UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
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June 30, 2008
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
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to
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Commission File Number:
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001-33862
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Liberty Acquisition Holdings Corp.
(Exact name of Registrant as specified in its charter)
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Delaware
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26-0490500
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification Number)
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1114 Avenue of the Americas, 41st Floor
New York, New York 10036
(Address of principal executive offices)
(212) 380-2230
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
x
Yes
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No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of
large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of
the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2
of the Act).
x
Yes
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No
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.
The number of shares of common stock outstanding as of August 7, 2008 was 129,375,000.
TABLE OF CONTENTS
Forward-Looking Statements
This report, and the information incorporated by reference in it, include forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Our
forward-looking statements include, but are not limited to, statements regarding our expectations,
hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that
refer to projections, forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words anticipates,
believe, continue, could, estimate, expect, intend, may, might, plan, possible,
potential, predict, project, should, would and similar expressions may identify
forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements in this report may include, for example, statements
about our:
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ability to complete a combination with one or more target businesses;
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success in retaining or recruiting, or changes required in, our officers or directors
following a business combination;
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potential inability to obtain additional financing to complete a business combination;
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limited pool of prospective target businesses;
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potential change in control if we acquire one or more target businesses for stock;
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public securities limited liquidity and trading;
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inability to have our securities listed on the American Stock Exchange following a
business combination or the delisting of our securities from the American Stock Exchange;
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use of proceeds not in trust or available to us from interest income on the trust
account balance; or
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financial performance.
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The forward-looking statements contained or incorporated by reference in this report are based
on our current expectations and beliefs concerning future developments and their potential effects
on us and speak only as of the date of such statement. There can be no assurance that future
developments affecting us will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control) or other
assumptions that may cause actual results or performance to be materially different from those
expressed or implied by these forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described in Part II Other Information, Item 1A. Risk
Factors and elsewhere in this report and in our annual report on
Form 10-K
for the Year ended
December 31. 2007, and those described in our future reports filed with the Securities Exchange
Commission. Should one or more of these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, actual results may vary in material respects from those projected in
these forward-looking statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
References in this report to we, us or our company refer to Liberty Acquisition Holdings
Corp. References to our founders refer, collectively, to our sponsors and each of our
independent directors. References to public stockholders refer to purchasers of our securities
in our initial public offering and subsequent purchasers in the secondary market. To the extent
our founders purchased common stock in our initial public offering or thereafter in the open market
they would be public stockholders for liquidation and dissolution purposes, but will vote all
such shares in favor of our initial business combination and therefore would not be eligible to
seek redemption in connection with a vote on a business combination.
2
PART I FINANCIAL INFORMATION
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ITEM 1.
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Financial Statements.
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LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
CONDENSED BALANCE SHEETS
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June 30, 2008
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December 31, 2007
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(unaudited)
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ASSETS
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Current assets
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Cash
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$
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4,606,847
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$
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287,656
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Prepaid expenses
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92,473
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199,973
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Prepaid income taxes
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2,578,020
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Total current assets
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7,277,340
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487,629
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Other asset,
cash and cash equivalents
held in trust account
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1,018,682,688
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1,019,590,779
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Total Assets
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$
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1,025,960,028
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$
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1,020,078,408
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LIABILITIES AND STOCKHOLDERS EQUITY
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Current liabilities
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Accrued expenses
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$
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30,000
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$
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6,379
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Accrued offering costs
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250,000
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Income taxes payable
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1,282,632
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Franchise taxes payable
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48,505
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84,986
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Notes payable, founding stockholders
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250,000
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Total current liabilities
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78,505
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1,873,997
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Long-term liabilities
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Deferred underwriters fee
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27,427,500
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27,427,500
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Common stock subject to redemption,
31,049,999 shares at redemption value,
approximately
$9.82 per share
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304,910,990
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304,910,990
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Deferred interest income related to common
stock subject to possible redemption
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482,772
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482,772
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Commitments
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Stockholders equity
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Preferred stock, $.0001 par value; 1,000,000
shares authorized; none issued.
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Common stock, $.0001 par value, authorized
215,062,500 shares; 129,375,000
shares issued and outstanding (including 31,049,999 shares
subject to possible redemption)
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12,938
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12,938
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Additional paid-in capital
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686,812,963
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686,812,963
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Retained earnings (deficit) accumulated
during the development stage
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6,234,360
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(1,442,752
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)
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Total stockholders equity
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693,060,261
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685,383,149
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Total liabilities and stockholders equity
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$
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1,025,960,028
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$
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1,020,078,408
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See accompanying notes to condensed interim financial statements.
3
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
CONDENSED STATEMENTS OF OPERATIONS
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Period from
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For the Three
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For the Six
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June 27, 2007
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Months Ended
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Months Ended
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(Inception) to
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June 30, 2008
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June 30, 2008
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June 30, 2008
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(unaudited)
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(unaudited)
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(unaudited)
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Revenue
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$
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$
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$
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Formation and operating costs
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209,977
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435,434
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544,659
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Warrant modification charge
(stock compensation expense)
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2,460,000
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Loss from operations
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(209,977
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(435,434
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(3,004,659
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Interest income
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4,940,070
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15,088,415
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17,980,292
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Income before provision for
income taxes
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4,730,093
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14,652,981
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14,975,633
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Provision for income taxes
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2,205,580
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6,975,869
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8,258,501
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Net income
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$
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2,524,513
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$
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7,677,112
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$
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6,717,132
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Maximum number of shares
subject to possible
redemption
:
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Approximate weighted average
number of shares, basic and
diluted
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31,050,000
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31,050,000
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16,867,703
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Income per share to common
stock subject to possible
redemption, basic and
diluted
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$
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$
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$
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0.03
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Net income allocable to
common stockholders not
subject to possible
redemption
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$
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2,524,513
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$
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7,677,112
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$
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6,234,360
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Approximate weighted average
number of common shares
outstanding (not subject to
possible redemption), basic
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98,325,000
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98,325,000
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65,232,973
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Net income per common share
not subject to possible
redemption, basic
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$
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0.03
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$
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.08
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$
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0.10
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Approximate weighted average
number of common shares
outstanding (not subject to
possible redemption),
diluted
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123,156,245
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125,151,558
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95,224,465
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Net income per common share
not subject to possible
redemption, diluted
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$
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0.02
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$
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0.06
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$
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0.07
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See accompanying notes to condensed interim financial statements.
