EFHTU EF Hutton Acquisition Corporation I

ITEM 1. BUSINESS

In this Annual Report on Form 10-K (the “Form 10-K”), references to the “Company” and to “we,” “us,” and “our” refer to EF Hutton Acquisition Corporation I.

Introduction

We are a blank check company incorporated on March 3, 2021 as a Delaware corporation under the name Shipyard Acquisition Corporation II. On September 3, 2021 we changed the name of the company to EF Hutton Acquisition Corp. II and on April 4, 2022 we again changed the name of the Company to EF Hutton Acquisition Corporation I. Our business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target, and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target.

While we may pursue an initial business combination target in any industry or geography, our business strategy is to identify and complete our initial business combination within the consumer and retail industry.

On March 3, 2023, the Company entered into a Merger Agreement (the “Agreement”) with Humble Imports Inc., d/b/a E.C.D. Auto Design, a Florida corporation (the “ECD”), ECD Auto Design UK, Ltd., an England and Wales corporation (the “ECD UK Subsidiary”), EFHAC Merger Sub, Inc., a Florida corporation (“Merger Sub”) and wholly-owned subsidiary of the Registrant, and Scott Wallace as Securityholder Representative, pursuant to which Merger Sub will merge with and into ECD with ECD as the surviving corporation and becoming a wholly-owned subsidiary of the Company (the “Merger”). In connection with the Merger, the Company will change its name to “E.C.D. Automotive Design Inc.” or such other name designated by ECD by notice to the Company. Please see the section of this Form 10-K entitled “Recent Event – The Merger Agreement” for additional information.

Our Sponsor and Competitive Advantages

We have assembled a sponsor team and a management team, including an independent board of directors, with sourcing, diligence, valuation, and operational expertise which we expect will provide us with a significant differentiated pipeline of opportunities.

Our leadership team has a diverse and long-term operational and investment experience with small and mid-cap companies across various sectors over the course of several business cycles. The sponsor, through our founders, has established middle-market expertise through various careers in the public equity asset management, investment banking, and consumer staples management industries. We believe that our core competency as small cap growth specialists places us in a unique position to scour the middle market to identify and transact upon a superior business at an attractive price. Over the course of their careers, our management team has developed a broad network of contacts and corporate relationships around the world through sourcing, acquiring, and financing businesses. This team has garnered a reputation of integrity and fair dealing, particularly within the commonly underserved small-cap ecosystem. We believe this growing network and reputational excellence will provide us with proprietary deal flow as exceptional investors and partners.

Our management team is led by Benjamin Piggott, the Chairman of our Board and our Chief Executive Officer (“CEO”), Kevin M. Bush, our Chief Financial Officer (“CFO”), and David Boral and Joseph Rallo, our Co-Presidents. Messrs. Boral and Rallo are founding members, and Mr. Piggott is currently a Managing Director of EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”), a boutique middle market investment bank.

Our Chairman and CEO, Benjamin Piggott, has been a Managing Director at EF Hutton since its inception in June 2020. Prior to joining EF Hutton, Mr. Piggott was Head of Corporate Development at Laird Superfood (NYSE American: LSF), a plant-based, omni-channel natural food company based in Sisters, Oregon. Mr. Piggott had served as an investor in Laird Superfood and later joined as Head of Corporate Development, assisting in capital raising efforts, including Laird Superfood’s initial public offering (“IPO”) on September 23, 2020. While at Laird Superfood, Mr. Piggott built a strong pipeline of acquisition candidates in the natural food and beverage sector by vetting over 100 companies. Mr. Piggott also helped to successfully negotiate the sale of a minority equity stake in the company to Danone S.A. Prior to Laird Superfood, Mr. Piggott spent fifteen years in the investment industry, ten of which were with the Small Cap Team at Fidelity Management & Research Company where he served as both a research analyst and sector portfolio manager. Mr. Piggott also spent two years at Legg Masson Capital Management as a generalist covering small mid-cap companies. During his time on the buy-side, Mr. Piggott has been active in analyzing a number of IPO opportunities. As a result of his fifteen years of experience on the buy-side, Mr. Piggott has strong relationships with participants in the investment community that are active in special purpose acquisition company (“SPAC”) IPOs and private investment in public equity deals (“PIPEs”). During his tenure on the buy-side, Mr. Piggott covered various sectors, both domestically and internationally, including consumer, technology, healthcare, energy, industrials and utilities. We plan to leverage Mr. Piggott’s network and relationships garnered from his experience in corporate development, investment management, and on the buy-side to develop a proprietary pipeline of targets to complete a high-quality merger.

