence proceedings to dissolve and liquidate following
distribution of the amounts in the Trust Fund and your warrants will become
worthless. If the Article Five Elimination Proposal is approved, the Company
will continue its corporate existence without any of the blank check company
restrictions previously applicable to it and the warrants will remain
outstanding in accordance with their terms. It is the Company's position that
the warrants will become exercisable upon the consummation of any business
combination following stockholder approval of this proposal. Outstanding
warrants may adversely affect the ability of the Company to attract new
investors or otherwise obtain financing and may make it more difficult to effect
future acquisitions. For information about the warrants, see the section
entitled "Description of Securities."
18
DISSOLUTION IF THE ARTICLE FIVE ELIMINATION PROPOSAL IS NOT APPROVED
If the Article Five Elimination Proposal is not approved by the
stockholders, the Company will take all action necessary to dissolve and
liquidate as soon as reasonably practicable after distribution of the amounts in
the Trust Fund within 60 days of April 11, 2008. Any remaining net assets,
after the distribution of the amounts in the Trust Fund to the holders of the
IPO Shares, will be distributed to our common stockholders. However, we
anticipate having no proceeds for distribution to our common stockholders
because we believe that all available funds outside of the Trust Fund will be
required for the payment of creditors. On March 31, 2008, we had approximately
$59,487 in cash outside the Trust Fund. Our balance sheet as of that date
reflected total liabilities of approximately $1,698,215, excluding common stock
subject to redemption but including an aggregate of approximately $825,000 owed
to two of our officers and directors, James P. Wilson and Keith D. Spickelmier.
In addition to satisfying these liabilities, we anticipate incurring additional
professional, legal and accounting fees in connection with the preparation and
filing of this proxy statement, the special meeting described in this proxy
statement and, if applicable, the Company's dissolution and liquidation.
In order to effectuate the dissolution and liquidation of the Company
following the distribution of the amounts in the Trust Fund, we anticipate the
following process:
* our board of directors would convene and adopt a specific plan of
dissolution and liquidation, which it would then vote to
recommend to our stockholders; at such time it would also cause
to be prepared a preliminary proxy statement setting out such plan
of dissolution and liquidation as well as the board of directors'
recommendation of such plan;
* we would promptly file our preliminary proxy statement with the SEC;
* if the SEC does not review the preliminary proxy statement then, on
or about ten days following the filing of such preliminary proxy
statement, we would mail the definitive proxy statement to our
stockholders, and ten to approximately 20 days following the mailing
of the definitive proxy statement, we would convene a meeting of
our stockholders, at which holders of shares of all of our voting
stock then outstanding would be entitled to vote on our plan of
dissolution and liquidation; and
* if the SEC does review the preliminary proxy statement, we currently
estimate that we would receive its comments 30 days after the
filing of such proxy statement. We would then mail the
definitive proxy statement to our stockholders following the
conclusion of the comment and review process (the length of which
we cannot predict with any certainty, and which may be
substantial) and we would convene a meeting of our stockholders at
which holders of shares of all of our voting stock then outstanding
would be entitled to vote on our plan of dissolution and
liquidation.
INTERESTS OF THE COMPANY DIRECTORS AND OFFICERS IN THE PROPOSALS
When you consider the recommendations of the Company's board of directors
in favor of the proposals, you should keep in mind that the Company's initial
stockholders, directors and officers ("the Company Inside Stockholders") have
interests in the proposals that may be different from, or in addition to, your
interests as a stockholder.
WARRANTS HELD BY THE COMPANY INSIDE STOCKHOLDERS
If the Article Five Elimination Proposal is not approved, the Company will
be required to commence proceedings to dissolve and liquidate following
distribution of the amounts in the Trust Fund. In such event, the 3,291,667
shares of the Company common stock and 666,668 warrants held by the Company
Inside Stockholders that were acquired prior to the IPO will be worthless
because the Company Inside Stockholders have waived any rights to receive any
trust liquidation proceeds. Our current directors, officers and special
advisors, either directly or beneficially, own an aggregate of 3,291,667 shares
of the Company common stock and 666,668 warrants that they purchased for a total
consideration of approximately $2.03 million. Management believe that these
shares of common stock and warrants have no meaningful value in view of the
extremely minimal current trading value of the warrants and the anticipated,
extremely minimal trading value of the shares after the distribution of the
Trust Fund. For more information about the outstanding warrants, see the
sections entitled "Description of Securities" and "-Status of Outstanding
Warrants Following the Special Meeting of Stockholders"
19
COMPENSATORY ARRANGEMENTS FOR BOARD OF DIRECTORS AND MANAGEMENT
None of the Company's executive officers or directors has received any cash
compensation for services rendered to the Company. Commencing on the effective
date of our IPO, we have paid 4350 Management LLC (which is wholly-owned by
James P. Wilson, our Chairman of the Board and Chief Executive Officer) a fee of
$7,500 per month for office space and certain additional general and
administrative services. As of the date of this proxy statement, expenses were
incurred under this agreement of approximately $157,500. The agreement with 4350
Management LLC is for our benefit and was not intended to provide Mr. Wilson
compensation in lieu of a salary. We believe that this arrangement is at least
as favorable to the Company as we could have obtained from an unaffiliated third
party.
All of the current members of the Company's board of directors are expected
to continue to serve as directors at least through the date of the special
meeting. At this time, the board of directors has not determined the initial
composition of the board or management following stockholder approval of the
Article Five Elimination Proposal and the Trust Fund distribution. The Company
currently has made no determinations regarding the compensation it will pay its
directors or officers following stockholder approval of the Article Five
Elimination Proposal and the Trust Fund distribution.
OFFICER AND DIRECTOR LIABILITY
We have accrued and unpaid liabilities of approximately $1.7 million as of
the date of this notice, including an aggregate of approximately $825,000 owed
to two of our officers and directors, James P. Wilson and Keith D. Spickelmier.
If we liquidate before the completion of a business combination and distribute
the proceeds held in trust to our public stockholders, Messrs. Wilson and
Spickelmier have agreed to indemnify us against any claims by any vendor or
other entities that are owed money by us for services rendered or products sold
to us that would reduce the amount of the funds in the trust. Messrs. Wilson
and Spickelmier have confirmed that they are currently negotiating with
creditors regarding the satisfaction of our liabilities, which Messrs. Wilson
and Spickelmier expect to complete prior to the special meeting. However, we
cannot assure you that Messrs. Wilson and Spickelmier will be able to satisfy
those obligations. Since any obligations of Messrs. Wilson and Spickelmier are
not collateralized or otherwise guaranteed, we cannot assure you that they will
perform any obligation that they may have or that stockholders will be able to
enforce any such obligation. As a result, the indemnification described above
may not effectively mitigate the risk of creditors' claims upon the amounts
distributed to the holders of the IPO Shares from the Trust Fund. Under
Delaware law, holders of IPO Shares could be required to return a portion of the
distributions that they receive up to their pro rata share of the liabilities
not so discharged, but not in excess of the total amounts that they separately
receive.