4
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
CONDENSED STATEMENTS OF CASH FLOWS
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Period from
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Six Months
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June 27, 2007
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Ended June 30,
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(inception) to
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2008
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June 30, 2008
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(unaudited)
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(unaudited)
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Cash flows from operating activities
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Net income
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$
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7,677,112
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$
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6,717,132
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Adjustment to reconcile net income to net cash
provided by operating activities:
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Warrant modification charge (stock
compensation expense)
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2,460,000
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Increase (decrease) in cash attributable to
changes in operating assets and liabilities:
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Prepaid expenses
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107,500
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(92,473
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Prepaid income taxes
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(2,578,020
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)
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(2,578,020
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)
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Income taxes payable
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(1,282,632
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Franchise taxes payable
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(36,481
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)
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48,505
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Accrued expenses
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23,621
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30,000
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Net cash provided by operating activities
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3,911,100
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6,585,144
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Net cash provided by (used in) investing activities
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Funds invested in trust account
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908,091
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(1,018,682,688
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Cash flows from financing activities
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Repayment of notes payable, founding stockholders
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(250,000
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(250,000
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Proceeds from note payable, founding stockholders
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250,000
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Proceeds from issuance of units to founding
stockholders
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25,000
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Gross proceeds from public offering
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1,035,000,000
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Proceeds from issuance of warrants in private
placements
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12,000,000
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Payments for underwriters discounts and offering
costs
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(250,000
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(30,320,609
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Net cash provided by (used in) financing activities
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(500,000
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1,016,704,391
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Net increase in cash
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4,319,191
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4,606,847
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Cash
at beginning of the period
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287,656
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Cash
at end of the period
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$
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4,606,847
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$
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4,606,847
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Supplemental schedule of non-cash financing
activities:
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Deferred underwriters discount
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$
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$
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27,427,500
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Accrued offering costs
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$
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$
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250,000
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Supplemental disclosures of cash
flow information:
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Cash paid during the period for income taxes
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$
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10,836,521
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$
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10,836,521
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See accompanying notes to condensed interim financial statements.
5
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
NOTE ADESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Liberty Acquisition Holdings Corp. (a corporation in the development stage) (the
Company) was incorporated in Delaware on June 27, 2007. The Company plans to acquire one or more
operating businesses through a merger, stock exchange, asset acquisition, reorganization or similar
business combination (a Business Combination). The Company has neither engaged in any operations
nor generated revenue from operations to date. The Company is considered to be in the development
stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7,
Accounting and
Reporting By Development Stage Enterprises
, and is subject to the risks associated with activities
of development stage companies. Following the initial public offering (described below), the
Company will not generate any operating revenues until after the completion of its initial business
combination, at the earliest. The Company will generate non-operating income in the form of
interest income on the designated Trust Account from proceeds derived from the offering. For the
six months ended June 30, 2008, the Company earned approximately $15.1 million of interest income
on funds held in the Trust Account, of which approximately $5.0 million was transferred to the
operating account. The Company has selected December 31st as its fiscal year end.
The accompanying unaudited condensed interim financial statements have been prepared in
accordance with accounting principles generally accepted in the United States (U.S. GAAP) for
interim financial statements and pursuant to the instructions on Form 10-Q under the Securities
Exchange Act of 1934, as amended, and Article 10 of Regulation S-X promulgated by the Securities
and Exchange of Commission (SEC) and reflect all adjustments, consisting only of normal recurring
adjustments, which are, in the opinion of management, necessary for a fair presentation of the
financial position as of June 30, 2008 and the results of operations for the three and six months
ended June 30, 2008 and the period from June 27, 2007 (date of inception) to June 30, 2008, in
accordance with U.S. GAAP for interim financial statements and pursuant to the instructions to Form
10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally
included in the Companys annual audited financial statements have been condensed or omitted
pursuant to such rules and regulations. The condensed balance sheet as of December 31, 2007, as
presented herein, was derived from the Companys audited financial statements as reported on Form
10-K to the Companys Annual Report for the year ended December 31, 2007 filed with the SEC but
does not include all disclosures required by U.S. GAAP.
The results of operations for the three and six months ended June 30, 2008 and the period from
June 27, 2007 (date of inception) to June 30, 2008 are not necessarily indicative of the results of
operations to be expected for a full fiscal year. These unaudited condensed interim financial
statements should be read in conjunction with the financial statements for the period from June 27,
2007 (date of inception) to December 31, 2007, which are included in the Companys Annual Report on
Form 10-K filed with the SEC.
The registration statement for the Companys initial public offering (the Offering) (as
described in Note C) was declared effective on December 6, 2007. The Company consummated the
Offering on December 12, 2007, and contemporaneous with the consummation of the Offering, the
Companys Sponsors (as defined below) purchased 12,000,000 warrants in the aggregate at $1.00 per
warrant in a private placement (the Private Placement) (See Note D). Substantially all of the
net proceeds of the Offering are intended to be generally applied toward consummating a Business
Combination. Furthermore, there is no assurance that the Company will be able to successfully
effect a Business Combination. Since the Offering, approximately 98% of the gross proceeds, after
payment of certain amounts to the underwriters, is held in a trust account (Trust Account) and
invested in either one or more money market funds which invest principally in short-term securities
issued or guaranteed by the United States having a rating in the highest
6
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
investment category granted thereby by a recognized credit rating agency at the time of
acquisition or short-term tax exempt municipal bonds issued by governmental entities located within
the United States and otherwise meeting the condition under Rule 2a-7 promulgated under the
Investment Company Act of 1940, until the earlier of (i) the consummation of its first Business
Combination or (ii) the distribution of the Trust Account as described below. The remaining
proceeds may be used to pay for business, legal and accounting due diligence on a prospective
Business Combination and continuing general and administrative expenses.
The Company, after signing a definitive agreement for the Business Combination, will submit
such transaction for stockholder approval. In the event that 30% or more of the outstanding stock
(excluding, for this purpose, those shares of the Companys common stock, $0.0001 par value
(Common Stock) issued prior to the Offering) vote against the Business Combination and exercise
their redemption rights described below, the Business Combination will not be consummated.
Stockholders that purchased the Common Stock in the Offering voting against a Business Combination
will be entitled to cause the Company to redeem their stock for a pro rata share of the Trust
Account (including the additional 2.65% fee of the gross proceeds payable to the underwriters upon
the Companys consummation of a Business Combination), including any interest earned (net of taxes
payable and the amount distributed to the Company to fund its working capital requirements) on
their pro rata share, if the Business Combination is approved and consummated. However, voting
against the Business Combination alone will not result in an election to exercise a stockholders
redemption rights. A stockholder must also affirmatively exercise such redemption rights at or
prior to the time the Business Combination is voted upon by the stockholders. All of the Companys
stockholders prior to the Offering (collectively, the Founders) have agreed to vote all of the
shares of the Common Stock held by them in accordance with the vote of the majority in interest of
all other stockholders of the Company.