Our CFO, Kevin M. Bush, is the Chief Strategy Officer at Fresh Dining Concepts (“FDC”) as well as the Managing Partner of Green Shoot Partners (“GSP”), the majority shareholder of FDC. Mr. Bush founded GSP as an investment firm focused on lower-middle-market private businesses with a concentration in franchising. Mr. Bush also has strong relationships with several of the Limited Partners at GSP who are members of the buy-side community. In 2019, GSP completed its inaugural transaction in the space, purchasing FDC. FDC is one of the largest Focus Brands franchisee groups. Through the coronavirus (“COVID-19”) pandemic, FDC’s long track record of successful M&A and development has only accelerated under the ownership of GSP. Prior to founding GSP, Mr. Bush spent nine years at Fidelity Management and Research Company as a research analyst covering numerous sectors including consumer, real estate, technology, media, telecom, industrials, aerospace and emerging markets. Mr. Bush’s experience and relationships developed while at FDC and GSP as well as at Fidelity Management and Research Company, will help contribute to sourcing and acquiring a high-quality target.

Our Co-Presidents, Joseph Rallo and David Boral, are the founding members of EF Hutton. Collectively, they have raised gross proceeds of approximately $13.4 billion across more than 224 transactions since founding EF Hutton in May of 2020. Since January 2021 Mr. Rallo and Mr. Boral as principals at EF Hutton have successfully brought public 53 SPACs, totaling over $5.9 billion in aggregate gross proceeds. EF Hutton’s emphasis on quality diligence and trusted partnerships has created a continuously expanding ecosystem of high-quality small and mid-cap corporations. We plan to leverage this network and reputation to garner both trust and respect in the sourcing process to complete a high-quality merger.

Our affiliation with EF Hutton will allow us to leverage the knowledge and expertise of not only Messrs. Piggott, Rallo and Boral but also of all 61 investment professionals currently employed at the organization.

We have also assembled a group of independent directors who will provide public company governance, executive leadership, operational oversight, private equity investment management and capital markets experience. Our board members have extensive experience, having served as directors or officers for numerous publicly-listed and privately-owned companies. Our directors will play an active role in sourcing and conducting due diligence on targets.

Anne Lee, an independent director. Ms. Lee joined Anheuser-Busch as the Director of Wholesale M&A in October 2022. From 2018 to 2020, Ms. Lee was an investment banker in the Consumer Group at Nomura Securities and from 2010 to 2018 she was an investment banker in the Consumer Group at Stephens Inc. Ms. Lee has over a decade of investment banking experience and has executed numerous transactions focused on M&A, debt & equity raises, spin-offs, IPOs, and SPACs. Ms. Lee has worked alongside CEOs and CFOs and has vast knowledge of private and public markets within the consumer sector. During her investment banking career, Ms. Lee has spearheaded several transactions for Utz Brands, Inc. (NYSE:UTZ referred to herein as “Utz”) including the minority capital raise from Metropoulos & Co. and the acquisition of Inventure Foods, Inc. (formerly Nasdaq: SNAK) through a going-private tender offer that were pivotal amongst other acquisitions for Utz to quickly scale from a private company to a public company and to become the #3 brand platform in U.S. Salty Snacks and one of the fastest growing salty snack platforms of scale. While at Nomura Securities, Ms. Lee advised Collier Creek Holdings on its $1.6 billion SPAC merger with Utz in 2020. Ms. Lee also worked as an M&A consultant for Utz Brands, Inc., from September 2020 to February 2021, where she led the acquisition of Vitner’s snack brand from Snak-King Corp. and helped with the acquisition of Truco Enterprises, a leading seller of tortilla chips, salsa and queso under the ON THE BORDER® brand from Insignia Capital Group and the acquisition of the H.K. Anderson peanut butter-filled pretzel brand from Conagra Brands. Ms. Lee received her Master of Science in Finance from Purdue University and holds a Bachelor of Science degree in Finance and a Bachelor of Science degree in Management from the University of Utah.

Paul Hodge Jr. is an independent director. Mr. Hodge is experienced as a life-long business startup founder and operator, working across multiple industries and businesses over the last 30 years. Most recently Mr. Hodge co-founded Laird Superfood and served as its President and CEO and a member of its board of directors from its founding in 2015 through January 2022. Prior to founding the company, in 2015, Mr. Hodge founded GolfBoard Inc. In 2014, Mr. Hodge founded GB Leasing, a leasing company designed to lease fleets of GolfBoards. Prior to that Mr. Hodge was the founder and operator of businesses in commercial/utility clean energy, home technology, factory automation and computers.