POTENTIAL INTERESTS OF THE COMPANY INSIDE STOCKHOLDERS IN FUTURE FINANCINGS AND
ACQUISITIONS
Following stockholder approval of the Article Five Elimination Proposal and
the Trust Fund distribution, the Company will operate without the blank check
company restrictions that are currently set forth in our certificate of
incorporation. The board of directors anticipates that the Company will need to
raise capital to fund ongoing operations, including the compliance cost of
continuing to remain a public reporting company, and to fund the acquisition of
an operating business. Such a financing may involve existing investors and/or
new investors, including officers and directors of the Company. Further, any
operating business which the Company may acquire following stockholder approval
of the Article Five Elimination Proposal, may be affiliated, or have some
relationship with, one of our existing officers and directors. In connection
with our IPO, each of our officers and directors signed an agreement with
Ferris, Baker Watts, Incorporated, the underwriter of our IPO ("FBWI"), that the
Company would not consummate a business combination with an affiliated entity
without an opinion from an independent investment banking firm reasonably
acceptable to FBWI that the business combination is fair to the Company's
stockholders from a financial perspective. The continued applicability of this
provision following the stockholder approval of the Article Five Elimination
Proposal and the Trust Fund distribution is unclear. In such circumstances, we
would anticipate that the board of directors will take such action as is
consistent with its fiduciary duties to stockholders.
20
CERTAIN OTHER INTERESTS IN THE PROPOSALS
In addition to the interests of our directors and officers in the
proposals, you should keep in mind that certain individuals promoting the
proposals and/or soliciting proxies on behalf of the Company have interests in
the proposals that may be different from, or in addition to, your interests as a
stockholder. In connection with the IPO, the Company issued an option for
consideration of $100 to FBWI to purchase up to a total of 700,000 units. This
option was issued upon closing of the initial public offering. The units that
would be issued upon exercise of this option are identical to those sold in the
IPO, except that each of the warrants underlying this option entitles the holder
to purchase one share of our common stock at a price of $6.25. This
Underwriter's Purchase Option ("UPO") is exercisable at $7.50 per unit at the
latter of one year from the effective date, or the consummation of a business
combination and may be exercised on a cashless basis. The UPO has a life of four
years from the effective date. For discussion about the status of these
warrants following the special meeting, see the section entitled "- Status of
Outstanding Warrants Following the Special Meeting of Stockholders." If the
stockholders approve the Article Five Elimination Proposal, FBWI has agreed to
release the obligations of the Company under the UPO.
In connection with our IPO, FBWI deposited $1,305,000 (2.25% of the gross
proceeds, excluding the proceeds from any exercise of the over-allotment option)
attributable to the underwriters' deferred non-accountable expense allowance
($0.135 per Unit) into the trust account until the earlier of the completion of
a business combination or the liquidation of the trust account. FBWI will
forfeit any rights to or claims against such proceeds because we will not timely
complete a business combination.
PROPOSAL ONE
THE ARTICLE FIVE ELIMINATION PROPOSAL
The Company is proposing to eliminate the blank check company-related
provisions, including the Fifth Article of the Company's certificate of
incorporation.
The Company's certificate of incorporation requires us to dissolve and
liquidate the Company as soon as reasonably practicable after the Trust Fund
distribution. In the judgment of our board of directors, the elimination of
blank check company restrictions proposal is desirable because it removes the
requirement to dissolve the Company and allows it to continue as a corporate
entity. Additionally, the Fifth Article relates to the operation of the Company
as a blank check company prior to the Trust Fund distribution or consummation of
a qualifying business combination. Among the Fifth Article's sections, it
requires that IPO proceeds be held in the Trust Fund until a business
combination or liquidation of the Company has occurred and also requires that
the terms of a proposed business combination be submitted for approval by the
Company's stockholders. These provisions would restrict the Company's ability
to pursue the acquisition of one or more operating companies and related
financings after the distribution of the Trust Fund to the holders of the Common
stock.
The adoption of the Article Five Elimination Proposal will require the
affirmative vote of a majority of the outstanding shares of the Company's common
stock on the record date.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF
THE ARTICLE FIVE ELIMINATION PROPOSAL.
21
PROPOSAL TWO
THE AUTHORIZED SHARE PROPOSAL
The Company is proposing to amend the Company's certificate of
incorporation to increase the authorized shares of common stock from 50,000,000
shares to 200,000,000 shares of common stock. If the Article Five Elimination
Proposal is not adopted, the Authorized Share Proposal will not be presented at
the special meeting. A copy of the Board of Director resolutions approving the
increase in authorized common shares appears as Annex II to this Proxy
Statement.
On March ____, 2008, 50,000,000 shares of the Common Stock were authorized,
and 16,516,667 shares of the Common Stock were issued and outstanding. As of
such date, _________ shares of the Company's Common Stock were reserved for
issuance upon exercises of outstanding options and warrants. The Authorized
Share Proposal would increase the number of the Company's authorized shares of
Common Stock to 200,000,000, thus permitting the Company to issue an additional
150,000,000 shares of Common Stock not currently authorized. Each additional
share of Common Stock authorized by the Authorized Share Proposal would have the
same rights and privileges as each share of Common Stock currently authorized or
outstanding. The holders of the Company's existing outstanding shares of Common
Stock will have no preemptive right to purchase any additional shares authorized
by the Authorized Share Proposal. The issuance of a large number of additional
shares of Common Stock (including any comprising a part of the additional shares
authorized by the Authorized Share Proposal) would substantially reduce the
proportionate interest that each presently outstanding share of Common Stock has
with respect to dividends, voting, and the distribution of assets upon
liquidation.
The Board of Directors believes that it is in the best interests of the
Company and its stockholders to adopt the Authorized Share Proposal so as to
have issuable additional authorized but unissued shares of Common Stock in an
amount believed to be adequate. The Board of Directors believes that an
additional 150,000,000 authorized shares of Common Stock would be adequate.
During its discussions with potential merger candidates, management realized
that the Company's capital structure was not appropriate for the type of merger
transaction that the Company was approving. Specifically, in connection with
the proposed Multi-Shot transaction, the Company was requested to increase
significantly the number of authorized shares of Common Stock. In anticipation
of a similar need to do so in the future and to avoid additional costs
associated with regulatory compliance, the Company's Board of Directors believes
it to be in the best interests of the Company and its stockholders to increase
significantly the number of authorized shares of Common Stock at this time.
The additional shares authorized by the Authorized Share Proposal will be
available for issuance from time to time by the Company at the discretion of the
Board of Directors, normally without further stockholder action or notification
(except as may be required for a particular transaction by applicable law,
requirements of regulatory agencies or by stock exchange rules). The Board of
Directors does not anticipate seeking authorization from the Company's
stockholders for the issuance of any of the shares of Common Stock authorized by
the Authorized Share Proposal. The availability of such shares for issuance in
the future will give the Company greater flexibility and permit such shares to
be issued without the expense and delay of a special stockholders' meeting.
However, there can be no assurance that stockholders would approve of all or
even any of the stock issuances undertaken with the additional share authorized
by the Authorized Share Proposal.
The additional shares authorized by the Authorized Share Proposal could be
issued for any proper corporate purpose including, but not limited to, future
equity and convertible debt financings, acquisitions of property or securities
of other corporations, debt conversions and exchanges, exercise of current and
future options and warrants, for issuance under the Company's future employee
benefit plans, stock dividends and stock splits. Despite the varied possible
uses of the additional shares authorized by the Authorized Share Proposal, the
Company expects that the most likely immediate use of the additional shares
would be to raise funds to finance the Company's operations and to satisfy or
reduce outstanding indebtedness (including indebtedness owed to the Company's
officers and directors, which currently totals approximately $825,000) as may be
necessary to make the Company suitable for a merger and acquisition transaction.