In the event that the Company does not consummate a Business Combination by June 12, 2010, or
December 12, 2010 if certain extension criteria have been satisfied, the proceeds held in the Trust
Account will be distributed to the Companys public stockholders, excluding the Founders to the
extent of their initial stock holdings. In the event of such distribution, it is likely that the
per share value of the residual assets remaining available for distribution (including Trust
Account assets) will be less than the initial public offering price per Unit in the Offering
(assuming no value is attributed to the Warrants contained in the Units to be offered in the
Offering discussed in Note C).
NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation:
The accompanying unaudited condensed interim financial statements are presented in U.S.
dollars and have been prepared in accordance with U.S. GAAP and pursuant to the rules and
regulations for interim financial statements of the SEC.
Development Stage Company:
The Company complies with the reporting requirements of SFAS No. 7,
Accounting and Reporting
by Development Stage Enterprises
.
Cash and cash equivalents:
Cash and cash equivalents are defined as cash and investments that have a maturity at date of
purchase of three months or less.
7
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
Units:
On December 6, 2007, the Company effected a 1-for-5 unit dividend (Unit Dividend). All
transactions and disclosures in the condensed interim financial statements, related to the
Companys Units, have been adjusted to reflect the effect of the Unit Dividend.
Net income per common share:
The Company complies with SFAS No. 128,
Earnings Per Share
, which requires dual presentation
of basic and diluted earnings per share on the face of the statements of operations. Basic net
income per share is computed by dividing net income by the weighted average common shares
outstanding for the period. Diluted net income per share reflects the potential dilution that could
occur if warrants were to be exercised or converted or otherwise resulted in the issuance of Common
Stock that then shared in the earnings of the entity.
For the three and six months ended June 30, 2008 and for the period from June 27, 2007
(inception) to June 30, 2008, the Company had potentially dilutive securities in the form of
76,687,500 warrants, including 12,937,500 warrants issued as part of the Founders Units (as
defined below), 12,000,000 Sponsors Warrants (as defined below) issued in the Private Placement
and 51,750,000 warrants issued as part of the Units (as defined below) in the Offering. Of the
total warrants outstanding for the periods then ended, approximately 24,831,345, 26,826,558 and
29,991,492 represent incremental shares of common stock, based on their assumed redemption, to be
included in the weighted average number of shares of common stock outstanding (not subject to
possible redemption) for the calculation of diluted income per share of common stock. The Company
uses the treasury stock method to calculate potential dilutive shares, as if they were redeemed
for common stock at the beginning of the period.
The Companys statements of operations includes a presentation of earnings per share for
common stock subject to possible redemption in a manner similar to the two-class method of earnings
per share. Basic and diluted net income per share amount for the maximum number of shares subject
to possible conversion is calculated by dividing the net interest attributable to common shares
subject to redemption by the weighted average number of shares subject to possible redemption.
Basic and diluted net income per share amount for the shares outstanding not subject to possible
redemption is calculated by dividing the net income exclusive of the net interest income
attributable to common shares subject to redemption by the weighted average number of shares not
subject to possible redemption.
Concentration of credit risk:
Financial instruments that potentially subject the Company to concentrations of credit risk
consist of a cash account in a financial institution, which at times, exceeds the Federal
depository insurance coverage of $100,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on this account.
Fair value of financial instruments:
The fair value of the Companys assets and liabilities, which qualify as financial instruments
under SFAS No. 107,
Disclosure About Fair Value of Financial Instruments
, approximates the
carrying amounts represented in the balance sheets.
8
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
Use of estimates:
The preparation of condensed interim financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Income taxes:
The Company complies with SFAS 109,
Accounting for Income Taxes
, which requires an asset and
liability approach to financial accounting and reporting for income taxes. Deferred income tax
assets and liabilities are computed for differences between the financial statement and tax bases
of assets and liabilities that will result in future taxable or deductible amounts, based on
enacted tax laws and rates applicable to the periods in which the differences are expected to
affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized.
The Company also complies with the provisions of the Financial Accounting Standards
Interpretation No. 48,
Accounting for Uncertainty in Income Taxes
(FIN 48). FIN 48 prescribes a
recognition threshold and measurement process for recording in the financial statements uncertain
tax positions taken or expected to be taken in a tax return. FIN 48 also provides guidance on
de-recognition, classification, interest and penalties, accounting in interim periods, disclosures
and transitions. The Company adopted FIN 48 and has determined that the adoption did not have an
impact on the Companys financial position, results of operations, or cash flows.
Stock-based compensation:
The Company accounts for stock options and warrants using the fair value recognition
provisions of SFAS No. 123 (Revised 2004),
Share-Based Payment
(SFAS 123(R)). SFAS 123(R)
addresses all forms of share based compensation awards including shares issued under employment
stock purchase plans, stock options, restricted stock and stock appreciation rights. Under SFAS 123
(R), share based payment awards will be measured at fair value on the awards grant date, based on
estimated number of awards that are expected to vest and will be reflected as a noncash expense in
the financial statements. See Note D.
Redeemable common stock:
The Company accounts for redeemable common stock in accordance with the Financial Accounting
Standards Boards (FASB) Emerging Issue Task Force D-98
Classification and Measurement of
Redeemable Securities
(EITF D-98) which provides that securities that are redeemable for cash or
other assets are classified outside of permanent equity if they are redeemable at the option of the
holder. In addition, if the redemption causes a liquidation event, the redeemable securities should
not be classified outside of permanent equity. As discussed in Note A, the Business Combination
will only be consummated if a majority of the shares of common stock voted by the Public
Stockholders are voted in favor of the Business Combination and Public Stockholders holding less
than 30% (31,050,000) of common stock sold in the Offering exercise their redemption rights. As
further discussed in Note A, if a Business Combination is not consummated by June 12, 2010, or
December 12, 2010 if certain extension criteria have been satisfied, the Company will liquidate.
Accordingly, 31,049,999 shares of common stock have been classified outside of permanent equity at
redemption value. The Company recognizes changes in the redemption value immediately as they occur
and adjusts the carrying value of the redeemable common stock to equal its
redemption value at the end of each reporting period. The initial per share redemption price
was $9.82 at December 12, 2007.
9
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
Recently issued accounting pronouncements:
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised
2007),
Business Combinations
(SFAS 141(R)). SFAS 141(R) establishes principles and
requirements for how the acquirer in a business combination recognizes and measures in its
financial statements the fair value of identifiable assets acquired, the liabilities assumed and
any non-controlling interest in the acquiree at the acquisition date. SFAS 141(R) determines what
information to disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS No. 141(R) is effective for fiscal years
beginning after December 15, 2008.
