Special Purpose Acquisition Corporation

Slide 1: Special Purpose Acquisition Corporation “SPAC” Dickson Consulting 1

Slide 2: SPAC A blank check company taken public via an IPO Dickson Consulting 2

Slide 3: SPAC Sponsor • Forms SPAC • Completes initial public offering • Generally has specific industry experience • Understands financial markets Dickson Consulting 3

Slide 4: Purpose of SPAC To finance one or more acquisitions in target industry or geography Dickson Consulting 4

Slide 5: SPAC Timeframe for Acquisition(s) • Generally 18 months to complete an acquisition without an extension • 24 months to complete an acquisition with an extension • If no acquisition is made net IPO assets (i.e. cash) is distributed back to shareholders Dickson Consulting 5

Slide 6: SPAC IPO Proceeds • 97+% of IPO proceeds placed in third party trust • 1 to 2 % of proceeds can be used for: – Due diligence expenses – Legal and accounting expenses – Directors and officers insurance – SEC reporting Dickson Consulting 6

Slide 7: SPAC IPO • Typically listed on American Stock Exchange • NASDAQ may begin to list • “Units” are offered • After SPAC filing of an audited balance sheet reflecting IPO proceeds, units can be split into common stock and warrants that trade separately • Filing must occur within 90 days of IPO Dickson Consulting 7

Slide 8: Post IPO Stock Ownership • 80% of SPAC held by new public shareholders • 20% held by management, sponsors or insiders. – This represents their “carry” (similar to investment funds) Dickson Consulting 8

Slide 9: SPAC Acquisition • Acquisition consideration can be a combination of: – Cash – Debt of – Stock • Frequently done as merger so “acquired” company receives SPAC stock as consideration Dickson Consulting 9

Slide 10: SPAC Excess Cash • Can be used for: – Growth capital – Additional acquisitions • Acquired company merges into SPAC and SPAC sponsors control board and company Dickson Consulting 10

Slide 11: 80% Target Requirement • 80% of SPAC value must be used for acquisitions • Multiple acquisitions must be completed in a single business combination – Acquisition agreements must be drafted so they occur simultaneously • Contractual agreement ensures that only targets of a minimum size are proposed to shareholders Dickson Consulting 11

Slide 12: SPAC Shareholder Vote • Vote to approve acquisition(s) by SPAC shareholders required • Prevents sponsors from closing an acquisition against shareholder interests • Majority of shareholders required to approve transaction Dickson Consulting 12

Slide 13: Shareholder Negative Votes • If over 20%/30% of shares vote against transaction, it will be prevented from closing • If less than 20%/30% vote no, those investors will have the option to rescind their prorata portion of dollars in trust – These shareholders may keep their warrants Dickson Consulting 13

Slide 14: No Acquisition by SPAC • Shareholders rescind their prorata portion of funds in trust • SPAC is dissolved • Generally sponsors do not get their investment back Dickson Consulting 14

Slide 15: SPAC Stock Market Trading • Prior to announcement of acquisition – Trade close to SPAC cash value – Generally low trading volume • After announcement of acquisition – Trading volume increases – Stock value reflects market view of business combination • Post acquisition – Trades a a typical listed company Dickson Consulting 15

Slide 16: Frequency of SPAC’s (Dealogic-2/27/08) • 25% of IPO’s in 2007. 66 in total. • 143 to list or complete their first merger Dickson Consulting 16

Slide 17: SPAC Post Acquisition Trading of 2007 IPO’s • Most trading flat or below offer prices • 11 of 66 trading at more than 3% above offering price • Of 28 priced within last 6 months of 2007, six are trading above offer price Dickson Consulting 17

Slide 18: Risks for Shareholders of Company to be Acquired • 6 or more months may pass before shares can be sold • Selling shareholders could loose control of the board and company during interim period • Selling shareholders could put downward pressure on stock price Dickson Consulting 18

Slide 19: Dickson Consulting See www.dicksonconsulting.biz for additional information Contact=bob@dicksonconsulting.biz Dickson Consulting 19