The Company is not now seeking such funds and has not entered into any binding
or non-binding agreement to receive any funds or to issue any shares of Common
Stock to be authorized pursuant to the Authorized Share Proposal or otherwise,
nor does the Company have any preliminary or definitive plans for issuing shares
to eliminate or reduce outstanding indebtedness. There can be no assurance that
the Company will be successful in its efforts to procure additional funds, or
(if successful in procuring additional funds) there can be no assurance as to
the terms and conditions pursuant to which the funds may be provided. Moreover,
there can be no assurance that the Company will be successful in issuing shares
to eliminate or reduce outstanding indebtedness, or (if successful in
eliminating or reducing) there can be no assurance as to the terms and
conditions pursuant to which the funds may be provided. However, the number of
shares to be issued in connection with a future financing, or debt elimination
or reduction could conceivably be large enough that control of the Company could
change as a result. The Board of Directors is required to make each
determination to issue shares of Common Stock based on its judgment as to the
best interests of the stockholders and the Company. The Company believes that
the issuance of equity securities in a future financing or an indebtedness
elimination or reduction (even indebtedness owed to the Company's officers and
directors) will not be subject to stockholder approval if the Company's common
stock is not then listed on a national exchange or traded on Nasdaq.
Accordingly, you may not be entitled to vote on any such financing, or
elimination or reduction by the Company.
22
The additional shares authorized by the Authorized Share Proposal are not
intended as an anti-takeover device, and they are not expected to function
unintentionally as one. However, the Board of Directors could issue shares of
Common Stock in a manner that makes more difficult or discourages an attempt to
obtain control of the Company by means of a merger, tender offer, proxy contest
or other means, although the Board of Directors has no present intention of
doing so. When, in the judgment of the Board of Directors, the issuance of
shares under such circumstances would be in the best interest of the
stockholders and the Company, such shares could be privately placed with
purchasers favorable to the Board of Directors in opposing such action. The
issuance of new shares could thus be used to dilute the stock ownership of a
person or entity seeking to obtain control of the Company if the Board of
Directors considers the action of such entity or person not to be in the best
interest of the stockholders and the Company. The existence of the additional
authorized shares could also have the effect of discouraging unsolicited
takeover attempts. The Company is not aware of any present efforts by any
person to obtain control of the Company.
DISSENTERS' RIGHTS, BOARD RECOMMENDATION AND REQUIRED APPROVAL
Under Delaware corporation law and the Company's Certificate of
Incorporation and bylaws, holders of Common Stock will not be entitled to
dissenters' rights with respect to the Authorized Share Proposal.
The adoption of the Authorized Share Proposal will require the affirmative
vote of a majority of the outstanding shares of the Company's common stock on
the record date, voting together as a single class.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF
THE AUTHORIZED SHARE PROPOSAL.
PROPOSAL THREE
THE REVERSE SPLIT PROPOSAL
GENERAL
The Company is proposing to amend the Company's certificate of
incorporation to effect a ten-for-one reverse stock split of Common Stock, in
which every 10 shares of Common Stock outstanding as of the effective date of
the amendment will be converted into one share of Common Stock. If the Article
Five Elimination Proposal is not adopted, the Reverse Stock Split Proposal will
not be presented at the special meeting. A copy of the Board of Director
resolutions approving the reverse stock split appears as Annex III to this Proxy
Statement.
The Reverse Stock Split Proposal would reduce the number of outstanding
shares of Common Stock to approximately 10% of the number of shares currently
outstanding. Accordingly the Reverse Stock Split Proposal would decrease the
number of outstanding shares of Common Stock to approximately 1,651,666 shares.
The Reverse Stock Split Proposal will not affect the proportionate equity
interest in the Company of any holder of the Common Stock, subject to the
provisions for the elimination of fractional shares as described below. If the
Reverse Stock Split Proposal is approved, each outstanding share of Common Stock
will be entitled to one vote at each meeting of stockholders of the Company, as
is the case with each currently outstanding share. While a reduced number of
outstanding shares of Common Stock could adversely affect the liquidity of the
Common Stock, the Board of Directors does not believe that this is likely to
happen.
The Reverse Stock Split Proposal is not intended as an anti-takeover device
and it is not expected to function unintentionally as one. The Company is not
aware of any present efforts by any person to obtain control of the Company.
In addition, the Reverse Stock Split Proposal is not intended as a "going
private transaction" covered by Rule 13e-3 under the Securities Exchange Act of
1934, and it is not expected to function unintentionally as one.
23
Based on its knowledge of reverse merger transactions, the Board of
Directors believes that proportionately reducing the number of outstanding
shares of Common Stock at this time will make the Company more attractive as a
merger candidate in the future, particularly in view of the fact that the
Company will cease to have any meaningful funds once the amounts in the Trust
Fund are distributed. In anticipation of a need to undertake a reverse stock
split in the future in connection with a reverse merger transaction and to avoid
additional costs associated with regulatory compliance, the Company's Board of
Directors believes it to be in the best interests of the Company and its
stockholders to effect a reverse stock split at this time. While management
believes that the Reverse Stock Split Proposal will make the Company more
attractive to potential merger candidates, there can be no assurance that this
will necessarily be true. There can be no assurance that the market price of a
share of Common Stock after the Reverse Stock Split Proposal will be ten times
the market price if the Reverse Stock Split Proposal is not implemented, that
the marketability of the Common Stock will increase, or that the Reverse Stock
Split Proposal will otherwise have the desired effects described. The Board of
Directors desires to enhance the attractiveness of the Company as a merger
candidate. The Board of Directors believes that the attractiveness of the
Company as such will be significantly less, and efforts to enhance the value of
the Common Stock will be impaired, if the Reverse Stock Split Proposal is not
approved and implemented.
EXCHANGE OF STOCK CERTIFICATES AND ELIMINATION OF FRACTIONAL SHARE INTERESTS
If the Reverse Stock Split Proposal is approved by the requisite number of
shares of Common Stock entitled to vote at the special meeting, a Certificate of
Amendment effecting the Reverse Stock Split Proposal will be filed in the Office
of the Secretary of State of Delaware promptly after such approval. The Reverse
Stock Split Proposal would become effective as of the close of business on the
date of the filing of the Certificate of Amendment (such filing is referred to
hereinafter as the "Filing"). Stockholders of the Company of record as of the
Filing will then be furnished the necessary materials and instructions to effect
the exchange of their certificates representing Common Stock outstanding prior
to the Reverse Stock Split Proposal (referred to hereinafter as "Pre-Split
Shares") for new certificates representing Common Stock after the Reverse Stock
Split Proposal (referred to hereinafter as "Post-Split Shares"). Certificates
representing Pre-Split Shares subsequently presented for transfer will not be
transferred on the books and records of the Company but will be returned to the
tendering person for exchange. Stockholders of the Company should not submit
any certificates until requested to do so. In the event any certificate
representing Pre-Split Shares is not presented for exchange upon request, any
dividends which may be declared after the date of the special meeting with
respect to the shares represented by such certificate will be withheld by the
Company until such certificate has been properly presented for exchange, at
which time all such withheld dividends which have not yet been paid to a public
official pursuant to the abandoned property laws will be paid to the holder
thereof or his designee, without interest.