In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated
Financial Statements An Amendment of ARB No. 51
(SFAS 160). SFAS 160 requires reporting
entities to present noncontrolling (minority) interests as equity as opposed to as a liability or
mezzanine equity and provides guidance on the accounting for transactions between an entity and
noncontrolling interests. SFAS 160 is effective the first fiscal year beginning after December 15,
2008, and interim periods within that fiscal year. SFAS 160 applies prospectively as of the
beginning of the fiscal year SFAS 160 is initially applied, except for the presentation and
disclosure requirements which are applied retrospectively for all periods presented subsequent to
adoption. The adoption of SFAS 160 will not have a material impact on the Companys results of
operations or financial position; however, it could impact future transactions entered into by the
Company.
In December 2007, the SEC issued SAB No. 110,
Share-Based Payment
(SAB 110). SAB 110
establishes the continued use of the simplified method for estimating the expected term of equity
based compensation. The simplified method was intended to be eliminated for any equity based
compensation arrangements granted after December 31, 2007. SAB 110 is being published to help
companies that may not have adequate exercise history to estimate expected terms for future grants.
The adoption of SAB 110 has not had a material effect on the Companys consolidated financial
statements.
In March 2008, the FASB issued SFAS No. 161,
Disclosures about Derivative Instruments and
Hedging Activities An Amendment to FASB Statement No. 133
. SFAS No. 161 is intended to improve
financial standards for derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an entitys financial
position, financial performance, and cash flows. Entities are required to provide enhanced
disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative
instruments and related hedged items are accounted for under Statement 133 and its related
interpretations; and (c) how derivative instruments and related hedged items affect an entitys
financial position, financial performance, and cash flows. It is effective for financial statements
issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The
adoption of this statement is not expected to have a material effect on the Companys financial
statements.
In May 2008, the FASB issued SFAS No. 162
, The Hierarchy of Generally Accepted Accounting
Principles (SFAS 162)
. SFAS 162 identifies the sources of accounting principles and the
framework for selecting the principles to be used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally accepted accounting
principles in the United States. It is effective 60 days following the SECs approval of the Public
Company Accounting Oversight Board amendments to Auditing Interpretation Section 411,
The Meaning
of Present Fairly in Conformity With Generally Accepted
Accounting Principles
. The adoption of this statement is not expected to have a material
effect on the Companys financial statements.
10
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
In May 2008, the FASB issued SFAS No. 163 (SFAS 163)
, Accounting for Financial Guarantee
Insurance Contracts An interpretation of FASB Statement No. 60.
SFAS 163 requires that an
insurance enterprise recognize a claim liability prior to an event of default when there is
evidence that credit deterioration has occurred in an insured financial obligation. It also
clarifies how Statement 60 applies to financial guarantee insurance contracts, including the
recognition and measurement to be used to account for premium revenue and claim liabilities, and
requires expanded disclosures about financial guarantee insurance contracts. It is effective for
financial statements issued for fiscal years beginning after December 15, 2008, except for some
disclosures about the insurance enterprises risk-management activities. SFAS 163 requires that
disclosures about the risk-management activities of the insurance enterprise be effective for the
first period beginning after issuance. Except for those disclosures, earlier application is not
permitted. The adoption of this statement is not expected to have a material effect on the
companys financial statements.
Management does not believe that any other recently issued, but not yet effective, accounting
pronouncements, if currently adopted, would have a material effect on the Companys condensed
interim financial statements.
Recently adopted accounting standards:
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157,
Fair
Value Measurements
(SFAS 157). SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS 157 applies to
other accounting pronouncements where the FASB requires or permits fair value measurements but does
not require any new fair value measurements. In February 2008, FASB issued FASB Staff Position No.
157-2,
Effective Date of FASB Statement No. 157
(FSP No. 157-2), which delayed the effective
date of SFAS 157 for certain non-financial assets and non-financial liabilities to fiscal years
beginning after November 15, 2008, and interim periods within those fiscal years. The Company
adopted SFAS 157 for financial assets and liabilities on January 1, 2008. SFAS 157 did not have
any impact on the Companys results of operations or financial position. See Note H.
In February 2007, the FASB issued SFAS No. 159,
The Fair Value Option for Financial Assets
and Financial Liabilities- Including an amendment of FASB Statement No. 155
(SFAS 159). This
statement permits entities to choose to measure selected assets and liabilities at fair value. The
Company adopted SFAS 159 on January 1, 2008 resulting in no impact to the Companys financial
condition, results of operations or cash flows.
NOTE CTHE OFFERING
On December 12, 2007, the Company consummated its initial public offering of 103,500,000 units
(Units) (including 13,500,000 Units sold pursuant to the underwriters exercise of their
over-allotment option) at a price of $10.00 per Unit in the Offering. Each Unit consists of one
share of the Companys Common Stock and one half (1/2) of one redeemable Common Stock purchase
warrant (Warrant). Because each unit includes one half (1/2) of one warrant, holders will need to
have two units in order to have one warrant. Warrants may be exercised only in increments of one
whole warrant. The public offering price was $10.00 per Unit. Each Warrant entitles the holder to
purchase from the Company one share of Common Stock at an exercise price of $5.50 commencing on the
later of (i) the consummation of the Companys initial
11
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
Business Combination or (ii) December 6, 2008, provided in each case that there is an
effective registration statement covering the shares of Common Stock underlying the Warrants in
effect. The Warrants will expire December 12, 2013, unless earlier redeemed. The Warrants will be
redeemable at a price of $0.01 per Warrant upon 30 days prior notice after the Warrants become
exercisable, only in the event that the last sale price of the Common Stock is at least $15.00 per
share for any 20 trading days within a 30 trading day period ending on the third business day prior
to the date on which notice of redemption is given.
No warrants will be exercisable and the Company will not be obligated to issue shares of
Common Stock unless at the time a holder seeks to exercise such warrant, a prospectus relating to
the 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, the Company has agreed to
use its best efforts to meet these conditions and to maintain a current prospectus relating to the
common stock issuable upon exercise of the warrants until the expiration of the warrants. However,
if the Company does not maintain a current prospectus relating to the common stock issuable upon
exercise of the warrants, holders will be unable to exercise their warrants. In no circumstance
will the Company be required to settle any such warrant exercise for cash. 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 or exempt from qualification in the jurisdiction in which the holders
of the warrants reside, the warrants may have no value, the market for the warrants may be limited
and the warrants will expire worthless.
Proceeds held in the trust account will not be available for the Companys use for any
purpose, except to pay any income taxes and up to $10.35 million can be taken from the interest
earned on the Trust Account to fund the Companys working capital. These proceeds will be used to
pay for business, legal, and accounting due diligence on prospective acquisitions and continuing
general and administrative expenses.
NOTE DRELATED PARTY TRANSACTIONS
The Founders purchased an aggregate of 25,875,000 (after giving effect to the Unit Dividend)
of the Companys founders units (the Founders Units) for an aggregate price of $25,000 in a
private placement. The Founders Units are identical to those sold in the Offering, except that
each of the Founders has agreed to vote the Common Stock included in the Founders Units in the
same manner as a majority of the public stockholders who vote at the special or annual meeting
called for the purpose of approving the initial Business Combination. As a result, the Founders
will not be able to exercise redemption rights with respect to the Founders Common Stock if the
initial Business Combination is approved by a majority of the Companys public stockholders. The
Founders Common Stock included in the Founders Units will not participate with the Common Stock
included in the Units sold in the Offering in any liquidating distribution. The Warrants included
in the Founders Units will become exercisable after the consummation of a Business Combination, if
and when the last sales price of the Common Stock exceeds $15.00 per share for any 20 trading days
within a 30 trading day period beginning 90 days after such Business Combination, will be
non-redeemable so long as they are held by the Founders or their permitted transferees and may be
exercised by the holder on a cashless basis. In no circumstance will the Company be required to
settle any such warrant exercise for cash. 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 or exempt
from qualification in the jurisdiction in which the holders of the warrants reside, the warrants
may have no value, the market for the warrants may be limited and the warrants will expire
worthless.
12
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
Prior to, and in connection with the pricing of, the Offering, the Companys Board of
Directors approved an amendment to modify the terms of (i) the warrants granted to the Founders as
part of the Founders Units and (ii) the Sponsors Warrants that were to be purchased by the
Sponsors immediately prior to the consummation of the Offering, whereby the exercise price of the
warrants was reduced from $7.00 to $5.50 and the exercise term extended from five to six years. The
impact of the amendment to these warrants issued in connection with the Founders Units resulted in
a warrant modification under SFAS 123(R), whereby the Company was required to record a charge for
the change in fair value measured immediately prior and subsequent to the modification of the
warrants. As a result of the modifications, the Company recorded a noncash expense of approximately
$2.5 million in the period from June 27, 2007 (date of inception) to December 31, 2007.
The Company presently occupies office space provided by Berggruen Holdings, Inc., an affiliate
of Berggruen Holdings and the Companys Chief Executive Officer. Upon the consummation of the
Offering, the Company agreed to pay Berggruen Holdings, Inc. a total of $10,000 per month for
office space, administrative services and secretarial support until the earlier of the Companys
consummation of a Business Combination or its liquidation. Upon consummation of a Business
Combination or its liquidation, the Company will cease paying these monthly fees.
Each of Berggruen Holdings and Marlin Equities have invested $6.0 million in the Company
($12.0 million in the aggregate) in the form of sponsors warrants (Sponsors Warrants) to
purchase 6,000,000 shares of Common Stock (12,000,000 in the aggregate) at a price of $1.00 per
Sponsors Warrant. Each of Berggruen Holdings and Marlin Equities purchased such Sponsors Warrants
from the Company immediately prior to the consummation of the Offering. Each of Berggruen Holdings
and Marlin Equities has agreed not to transfer, assign or sell any of the Sponsors Warrants
(including the Common Stock to be issued upon exercise of the Sponsors Warrants) until one year
after the Company consummates a Business Combination. In no circumstance will the Company be
required to settle any such warrant exercise for cash. 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 or exempt from qualification in the jurisdiction in which the holders of the warrants
reside, the warrants may have no value, the market for the warrants may be limited and the warrants
will expire worthless. There was no charge associated with the issuance of these warrants in the
Private Placement, in accordance with SFAS 123(R), as the Company has determined that the purchase
price of these warrants were above the fair value of such warrants.
Each of Berggruen Holdings and Marlin Equities agreed to invest $30.0 million in the Company
($60.0 million in the aggregate) in the form of co-investment units (Co-Investment Units) at a
price of $10.00 per Unit. Each of Berggruen Holdings and Marlin Equities is obligated to purchase
such Co-Investment Units from the Company immediately prior to the consummation of a Business
Combination.
The Co-Investment Units will be identical to the Units sold in the Offering. Each of Berggruen
Holdings and Marlin Equities has agreed not to transfer, assign or sell any of the Co-Investment
Units or the Common Stock or Warrants included in the Co-Investment Units (including the Common
Stock to be issued upon exercise of the Warrants), until one year after the Company consummates a
Business Combination.
The Company issued two $125,000 unsecured promissory notes, one each, to Berggruen Acquisition
Holdings Ltd (Berggruen Holdings) and Marlin Equities II, LLC (Marlin Equities). These advances
are non-interest bearing, unsecured and are due within 60 days following the consummation of the
Proposed Offering. Both promissory notes were repaid in the first quarter of 2008.
13
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
Notes to CONDENSED INTERIM Financial Statements
(unaudited)
NOTE EINCOME TAXES
The Companys provision for income taxes reflects the application of federal, state and city
statutory rates to the Companys income before taxes. The Companys effective tax rate was 47% for
the three months ended June 30, 2008, 48% for the six months ended June 30, 2008 and 55% for the
period from June 27, 2007 (inception) to June 30, 2008.
Components of the provision for income taxes are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from June 27, 2007
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
(inception) to
|
Current
|
|
June 30, 2008
|
|
June 30, 2008
|
|
June 30, 2008
|
Federal
|
|
$
|
1,453,938
|
|
|
$
|
4,376,346
|
|
|
$
|
5,205,351
|
|
State
|
|
$
|
267,200
|
|
|
$
|
1,216,282
|
|
|
$
|
1,413,978
|
|
City
|
|
$
|
484,442
|
|
|
$
|
1,383,241
|
|
|
$
|
1,639,172
|
|
For the three and six months ended June 30, 2008, the effective income tax rate differs from
the federal statutory rate of 34% principally due to the effect of state and city income taxes
(permanent difference) and for the period from June 27, 2007 (inception) to June 30, 2008, the
non-deductibility of the warrant modification charge also contributes to the difference.
NOTE FCOMMITMENTS
The Company paid an underwriting discount of 2.85% of the Offering proceeds ($29.5 million) to
the underwriters at the closing of the Offering. The Company will pay the underwriters an
additional fee of 2.65% of the Offering proceeds ($27.4 million) payable upon the consummation of a
Business Combination.
NOTE GPREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of preferred stock with such designations,
voting and other rights and preferences as may be determined from time to time by the Board of
Directors. As of June 30, 2008, the Company has not issued any shares of preferred stock.
NOTE HFAIR VALUE MEASUREMENTS
Effective January 1, 2008, the Company implemented SFAS 157 for its financial assets and
liabilities that are re-measured and reported at fair value at each reporting period, and
non-financial assets and liabilities that are re-measured and reported at fair value at least
annually. In accordance with the provision of FASB Staff Positions No. 157-2, the Company has
elected to defer implementation of SFAS 157 as it relates to its non-financial assets and
non-financial liabilities that are recognized and disclosed at fair value in the financial
statements on a nonrecurring basis until January 1, 2009. The Company is evaluating the impact, if
any, this standard will have on its non-financial assets and liabilities.