No fractional shares will be issued. Instead, all fractional shares will
be rounded up to one whole share.
FEDERAL INCOME TAX CONSEQUENCES
This discussion is for general information only and does not discuss
consequences that may apply to special classes of taxpayers (e.g., non-resident
aliens, broker-dealers, or insurance companies). Stockholders are urged to
consult their own tax advisors to determine the particular consequences to them
of the Reverse Stock Split Proposal.
The exchange of Pre-Split Shares for Post-Split Shares will not result in
recognition of gain or loss for federal income tax purposes, excepting cash
received for fractional shares, if any, as described in the next paragraph.
Otherwise, your holding period and tax basis of your Pre-Split Shares are
applied in total to your Post-Split Shares.
Holders' of Pre-Split Shares who receive cash in lieu of a fractional share
interest will be treated as if the Company purchased such fractional share
interest. Such holder may recognize gain or loss measured by the difference
between the amount of cash received and the pro rata basis in his Pre-Split
Shares.
24
DISSENTERS' RIGHTS, BOARD RECOMMENDATION AND REQUIRED APPROVAL
Under Delaware corporation law and the Company's Certificate of
Incorporation and bylaws, holders of Common Stock will not be entitled to
dissenters' rights with respect to the Reverse Stock Split Proposal.
The adoption of the Reverse Stock Split Proposal will require the
affirmative vote of a majority of the outstanding shares of the Company's common
stock on the record date, voting together as a single class.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF
THE REVERSE STOCK SPLIT PROPOSAL.
PROPOSAL FOUR
THE ADJOURNMENT PROPOSAL
In the event there are not sufficient votes at the time of the special
meeting to adopt the Article Five Elimination Proposal, the Authorized Share
Proposal, and/or the Reverse Split Proposal, the Board of Directors may submit a
proposal to adjourn the special meeting to a later date, or dates, if necessary,
to permit further solicitation of proxies.
The adoption of the Adjournment Proposal requires the affirmative vote of a
majority of the shares of common stock represented in person or by proxy and
voting at the special meeting, if the Adjournment Proposal is presented.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE ADJOURNMENT
PROPOSAL.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the common stock of the Company as of the Record Date, which
amounts include shares of common stock that may be acquired by such persons
within 60 days from the Record Date by:
* each person known by the Company to be the beneficial owner of
more than 5% of its outstanding shares of common stock based
solely upon the amounts and percentages as are contained in the
public filings of such persons as of the Record Date;
* each of the Company's officers and directors; and
* all of the Company's officers and directors as a group.
Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all shares of
common stock beneficially owned by them.
Based solely upon information contained in public filings, as of the Record
Date, the following stockholders beneficially own greater than five (5%) percent
of the Company's issued and outstanding common stock as such amounts and
percentages (based on 16,516,667 shares outstanding on the Record Date) are
reflected in the public filings of such stockholder:
25
AMOUNT
AND NATURE PERCENTAGE
OF BENEFICIAL OF OUTSTANDING
NAME AND OF BENEFICIAL OWNER(1) OWNERSHIP COMMON STOCK
-------------------------------------------------------------------------------
James P. Wilson (2)(4) 1,781,130 10.78%
Keith D. Spickelmier (3)(4) 1,457,287 8.79%
Herbert C. Williamson II (4) 26,625 *
All directors and executive officers as a group
(3 individuals) 3,265,042 19.77%
Andrew M. Weiss (5) 4,029,913 24.40%
Weiss Asset Management, LLC (6) 2,670,024 16.20%
Weiss Capital, LLC (6) 1,359,889 8.20%
Staley Capital Advisers, Inc. (7) 1,716,000 10.30%
D.B. Zwirn & Co, L.P. (8) 1,395,685 8.45%
State Teachers Retirement Board of Ohio (9) 1,100,000 6.66%
HBK Investments L.P. (10) 981,740 5.94%
|
* Less than one percent.
(1) Unless otherwise indicated, the business address of each of the
individuals is 4400 Post Oak Parkway, Suite 2530, Houston, Texas 77027.
(2) Mr. Wilson is our Chairman of the Board and Chief Executive Officer. Mr.
Wilson also owns 366,668 warrants issued in the private placement immediately
prior to the initial public offering. Each warrant entitles the holder to
purchase one share of common stock at $5.00 per share. The warrants will become
exercisable on the later of the completion of (i) a business combination by us
and (ii) April 10, 2007, and will expire on April 10, 2010.
(3) Mr. Spickelmier is our President and Secretary. Mr. Spickelmier also
owns 300,000 warrants issued in the private placement immediately prior to the
initial public offering. Each warrant entitles the holder to purchase one share
of common stock at $5.00 per share. The warrants will become exercisable on the
later of the completion of (i) a business combination by us and (ii) April 10,
2007, and will expire on April 10, 2010.
(4) Each of these individuals is a director.
(5) Based on information contained in the Schedule 13G/A filed by Mr. Weiss
(among others) on February 8, 2008. Mr. Weiss is the Managing Member of each of
Weiss Asset Management, LLC and Weiss Capital, LLC., and accordingly may be
deemed the beneficial owner of 2,670,024 shares owned by Weiss Asset Management,
LLC (and also reflected in the table below with respect to Weiss Asset
Management, LLC) and the 1,359,889 shares owned by Weiss Capital, LLC (and also
reflected in the table below with respect to Weiss Capital, LLC).
(6) These shares are also included in the table in the figure of shares
beneficially owned by Andrew M. Weiss.
(7) Based upon information contained in the Schedule 13G/A filed by Staley
Capital Advisers, Inc. on February 8, 2008.
(8) Based upon information contained in the Schedule 13F filed on December
31, 2007 by D.B. Zwirn & Co., L.P.
26
(9) Based on information contained in the Schedule 13G/A filed by the State
Teachers Retirement Board of Ohio on November 14, 2007.
(10) Based on information contained in the Schedule 13G/A filed by HBK
Investments L.P. on February 8, 2008. HBK Investments L.P. has delegated
discretion to vote and dispose of these shares to HBK Services LLC ("Services").
Services is under common control with HBK Investments L.P. ("Investments"). As
a result, each of Services and Investments may each be deemed the beneficial
owner of these Shares. However, each of Services and Investments expressly
declare that their relationships as such should not be construed as an admission
that they are, for the purpose of Section 13(d) or 13(g) of the Securities
Exchange Act of 1934, beneficial owners of these securities.
PRICE RANGE OF SECURITIES AND DIVIDENDS
GENERAL
The shares of our common stock, warrants and units are currently quoted on
the American Stock Exchange under the symbols JKA, JKA.WS and JKA.U,
respectively. The closing price per share of the Company's common stock,
warrants and units as reported on the American Stock Exchange on _____________
_____, 2008, was $_____, $_____ and $_____, respectively. Each unit of ours
consists of one share of our common stock and two redeemable common stock
purchase warrants. Our warrants became separable from our common stock on May
11, 2006. Each warrant entitles the holder to purchase from us one share of
common stock at an exercise price of $5.00 commencing the later of the
completion of a business combination or April 10, 2007. Our warrants will
expire at 5:00 p.m., New York City time, on April 10, 2010, or earlier upon
redemption. Prior to April 17, 2006, there was no established public trading
market for our common stock.
We do not currently have any authorized or outstanding equity compensation
plans.
The following table sets forth, for the calendar quarter indicated, the
quarterly high and low sales prices of our units, common stock and warrants as
reported on the American Stock Exchange since our units commenced public trading
on April 18, 2006 and since our common stock and warrants commenced public
trading on May 11, 2006.
COMMON STOCK WARRANTS UNITS
QUARTER ENDED HIGH LOW HIGH LOW HIGH LOW
June 30, 2006 $ 5.45 $ 5.31 $ 0.55 $ 0.32 $ 6.28 $ 6.02
September 30, 2006 $ 5.65 $ 5.31 $ 0.46 $ 0.28 $ 6.35 $ 5.80
December 31, 2006 $ 5.65 $ 5.40 $ 0.52 $ 0.24 $ 6.57 $ 5.89
March 31, 2007 $ 5.80 $ 5.58 $ 0.54 $ 0.37 $ 6.57 $ 6.25
June 30, 2007 $ 5.89 $ 5.65 $ 0.85 $ 0.54 $ 7.40 $ 6.55
September 30, 2007 $ 5.92 $ 5.70 $ 0.43 $ 0.17 $ 7.40 $ 5.95
December 30, 2007 $ 6.02 $ 5.49 $ 0.42 $ 0.19 $ 6.55 $ 6.00
|
March 31, 2008 $ 6.03 $ 5.65 $ 0.25 $ * $ 6.25 $ 5.82
* Less than $.01
HOLDERS
As of March 31, 2008, there was one holder of record of our units, five
holders of record of our common stock and one holder of record of our warrants.
27
DIVIDENDS
We have not paid any cash dividends on our common stock to date and do not
intend to pay dividends prior to the completion of a business combination. The
payment of dividends in the future, assuming we successfully complete a business
combination, will be contingent upon our revenue and earnings, if any, capital
requirements and general financial condition subsequent to completion of a
business combination. The payment of any dividends subsequent to a business
combination will be within the discretion of our Board of Directors at such
time. It is the present intention of our Board to retain all earnings, if any,
for use in our business operations and, accordingly, our Board does not
anticipate declaring any dividends in the foreseeable future.
DESCRIPTION OF SECURITIES
GENERAL
We are authorized to issue 50,000,000 shares of common stock, par value
$.0001 per share, and 1,000,000 shares of preferred stock, par value $.0001 per
share. As of the Record Date, 16,516,667 shares of common stock are
outstanding, held by five record holders. No shares of preferred stock are
currently outstanding.
UNITS
Each unit consists of one share of common stock and two warrants. Each
warrant entitles the holder to purchase one share of common stock. The common
stock and warrants began to trade separately on May 11, 2006.
COMMON STOCK
As of the Record Date, we have 16,516,667 shares of common stock
outstanding. Our stockholders are entitled to one vote for each share held of
record on all matters to be voted on by stockholders.
If we are forced to liquidate prior to a business combination, the holders of
the IPO Shares are entitled to share ratably in the Trust Fund, inclusive of any
interest, and any net assets remaining available for distribution to them after
payment of related costs, expenses and liabilities. Our initial stockholders
have agreed to waive their rights to share in any distribution with respect to
common stock owned by them prior to the initial public offering, including units
purchased in the private placement immediately prior to such offering, if we are
forced to liquidate.
Our stockholders have no conversion, preemptive or other subscription
rights and there are no sinking fund or redemption provisions applicable to the
common stock, except that public stockholders have the right to have their
shares of common stock converted to cash equal to their pro rata share of the
Trust Fund if they vote against the business combination and the business
combination is approved and completed. Public stockholders, who purchased and
still own units or common stock, and who convert their stock into their share of
the Trust Fund still have the right to exercise the warrants that they received
as part of the units in our initial public offering or subsequently purchased.
PREFERRED STOCK
Our certificate of incorporation, as amended, authorizes the issuance of
1,000,000 shares of blank check preferred stock with such designation, rights
and preferences as our Board may determine from time to time. No shares of
preferred stock have been issued or registered. Accordingly, our Board is
empowered, without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of common stock, although the
underwriting agreement prohibits us, prior to a business combination, from
issuing preferred stock which participates in any manner in the proceeds of the
Trust Fund, or which votes as a class with the common stock on a business
combination. We may issue some or all of the preferred stock to effect a
business combination. In addition, the preferred stock could be utilized as a
method of discouraging, delaying or preventing a change in control of us.
Although we do not currently intend to issue any shares of preferred stock, we
cannot assure you that we will not do so in the future.
28
WARRANTS
We currently have 26,450,000 outstanding warrants. Each warrant entitles
the registered holder to purchase one share of our common stock at a price of
$5.00 per share, subject to adjustment as discussed below, at any time
commencing on the later of:
* the completion of a business combination, and
* April 10, 2007.
The warrants expire on April 10, 2010 at 5:00 p.m., New York City local
time or earlier upon redemption.
We may call the warrants for redemption:
* in whole and not in part;
* at a price of $.01 per warrant;
* at any time after the warrants become exercisable;
* upon not less than 30 days' prior written notice of redemption to
each warrant holder;
* at such time an effective registration statement covering the
exercise of warrants is available; and
* if, and only if, the reported last sale price of the common stock
equals or exceeds $8.50 per share for any 20 trading days within
a 30 trading day period ending on the third business day prior to
the notice of redemption to warrant holders.
The warrants were issued in registered form under a warrant agreement
between Continental Stock Transfer & Trust Company, as warrant agent, and us. We
may not call the warrants for redemption at any time an effective registration
statement covering the warrant exercise is unavailable. You are urged to review
a copy of the warrant agreement, which was filed as an exhibit to the
registration statement in connection with our initial public offering, for a
complete description of the terms and conditions applicable to the warrants.
The exercise price and number of shares of common stock issuable on
exercise of the warrants may be adjusted in certain circumstances, including in
the event of a stock dividend, or our recapitalization, reorganization, merger
or consolidation. However, the warrants will not be adjusted for issuances of
common stock at a price below their respective exercise prices.
The warrants may be exercised upon surrender of the warrant certificate on
or prior to the expiration date at the offices of the warrant agent, with the
exercise form on the reverse side of the warrant certificate completed and
executed as indicated, accompanied by full payment of the exercise price, by
certified check payable to us, for the number of warrants being exercised. The
warrant holders do not have the rights or privileges of holders of common stock,
including any voting rights until they exercise their warrants and receive
shares of common stock. After the issuance of shares of common stock upon
exercise of the warrants, each holder will be entitled to one vote for each
share held of record on all matters to be voted on by stockholders.
No warrants will be exercisable unless at the time of exercise a
prospectus relating to common stock issuable upon exercise of the warrants is
current and the common stock has been registered or qualified or deemed to be
exempt under the securities laws of the state of residence of the holder of the
warrants. Under the terms of the warrant agreement, we have agreed to meet these
conditions and use our best efforts to maintain a current prospectus relating to
common stock issuable upon exercise of the warrants until the expiration of the
warrants. However, we cannot assure you that we will be able to do so. The
warrants may be deprived of any value and the market for the warrants may be
limited if the prospectus relating to the common stock issuable upon the
exercise of the warrants is not current or if the common stock is not qualified
for sale as a result of the Company's registering such shares, or unless the
shares are exempt from qualification in the jurisdictions in which the holders
of the warrants reside.