The adoption of SFAS 157 to the Companys financial assets and liabilities and non-financial
assets and liabilities that are re-measured and reported at fair value at least annually did not
have an impact on the Companys financial results.
14
LIBERTY ACQUISITION HOLDINGS CORP.
(a corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
The following table presents information about the Companys assets and liabilities that are
measured at fair value on a recurring basis as of June 30, 2008, and indicates the fair value
hierarchy of the valuation techniques the Company utilized to determine such fair value. In
general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active
markets for identical assets or liabilities. Fair value determined by Level 2 inputs utilize data
points that are observable such as quoted prices, interest rates and yield curves. Fair values
determined by Level 3 inputs are unobservable data points for the asset or liability, and includes
situations where there is little, if any, market activity for the asset or liability.
Financial Assets at Fair Value as of June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in
|
|
Significant Other
|
|
Significant
|
|
|
Active Markets
|
|
Observable Inputs
|
|
Unobservable Inputs
|
Description
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents held in
trust
|
|
$
|
1,018,682,688
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,018,682,688
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair values of the Companys cash and cash equivalents held in the Trust Account are
determined through market, observable and corroborated sources.
The carrying amounts reflected in the condensed balance sheets for other current assets and
accrued expenses approximate fair value due to their short-term maturities.
|
|
|
ITEM. 2.
|
|
Managements Discussion and Analysis of Financial Condition and Results of Operations.
|
Overview
We were formed on June 27, 2007. We plan to effect a merger, stock exchange, asset
acquisition, reorganization or similar business combination with an operating business or
businesses which we believe have significant growth potential. We consummated our initial public
offering on December 12, 2007. We are currently in the process of evaluating and identifying
targets for a business combination. We intend to use cash from the proceeds of our initial public
offering (including proceeds from the exercise by the underwriters of their over-allotment option)
and sale of the sponsors warrants and the co-investment, our capital stock, debt or a combination
of cash, stock and debt.
We have neither engaged in any operations nor generated any revenues
from operations to date. Our entire activity since inception has been to prepare for and
consummate our initial public offering and to identify and investigate targets for a business
combination. We will not generate any operating revenues until consummation of a business
combination. We generate non-operating income in the form of interest income on cash and cash
equivalents.
Net income for the three months ended June 30, 2008 was approximately $2.5 million, which
consisted of approximately $4.9 million in interest income offset by approximately $0.2 million in
formation and operating expenses and approximately $2.2 million for income taxes. Net income for
the six months ended June 30, 2008 was approximately $7.7 million, which consisted of approximately
$15.1 million in interest income offset by approximately $0.4 million in formation and operating
expenses and approximately
15
$7.0 million for income taxes. Net income for the period from June 27, 2007 (inception) to
June 30, 2008 was approximately $6.7 million, which consisted of approximately $18.0 million in
interest income partially offset by approximately $0.5 million in formation and operating expenses,
approximately $2.5 million in noncash expenses in connection with the modification of the terms of
the founders and sponsors warrants and approximately $8.3 million in income taxes. Please see Note
B to the Companys financial statements Summary of Significant Accounting Policies Stock
Based Compensation and Note D Related Party Transactions. The trustee of the trust account
will pay any taxes resulting from interest accrued on the funds held in the trust account out of
the funds held in the trust account.
Off-Balance Sheet Arrangements
We have never entered into any off-balance sheet financing arrangements and have never
established any special purpose entities. We have not guaranteed any debt or commitments of other
entities or entered into any options on non-financial assets.
Contractual Obligations
We do not have any long term debt, capital lease obligations, operating lease obligations,
purchase obligations or other long term liabilities.
Liquidity and Capital Resources
The net proceeds from (i) the sale of the units in our initial public offering (including the
underwriters over-allotment option), after deducting approximately $57.7 million to be applied to
underwriting discounts, offering expenses and working capital (including approximately $27.4
million of deferred underwriting discounts) and (ii) the sale of the sponsors warrants for a
purchase price of $12.0 million, was approximately $1,016.7 million. All of these net proceeds
were placed in trust, except for $0.1 million that was used for working capital.
We will use substantially all of the net proceeds of our initial public offering to acquire
one or more target businesses, including identifying and evaluating prospective target businesses,
selecting one or more target businesses, and structuring, negotiating and consummating the business
combination. If the business combination is paid for using stock or debt securities, we may apply
the cash released to us from the trust account for general corporate purposes, including for
maintenance or expansion of operations of the acquired business or businesses, the payment of
principal or interest due on indebtedness incurred in consummating our initial business
combination, to fund the purchase of other companies, or for working capital.
As of June 30, 2008, we had cash outside of the trust account of approximately $4.6 million,
cash held in the trust account of approximately $1,018.7 million, franchise taxes payable of
$48,505, and total liabilities of approximately $332.8 million (which includes approximately $305.0
million of common stock which is subject to possible redemption and related deferred interest). We
believe that the funds available to us outside of the trust account will be sufficient to allow us
to operate until December 12, 2010, assuming that an initial transaction is not consummated during
that time. Of the funds held outside of the trust account, we anticipate using these funds to
cover the due diligence and investigation of a target business or businesses; legal, accounting and
other expenses associated with structuring, negotiating and documenting an initial business
combination; office space, administrative services and secretarial support prior to consummating a
business combination.
16
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accrued expenses
|
|
$
|
30,000
|
|
Franchise taxes payable
|
|
|
48,505
|
|
|
|
|
|
|
|
$
|
78,505
|
|
If the funds available to us outside of the trust account are insufficient to cover our
expenses, we may be required to raise additional capital, the amount, availability and cost of
which is currently unascertainable. In this event, we could seek such additional capital through
loans or additional investments from our sponsors, Mr. Berggruen or our directors, but, except for
the co-investment, none of such sponsors, Mr. Berggruen or our directors is under any obligation to
advance funds to, or invest in, us. Any such interest income not used to fund our working capital
requirements or repay advances from our founders or for due diligence or legal, accounting and
non-due diligence expenses will be usable by us to pay other expenses that may exceed our current
estimates.
We do not believe we will need to raise additional funds in order to meet the expenditures
required for operating our business. However, we may need to raise additional funds, in addition
to the co-investment, through a private offering of debt or equity securities if such funds were
required to consummate a business combination. Such debt securities may include a working capital
revolving debt facility or a longer term debt facility. We would only consummate such financing
simultaneously with the consummation of a business combination.