29
No fractional shares will be issued upon exercise of the warrants. If, upon
exercise of the warrants, a holder would be entitled to receive a fractional
interest in a share, we will, upon exercise, round up or down to the nearest
whole number the number of shares of common stock to be issued to the warrant
holder.
DIVIDENDS
On April 10, 2006, the Board declared a stock dividend of 0.183333 shares
of common stock on each share of common stock then issued and outstanding. The
stock dividend was paid prior to the private placement and initial public
offering. We have not paid any other dividends on our common stock to date and
do not intend to pay any other dividends prior to the completion of a business
combination. The payment of dividends in the future will be contingent upon our
revenues and earnings, if any, capital requirements and general financial
condition subsequent to completion of a business combination. The payment of any
dividends subsequent to a business combination will be within the discretion of
our then current Board. It is the present intention of our Board to retain all
earnings, if any, for use in our business operations and, accordingly, our Board
does not anticipate declaring any dividends in the foreseeable future.
OUR TRANSFER AGENT AND WARRANT AGENT
The transfer agent for our securities and warrant agent for our warrants is
Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York
10004.
SHARES ELIGIBLE FOR FUTURE SALE
As of March 31, 2008, we have 16,516,667 shares of common stock
outstanding. Of these shares, 13,225,000 shares are freely tradable without
restriction or further registration under the Securities Act, except for any
shares purchased by one or any of our affiliates within the meaning of Rule 144
under the Securities Act. The 333,334 shares included in the units purchased in
the private placement on April 10, 2006 by our officers and directors are
"restricted securities" as defined in Rule 144 and cannot be resold to the
public without registration for a period of one year from the closing of the
initial public offering. These units are also subject to a lock-up agreement
with the holders, us and the representative of the underwriters until we
complete a business combination. All of the remaining 2,958,333 shares are
restricted securities under Rule 144, in that they were issued in private
transactions not involving a public offering. Currently, each holder of these
shares is our affiliate. These 2,958,333 shares became eligible for sale under
Rule 144 commencing on May 19, 2006, subject to the restrictions set forth in
Rule 144 regarding sales by our affiliates. If one of the holders of these
shares ceases to be our affiliate, the shares held by such holder could be sold,
without restrictions, on the later of (i) May 19, 2007 or (ii) 90 days after
such holder ceases to be our affiliate. In addition, all of those shares have
been placed in escrow until six months after we consummate a business
combination and will only be released prior to that date subject to certain
limited exceptions. The 2,958,333 shares are subject to a cancellation
provision, if the merger transaction is approved, whereby 2,458,334 of such
shares will be cancelled.
"Restricted" shares must generally be sold in accordance with the
requirements of Rule 144 under the Act. Effective February 14, 2008, the SEC
revised Rule 144. In general, under Rule 144 as revised, six months must have
elapsed since the later of the date of acquisition of restricted shares from the
Company or any affiliate of the Company. After the six-month holding period has
run, holders who are not affiliates of the Company may sell all or any portion
of their shares so long as the Company is current in its SEC filings, and after
the running of a one-year holding period, they may sell regardless of whether or
not the Company is current in its SEC filings. After the six-month holding
period has run, holders of restricted securities who are affiliates of the
Company are entitled to sell within any three-month period such number of
restricted or control shares that does not exceed the greater of 1% of the then
outstanding shares or (so long as the Company's securities are still listed on a
national exchange, and if greater) the average weekly trading volume of shares
during the four calendar weeks preceding the date on which notice of the sale is
filed with the Commission. Sales by affiliates under Rule 144 are also subject
to certain restrictions on the manner of selling, notice requirements and the
availability of current public information about the Company. Notwithstanding
the preceding, based on possible interpretations of the revised Rule 144, the
Company believes that, because the Company is a "shell" company, all of the
Company's currently outstanding shares held by affiliates must be held for a
period of one year after the filing with the SEC of extensive information that
the Company is no longer a "shell" company before these shares may be sold
pursuant to Rule 144.
30
REGISTRATION RIGHTS
The holders of our 2,958,333 issued and outstanding shares of common stock prior
to our initial public offering are entitled to registration rights pursuant to
an agreement effective as of April 10, 2006. The 333,334 units purchased by such
persons or their designees in the private placement are also entitled to
registration rights pursuant to the same agreement. The holders of the majority
of these shares are entitled to make up to two demands that we register these
shares. Beginning 180 days following the effective date of a business
combination, the holders of the majority of these shares can elect to exercise
these registration rights at any time after the date on which these shares of
common stock are released from escrow. All of the above stockholders also have
certain "piggy-back" registration rights on registration statements filed
subsequent to the date on which certain of these shares of common stock are
released from escrow. In addition, the holders of the units underlying warrants
for 1,400,000 shares of common stock and 700,000 shares of common stock issuable
under the Ferris, Baker Watts, Inc. purchase option are entitled to make one
demand that we register these securities at the election of the holders of 51%
of such securities. In addition, these holders have certain "piggy-back"
registration rights. We will bear the expenses incurred in connection with the
filing of any such registration statements.
DELAWARE ANTI-TAKEOVER LAW.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law regulating corporate takeovers. This section prevents certain
Delaware corporations, under certain circumstances, from engaging in a "business
combination" with:
* a stockholder who owns 15% or more of our outstanding voting
stock (otherwise known as an "interested stockholder");
* an affiliate of an interested stockholder; or
* an associate of an interested stockholder,
for three years following the date that the stockholder became an interested
stockholder. A "business combination" includes a merger or sale of more than 10%
of our assets. However the above provisions of Section 203 do not apply if:
* our Board approves the transaction that made the stockholder
an "interested stockholder," prior to the date of the
transaction;
* after the completion of the transaction that resulted in the
stockholder becoming an interested stockholder, that stockholder
owned at least 85% of our voting stock outstanding at the time
the transaction commenced, other than statutorily excluded shares;
or
* on or subsequent to the date of the transaction, the business
combination is approved by our Board and authorized at a meeting
of our stockholders, and not by written consent, by an affirmative
vote of at least two-thirds of the outstanding voting stock not
owned by the interested stockholder.
This statute could prohibit or delay mergers or other change in control
attempts, and thus may discourage attempts to acquire us.
31
WHERE YOU CAN FIND MORE INFORMATION
The Company files reports, proxy statements and other information with the
SEC as required by the Securities Exchange Act of 1934, as amended. You may read
and copy reports, proxy statements and other information filed by The Company
with the SEC at the SEC public reference room located at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain
copies of the materials described above at prescribed rates by writing to the
Securities and Exchange Commission, Public Reference Section, 100 F Street,
N.E., Washington, D.C. 20549. You may access information regarding The Company
at the SEC web site containing reports, proxy statements and other information
at: http://www.sec.gov. Information and statements contained in this proxy
statement are qualified in all respects by reference to the relevant annex to
this proxy statement. Only one proxy statement is being delivered to multiple
security holders who share an address. However, if you would like an additional
separate copy, please contact us at the address set forth below and an
additional copy will be sent to you free of charge. If you would like
additional copies of this document or if you have questions about the proposals,
you should contact via phone or in writing:
JK Acquisition Corp.
4400 Post Oak Parkway, Suite 2530Houston, Texas 77027
Attn: Corporate Secretary
Telephone: 713/978-7557
STOCKHOLDER PROPOSALS
Stockholders wishing to submit proposals for consideration by the Company's
Board of Directors at the Company's next Annual Meeting of Stockholders should
submit them in writing to the attention of the President of the Company a
reasonable time before the Company begins to print and mail its proxy materials,
so that the Company may consider such proposals for inclusion in its proxy
statement and form of proxy for that meeting. The Company does not now have any
definitive plans regarding the possible date of its next Annual Meeting.
By Order of the
Board of Directors,
James P. Wilson,
Chairman of the Board,
Chief Executive Officer
Houston, Texas
______________ _____, 2008
32
ANNEX I
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
JK ACQUISITION CORP.
The undersigned, James P. Wilson, hereby certifies that:
ONE: He is the duly elected and acting Secretary of the corporation.
TWO: The name of the corporation is JK Acquisition Corp. and the
corporation was originally incorporated on May 11, 2005, pursuant to the General
Corporation Law of the State of Delaware under the name JK Acquisition Company.
THREE: The Certificate of Incorporation of the corporation shall be amended
and restated to read in full as follows:
I.
The name of the Corporation is JK Acquisition Corp. (the
"Corporation").
II.
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware ("GCL").
III.
The address, including street, number, city and county, of the
registered office of the Corporation in the State of Delaware is 1209 Orange
Street, in the City of Wilmington, County of New Castle, Delaware 19801. The
name of the registered agent of the Corporation in the State of Delaware at such
address is The Corporation Trust Company.
IV.
A. This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares the Corporation is authorized to issue is two hundred and one million
(201,000,000) shares, two hundred million (200,000,000) shares of which shall be
Common Stock (the "Common Stock") and one million (1,000,000) shares of which
shall be Preferred Stock (the "Preferred Stock"). The Preferred Stock shall have
a par value of $0.0001 per share and the Common Stock shall have a par value of
$0.0001 per share.
B. The rights, preferences, privileges, restrictions and other matters
relating to the Preferred Stock and the Common Stock are as follows:
1. Preferred Stock. The Board of Directors is expressly granted
authority to issue shares of the Preferred Stock, in one or more series, and to
fix for each such series such voting powers, full or limited, and such
designations, preferences and relative, participating, optional or other special
rights and such qualifications, limitations or restrictions thereof as shall be
stated and expressed in the resolution or resolutions adopted by the Board of
Directors providing for the issue of such series (a "Preferred Stock
Designation") and as may be permitted by the GCL. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the voting power of all of the then outstanding shares
of the capital stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, without a separate
vote of the holders of the Preferred Stock, or any series thereof, unless a vote
of any such holders is required pursuant to any Preferred Stock Designation.
2. Common Stock. Except as otherwise required by law or as otherwise
provided in any Preferred Stock Designation, the holders of the Common Stock
shall exclusively possess all voting power and each share of Common Stock shall
have one vote.
C. Upon the effectiveness of the filing with the Secretary of State of
Delaware of Articles of Amendment to the Certificate of Incorporation or a
Second Amended and Restated Certificate of Incorporation adding this paragraph
to the Corporation's certificate of incorporation, each ten (10) shares of
Common Stock issued and outstanding immediately prior to the filing of such
Articles of Amendment as aforesaid shall be combined into one (1) share of
validly issued, fully paid and non-assessable Common Stock. As soon as
practicable after such date, the Corporation shall request holders of the Common
Stock to be combined in accordance with the preceding to surrender certificates
representing their Common Stock to the Corporation's authorized agent, and each
such stockholder shall receive upon such surrender one or more stock
certificates to evidence and represent the number of shares of Common Stock to
which such stockholder is entitled after the combination of shares provided for
herein; provided, however, that this Corporation shall not issue fractional
shares of Common Stock in connection with this combination, but all fractional
shares that would otherwise result shall be rounded up to one whole share of
Common Stock.
V.
[INTENTIONALLY OMITTED]
VI.
The Corporation shall keep at its principal office a register for the
registration of the Preferred Stock and the Common Stock. Upon the surrender of
any certificate representing Preferred Stock or Common Stock at such place, the
Corporation shall, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares represented by the surrendered certificate. Each such new certificate
shall be registered in such name and shall represent such number of shares as is
requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate.
VII.
Upon receipt of evidence reasonably satisfactory to the Corporation
(an affidavit of the registered holder shall be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any certificate evidencing
shares of Preferred Stock or Common Stock, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.
VIII.
The Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Preferred Stock. If at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then-outstanding shares of Preferred Stock, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
I-2
IX.
Any notice required by the provisions of this Article IX shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All notices to stockholders shall be
addressed to each holder of record at the address of such holder appearing on
the books of the Corporation.
X.
The Corporation will pay all documentary, excise and similar taxes or
governmental charges imposed by the Corporation upon the issuance of shares of
Common Stock upon conversion of shares of Preferred Stock, excluding any tax or
other charge imposed in connection with any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the shares
of Preferred Stock so converted were registered.
XI.
The Corporation shall not amend its Certificate of Incorporation or
participate in any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, for the
purpose of avoiding or seeking to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation.
XII.
The Corporation is to have perpetual existence.
XIII.
A. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, repeal, alter,
amend or rescind the Bylaws.
B. The directors in their discretion may submit any contract or act for
approval or ratification at any annual meeting of the stockholders or at any
meeting of the stockholders called for the purpose of considering any such act
or contract, and any contract or act that shall be approved or be ratified by
the vote of the holders of a majority of the stock of the Corporation which is
represented in person or by proxy at such meeting and entitled to vote thereat
(provided that a lawful quorum of stockholders be there represented in person or
by proxy) shall be as valid and binding upon the Corporation and upon all the
stockholders as though it had been approved or ratified by every stockholder of
the Corporation, whether or not the contract or act would otherwise be open to
legal attack because of directors' interests, or for any other reason.
C. In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation; subject, nevertheless, to the provisions of the
statutes of Delaware, of this Certificate of Incorporation, and to any Bylaws
from time to time made by the stockholders; provided, however, that no by-law so
made shall invalidate any prior act of the directors which would have been valid
if such by-law had not been made
I-3
XIV.
The number of directors which shall constitute the whole Board of
Directors from time to time shall be fixed by, or in the manner provided in, the
Bylaws.
XV.
Election of directors at an annual or special meeting of stockholders
need not be by written ballot unless the Bylaws shall so provide.
XVI.
No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director;
provided that this Article XVI shall not eliminate or limit the liability of a
director (i) for any breach of such director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law, (iii)
under Section 174 of the General Corporation Law of the State of Delaware, or
(iv) for any transaction from which such director derived any improper personal
benefit. If the General Corporation Law of the State of Delaware is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware as so amended. No amendment to or
repeal of this Article XVI shall adversely affect any right or protection of any
director of the Corporation existing at the time of such amendment or repeal for
or with respect to acts or omissions of such director prior to such amendment or
repeal.
XVII.