We intend to focus on potential target businesses with valuations between $1.0 billion and
$4.0 billion. We believe that our available working capital, together with the issuance of
additional equity and/or the issuance of debt, would support the acquisition of such a target
business. Such debt securities may include a long term debt facility, a high-yield notes offering
or mezzanine debt financing, and depending upon the business of the target company, inventory,
receivable or other secured asset-based financing. The mix of additional equity and/or debt would
depend on many factors. The proposed funding for any such business combination would be disclosed
in the proxy statement relating to the required shareholder approval. We would only consummate
such financing simultaneously with the consummation of a business combination that was approved in
connection with the stockholder approval of the business combination. We will only seek
stockholder approval of such financing as an item separate and apart from the approval of the
overall transaction if such separate approval was required by applicable securities laws or the
Rules of the American Stock Exchange or other similar body.
|
|
|
ITEM 3.
|
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Market risk is a broad term for the risk of economic loss due to adverse changes in the fair
value of a financial instrument. These changes may be the result of various factors, including
interest rates, foreign exchange rates, commodity prices and/or equity prices. Approximately
$1,016.7 million of the net offering proceeds (which includes $27.4 million of the proceeds
attributable to the underwriters discount) has been placed into a trust account maintained by
Continental Stock Transfer & Trust Company, acting as trustee. As of June 30, 2008, the balance of
the trust account was approximately $1,018.7 million. The proceeds held in trust are invested in
U.S. government securities defined as any Treasury Bill issued by the United States having a
maturity of 180 days or less and/or in any open ended money market(s) selected by us meeting the
conditions of Sections (c)(2), (c)(3) and (c)(4) of Rule 2a-7 under the Investment Company Act of
1970. Thus, we are subject to market risk primarily through the effect of changes in interest
rates on government securities. The effect of other changes, such as foreign exchange rates,
commodity prices and/or equity prices, does not pose significant market risk to us. As of June 30,
2008, the effective annualized interest rate payable on our investment was approximately 2.25%
(based upon the average yield earned during the last reported monthly period). Assuming no other
changes to our holdings as of June 30, 2008, a 1.0% decrease
in the yield on our investment as of June 30, 2008 would result in a decrease of approximately
$2.5 million in the interest earned on our investment for the following quarterly period. We have
not engaged in any hedging activities since our inception. We do not expect to engage in any
hedging activities with respect to the market risk to which we are exposed.
17
|
|
|
ITEM 4T.
|
|
Controls and Procedures.
|
We evaluated the effectiveness of our disclosure controls and procedures, as defined in the
Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Nicolas
Berggruen, our Chief Executive Officer, participated in this evaluation. Based upon that
evaluation, Mr. Berggruen concluded that our disclosure controls and procedures were effective as
of the end of the period covered by the report.
As a result of the evaluation completed by Mr. Berggruen, we have concluded that there were no
changes during the fiscal quarter ended June 30, 2008 in our internal controls over financial
reporting, which have materially affected, or are reasonably likely to materially affect, our
internal controls over financial reporting.
PART II OTHER INFORMATION
|
|
|
ITEM 1.
|
|
Legal Proceedings.
|
None.
There have been no material changes in our risk factors disclosed in our Annual Report on Form
10-K for the year ended December 31, 2007.
|
|
|
ITEM 2.
|
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Unregistered Sales of Equity Securities
We did not engage in any unregistered sales of equity securities during the three months ended
June 30, 2008.
Use of Proceeds from Initial Public Offering
On December 12, 2007, we closed our initial public offering of 103,500,000 units (which
included 13,500,000 purchased by the underwriters pursuant to their over-allotment option) with
each unit consisting of one share of common stock and one-half (
1
/
2
) of one warrant to purchase one
share of our common stock at a price of $5.50 per share. All of the units registered were sold at
an offering price of $10.00 per unit and generated gross proceeds of $1,035.0 million. The
securities sold in our initial public offering were registered under the Securities Act of 1933 on
a registration statement on Form S-1 (No. 333-145559). The SEC declared the registration statement
effective on December 6, 2007. Citigroup Global Market Inc. acted as sole bookrunning manager and
representative of Lehman Brothers Inc.
We received net proceeds of approximately $1,016.7 million from our initial public offering
(including proceeds from the exercise by the underwriters of their over-allotment option). Of
those net proceeds, approximately $27.4 million is attributable to the deferred underwriters
discount. Expenses related to the offering totaled approximately $57.7 million. The net proceeds
were deposited into a trust account and will be part of the funds distributed to our public
stockholders in the event we are unable to
18
complete a business combination. The remaining proceeds ($100,000) became available to be
used to provide for business, legal and accounting due diligence on prospective transactions and
continuing general and administrative expenses. Unless and until a business combination is
consummated, the proceeds held in the trust account will not be available to us, except to pay any
income taxes and up to $10.35 million can be taken from the interest earned on the trust account to
fund our working capital. These proceeds will be used in addition to the $100,000, to pay for
business, legal, and accounting due diligence on prospective acquisitions and continuing general
and administrative expenses This limitation on our working capital will preclude us from declaring
and paying dividends. The net proceeds deposited into the trust account remain on deposit in the
trust account and earned approximately $18.0 million for the period from June 27, 2007 (inception)
to June 30, 2008 and approximately $15.1 million for the six months ended June 30, 2008.
|
|
|
ITEM 3.
|
|
Defaults upon Senior Securities.
|
Not applicable.
|
|
|
ITEM 4.
|
|
Submission of Matters to a Vote of the Security Holders.
|
Not applicable.
|
|
|
ITEM 5.
|
|
Other Information.
|
Due to a ministerial error, an incorrect version of our certificate of
incorporation was filed with the Secretary of State of Delaware and the SEC. On August 7, 2008, we
filed certificates of correction and a restated certificate of incorporation with the Secretary of
State of Delaware. A copy of the restated certificate of incorporation is attached hereto as
Exhibit 3.1.