A. Any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, other than an action by or in
the right of the Corporation, by reason of the fact that he is or was a
director, officer, employee, trustee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee
trustee or agent of another corporation, partnership, joint venture, trust or
other enterprise, expressly including service as a director, officer or in a
similar position with any exchange, board of trade, clearing corporation or
similar institution on which the Corporation or any other corporation a majority
of the stock of which is owned directly or indirectly by the Corporation had
membership privileges at the relevant time during which any such position was
held, shall be indemnified by the Corporation against expenses including
attorneys' fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful; provided that funds paid or required to be paid to any
person as a result of the provisions of this Article XVII shall be returned to
the Corporation or reduced, as the case may be, to the extent that such person
receives funds pursuant to an indemnification from any other corporation or
organization. Any such person who could be indemnified pursuant to the preceding
sentence except for the fact that the subject action or suit is or was by or in
the right of the Corporation shall be indemnified by the Corporation against
expenses including attorneys' fees actually or reasonably incurred by him in
connection with the defense or settlement of such action or suit, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
I-4
B. To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Article XVII.A above, or in defense of
any claim, issue or matter therein, he shall be indemnified by the Corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection therewith without the necessity of any action being taken by
the Corporation other than the determination, in good faith, that such defense
has been successful. In all other cases wherein such indemnification is provided
by this Article XVII, unless ordered by a court, indemnification shall be made
by the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct
specified in this Article XVII. Such determination shall be made (1) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (2) if such quorum is
not obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
holders of a majority of the shares of capital stock of the Corporation entitled
to vote thereon.
C. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person seeking
indemnification did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful. Entry of a judgment by consent as part of
a settlement shall not be deemed a final adjudication of liability for
negligence or misconduct in the performance of duty, nor of any other issue or
matter.
D. Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by the director, officer, employee
or agent involved to repay such amount unless it shall ultimately be determined
that he is entitled to be indemnified by the Corporation.
E. The indemnification hereby provided shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such person.
F. By action of the Board of Directors, notwithstanding any interest of
the directors in the action, the Corporation may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate, on
behalf of any person who is or was a director, owner, employee, trustee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee trustee or of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation shall have the power to indemnify him
against such liability under the provisions of this Article XVII.
XVIII.
The Corporation, to the full extent permitted by Section 145 of the
GCL, as amended from time to time, shall indemnify all persons whom it may
indemnify pursuant thereto. Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative, or
investigative action, suit or proceeding for which such officer or director may
be entitled to indemnification hereunder shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized hereby.
I-5
XIX.
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this Corporation, as the case
may be, and also on this Corporation.
* * *
FOUR: The foregoing Second Amended and Restated Certificate of
Incorporation has been duly adopted by the corporation's Board of Directors in
accordance with the provisions of Sections 228, 242 and 245 of the General
Corporation Law.
IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated
Certificate of Incorporation on ____________________ _____, 2008.
JK ACQUISITION CORP.
By: /s/ James P. Wilson
James P. Wilson Secretary
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I-6
ANNEX II
AUTHORIZED SHARE PROPOSAL AMENDMENT
BE IT RESOLVED, that the first paragraph of Article IV of the
Certificate of Incorporation of the Corporation be and hereby is amended to read
in its entirety as follows:
"A. This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares the Corporation is authorized to issue is two hundred and one million
(201,000,000) shares, two hundred million (200,000,000) shares of which shall be
Common Stock (the "Common Stock") and one million (1,000,000) shares of which
shall be Preferred Stock (the "Preferred Stock"). The Preferred Stock shall have
a par value of $0.0001 per share and the Common Stock shall have a par value of
$0.0001 per share."
II-1
ANNEX III
RESERVE STOCK SPLIT RESOLUTIONS
BE IT RESOLVED, that the Article IV of the Certificate of
Incorporation of the Corporation be and hereby is amended to add a last
paragraph, which shall read in its entirety as follows:
"C. Upon the effectiveness of the filing with the Secretary
of State of Delaware of Articles of Amendment to the Certificate of
Incorporation or a Second Amended and Restated Certificate of Incorporation
adding this paragraph to the Corporation's certificate of incorporation, each
ten (10) shares of Common Stock issued and outstanding immediately prior to the
filing of such Articles of Amendment as aforesaid shall be combined into one (1)
share of validly issued, fully paid and non-assessable Common Stock. As soon as
practicable after such date, the Corporation shall request holders of the Common
Stock to be combined in accordance with the preceding to surrender certificates
representing their Common Stock to the Corporation's authorized agent, and each
such stockholder shall receive upon such surrender one or more stock
certificates to evidence and represent the number of shares of Common Stock to
which such stockholder is entitled after the combination of shares provided for
herein; provided, however, that this Corporation shall not issue fractional
shares of Common Stock in connection with this combination, but all fractional
shares that would otherwise result shall be rounded up to one whole share of
Common Stock."
III-1
JK ACQUISITION CORP.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON ___________ _____, 2008
The undersigned hereby appoints James P. Wilson and Keith D. Spickelmier, and
each of them, as proxies of the undersigned, with full power of substitution, to
vote all of the shares of stock of JK Acquisition Corp. that the undersigned may
be entitled to vote at the Special Meeting of Stockholders of JK Acquisition
Corp. to be held on ___________ _____, 2008, at
___________________________________, at ____:00 ___.m. (Central Time), and at
any and all postponements, continuations and adjournments thereof, with all
powers that the undersigned would possess if personally present, upon and in
respect of the following matters and in accordance with the following
instructions.
IF YOU DO NOT RETURN YOUR PROXY CARD WITH AN INDICATION OF HOW YOU WISH TO VOTE,
IT WILL HAVE THE SAME EFFECT AS A VOTE "AGAINST" THREE PROPOSED AMENDMENTS TO
OUR CERTIFICATE OF INCORPORATION. FAILURE TO VOTE WITH RESPECT TO THE
ADJOURNMENT PROPOSAL WILL HAVE NO EFFECT ON THIS PROPOSAL, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT.
IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH YOUR INSTRUCTIONS. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED
"FOR" EACH OF THE PROPOSALS. EACH OF THE DIRECTORS AND OFFICERS OF JK
ACQUISITION CORP. WILL RETURN AN UNMARKED PROXY WITH DIRECTIONS TO VOTE THEIR
RESPECTIVE SHARES "FOR" ALL OF THE PROPOSALS.
(continued and to be signed on reverse)
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF PROPOSALS 1, 2, 3
AND 4.
1. Proposal to approve the removal of Fifth Article from the company's
certificate of incorporation (Proposal 1).
_____ FOR _____ AGAINST _____ ABSTAIN
2. Proposal to approve the increase in the authorized shares of the
company's common stock from 50,000,000 shares to 200,000,000 shares (Proposal
2).
_____ FOR _____ AGAINST _____ ABSTAIN
3. Proposal to approve a one-for-ten reverse stock split of the company's
common stock (Proposal 3).
_____ FOR _____ AGAINST _____ ABSTAIN
4. Proposal to the adjournment of the special meeting to a later date or
dates, if necessary, to permit further solicitation of proxies in the event
there are insufficient votes at the time of the special meeting to approve any
or all of the other three proposals (Proposal 4).
_____ FOR _____ AGAINST _____ ABSTAIN
DATE _________________________ 2008
_________________________________ Signature
PLEASE MARK SIGN DATE AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE _____________________________________
------------------------------
Signature if held jointly
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Please sign exactly as your name appears hereon. If the stock is registered
in the names of two or more persons, each should sign. Executors,
administrators, trustees, guardians and attorneys-in-fact should add their
titles. If signer is a corporation, please give full corporate name and have a
duly authorized officer sign, stating title. If signer is a partnership, please
sign in partnership name by authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY. ANY VOTES RECEIVED AFTER A
MATTER HAS BEEN VOTED UPON WILL NOT BE COUNTED.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
JK Acquisition Corp (AMEX:JKA)
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