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
3.1*
|
|
Restated Certificate of Incorporation
|
|
|
|
3.2
|
|
Bylaws (1)
|
|
|
|
4.1
|
|
Specimen Unit Certificate (1)
|
|
|
|
4.2
|
|
Specimen Common Stock Certificate (1)
|
|
|
|
4.3
|
|
Warrant Agreement, dated August 9, 2007 between Continental Stock
Transfer & Trust Company and the Registrant (1)
|
|
|
|
4.4
|
|
Amended and Restated Warrant Agreement dated November 9, 2007
between Continental Stock Transfer & Trust Company and the
Registrant (3)
|
|
|
|
4.5
|
|
Second Amended and Restated Warrant Agreement dated December 6,
2007 between Continental Stock Transfer & Trust Company and the
Registrant (4)
|
|
|
|
4.6
|
|
Specimen Public Warrant Certificate (included in Exhibit 4.3)
|
|
|
|
4.7
|
|
Specimen Private Warrant Certificate (included in Exhibit 4.3)
|
|
|
|
10.1
|
|
Registration Rights Agreement among the Registrant and the
Founders, dated December 6, 2007 (5)
|
|
|
|
10.2
|
|
Founders Units Subscription Agreement dated as of August 9, 2007
by and between the Registrant and Berggruen Holdings (formerly
known as Berggruen Freedom Holdings, Ltd.) (1)
|
|
|
|
19
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
10.3
|
|
Founders Units Subscription Agreement dated as of August 9, 2007
by and between the Registrant and Marlin Equities (1)
|
|
|
|
10.4
|
|
Founders Units Subscription Agreement dated as of August 9, 2007
by and between the Registrant and James N. Hauslein (1)
|
|
|
|
10.5
|
|
Founders Units Subscription Agreement dated as of August 9, 2007
by and between the Registrant and Nathan Gantcher (1)
|
|
|
|
10.6
|
|
Founders Units Subscription Agreement dated as of August 9, 2007
by and between the Registrant and Paul B. Guenther (1)
|
|
|
|
10.7
|
|
Sponsors Warrant and Co-Investment Units Subscription Agreement
dated as of August 9, 2007 by and between the Registrant and
Berggruen Holdings (formerly known as Berggruen Freedom Holdings,
Ltd.) (1)
|
|
|
|
10.8
|
|
Sponsors Warrant and Co-Investment Units Subscription Agreement
dated as of August 9, 2007 by and between the Registrant and Marlin
Equities (1)
|
|
|
|
10.9
|
|
Amended and Restated Sponsors Warrant and Co-Investment Units
Subscription Agreement dated as of December 6, 2007 by and between
the Registrant and Berggruen Acquisition Holdings (4)
|
|
|
|
10.10
|
|
Amended and Restated Sponsors Warrant and Co-Investment Units
Subscription Agreement dated as of December 6, 2007 among the
Registrant and Marlin Equities (4)
|
|
|
|
10.11
|
|
Investment Management Trust Agreement by and between the Registrant
and Continental Stock Transfer & Trust Company, dated December 12,
2007 (4)
|
|
|
|
10.12
|
|
Letter Agreement dated as of August 9, 2007 among the Registrant,
Citigroup Global Markets Inc. and Berggruen Holdings (formerly
known as Berggruen Freedom Holdings, Ltd.) (1)
|
|
|
|
10.13
|
|
Letter Agreement dated as of August 9, 2007 among the Registrant,
Citigroup Global Markets Inc. and Marlin Equities (1)
|
|
|
|
10.14
|
|
Letter Agreement dated as of August 9, 2007 among the Registrant,
Citigroup Global Markets Inc. and Nicolas Berggruen (1)
|
|
|
|
10.15
|
|
Letter Agreement dated as of August 9, 2007 among the Registrant,
Citigroup Global Markets Inc. and Martin E. Franklin (1)
|
|
|
|
10.16
|
|
Letter Agreement dated as of August 9, 2007 among the Registrant,
Citigroup Global Markets Inc. and James N. Hauslein (1)
|
|
|
|
10.17
|
|
Letter Agreement dated as of August 9, 2007 among the Registrant,
Citigroup Global Markets Inc. and Nathan Gantcher (1)
|
|
|
|
10.18
|
|
Letter Agreement dated as of August 9, 2007 among the Registrant,
Citigroup Global Markets Inc. and Paul B. Guenther (1)
|
|
|
|
10.19
|
|
Amended and Restated Letter Agreement dated as of December 6, 2007
among the Registrant, Citigroup Global Markets Inc. and Berggruen
Holdings (5)
|
|
|
|
10.20
|
|
Amended and Restated Letter Agreement dated as of December 6, 2007
among the Registrant, Citigroup Global Markets Inc. and Marlin
Equities (5)
|
|
|
|
10.21
|
|
Amended and Restated Letter Agreement dated as of December 6, 2007
among the Registrant, Citigroup Global Markets Inc. and Nicolas
Berggruen (5)
|
|
|
|
10.22
|
|
Amended and Restated Letter Agreement dated as of December 6, 2007
among the Registrant, Citigroup Global Markets Inc. and Martin E.
Franklin (5)
|
20
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
10.23
|
|
Amended and Restated Letter Agreement dated as of December 6, 2007
among the Registrant, Citigroup Global Markets Inc. and James N.
Hauslein (5)
|
|
|
|
10.24
|
|
Amended and Restated Letter Agreement dated as of December 6, 2007
among the Registrant, Citigroup Global Markets Inc. and Nathan
Gantcher (5)
|
|
|
|
10.25
|
|
Amended a Restated Letter Agreement dated as of December 6, 2007
among the Registrant, Citigroup Global Markets Inc. and Paul B.
Guenther (5)
|
|
|
|
10.26
|
|
Promissory Note, dated August 9, 2007, issued to Berggruen Holdings
(formerly known as Berggruen Freedom Holdings, Ltd.) (1)
|
|
|
|
10.27
|
|
Promissory Note, dated August 9, 2007, issued to Marlin Equities (1)
|
|
|
|
10.28
|
|
Form of Letter Agreement among the Registrant and Berggruen
Holdings, Inc. providing office space to the Registrant (1)
|
|
|
|
10.29
|
|
Form of Berggruen Holdings Ltd Employee Letter Agreement (1)
|
|
|
|
10.30
|
|
Form of Indemnification Agreement by and between the Registrant and
each of its officers and directors, dated December 6, 2007 (5)
|
|
|
|
31.1*
|
|
Chief Executive Officer Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
|
|
|
|
32.1*
|
|
Chief Executive Officer Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
|
|
|
|
|
|
*
|
|
Filed Herewith
|
|
(1)
|
|
Incorporated by reference to the corresponding exhibit filed with the Registration Statement
on Form S-1 (File No. 333-145559) with the SEC on August 17, 2007.
|
|
(2)
|
|
Incorporated by reference to the corresponding exhibit filed with Amendment No. 1 to the
Registration Statement on Form S-1 (File No. 333-145559) filed with the SEC on October 5,
2007.
|
|
(3)
|
|
Incorporated by reference to the corresponding exhibit filed with Amendment No. 2 to the
Registration Statement on Form S-1 (File No. 333-145559) filed with the SEC on November 9,
2007.
|
|
(4)
|
|
Incorporated by reference to the corresponding exhibit filed with the Registrants Current
Report on Form 8-K filed with the SEC on December 12, 2007.
|
|
(5)
|
|
Incorporated by reference to the corresponding exhibit filed with the Registrants Annual
Report on Form 10-K filed with the SEC on March 11, 2008.
|
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
|
|
|
|
August 8, 2008
|
LIBERTY ACQUISITION HOLDINGS CORP.
|
|
|
/s/ NICOLAS BERGGRUEN
|
|
|
By: Nicolas Berggruen
|
|
|
Title:
|
President and Chief Executive Officer
(principal executive officer, principal financial
officer and principal accounting officer)
|
|
|
22
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