Thomas Wood, an independent director, is a serial entrepreneur, having started and taken public three energy services companies over the course of his career. In 2017, Mr. Wood was a sponsor and the CFO of National Energy Services Reunited Corp. (NASDAQ: NESR), a $200 million SPAC, that successfully completed a business acquisition with Gulf Energy SAOC and National Petroleum Services on June 6, 2018. Mr. Wood was instrumental in the IPO raising of the SPAC and the search of merger candidates and remains an active board member of the combined company, which has an enterprise value of approximately $1.1 billion as of April 1, 2022.

Stanley Hutton Rumbough, an independent director, is a private investor and philanthropist. Through his family office, SHR Ventures, LLC, Mr. Rumbough pursues investments across a range of businesses spanning real estate and resort development, minerals exploration, and financial technology, including most notably the Adirondack Club & Resort (under development) and HUTN, Inc. (formerly EF Hutton America, Inc.) which was engaged in developing a consumer-oriented digital finance and investment platform. Mr. Rumbough is the grandson of Edward Francis Hutton, noted financier and co-founder of E.F. Hutton & Co., one of the largest and most influential financial firms of the 20^th century. The family legacy includes ownership and management of some of mid-century America’s best-known companies including General Foods, Birdseye, and Colgate-Palmolive, as well as E.F. Hutton & Co. Building on generations of investment expertise, his father founded and/or ran more than 40 companies, provided initial investments into the Vail ski resort, and served on U.S. President Dwight D. Eisenhower’s White House Staff. Mr. Rumbough’s deeply entrenched investment network should prove invaluable in both vetting and attracting potential targets and partners. Mr. Rumbough served as an officer in the U.S. Marine Corps from 1970 to 1978. He hold a Bachelor’s Degree from the University of Denver and a Master of Business Administration from Columbia University.

The past performance of the members of our management team or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate. You should not rely on the historical record of the performance of our management team or any of its affiliates’ performance as indicative of our future performance.

Business Strategy

Our business strategy is to identify and complete an initial business combination with a strong and predictable cash flow generative business that has an enterprise value in the range of $400 million to $1 billion. We intend to specifically focus on companies aligned with the core principles that create enduring businesses and cash flow streams such as: multi-year operating history of financial performance including strong growth, current or potential near-term free cash flow generation, valuable brand equity, long duration growth dynamics, seasoned senior management team, and a strong structurally sustainable competitive position. We plan to prioritize and invest in underlying company characteristics, not specific businesses or industries that may possess great attributes. We believe the lower middle private markets hold the greatest potential to unlock shareholder value when coupled with our management expertise and public market financing background. The following characteristics are indicative of the types of strong and predictable cash flow generative businesses that we intend to consider:

We will effectively employ the industry skills, experience and extensive network of our management team and directors to add substantive value to our target company. Our management team seeks to employ the following strategies and skills to realize this potential.

Leverage Talented and Capable Management Team: Draw on a wealth of knowledge across the Consumer & Retail spectrum to reach full potential.

Exploit Deep Industry Relationships: Capitalize on decades of industry expertise and extensive industry networks across various sectors and the largest financial institutions in the world.

Capital Allocation to Drive Growth: Drive platform strategy; identify roll-up and roll-out opportunities to put capital to work.

Leverage Capital Markets and M&A Experience: Leverage experience in sourcing debt and equity capital and history of acquiring and integrating acquisitions; focus on companies in target rich sectors.

Maximize Shareholder Value: Maximize shareholder value at every opportunity; the management team will strive to unlock hidden value through tested strategies.

Competitive Advantages

We believe our initial stockholders and advisors, including SHR Ventures, LLC (the family office of a descendant of the founding families of E.F. Hutton & Co., one of the largest and most influential financial firms of the 20^th century, and Colgate-Palmolive), as well as EF Hutton, will provide us with multiple channels of high quality, proprietary deal flow. Furthermore, we plan on leveraging traditional sources that include, but are not limited to various corporate networks, investment banks, family offices, financial sponsors, hedge funds, trade associations, consultants, accounting firms and large business enterprises. We will seek to leverage the strengths of each of our initial stockholders, officers, directors and advisors as a source for the best possible deal for our shareholders. EF Hutton is an emerging small-cap boutique investment bank that, as of March 31, 2022, employed 57 investment professionals who have regular access to deal flow in both private and public markets.

We believe that the following factors differentiate our strategy and management team from other SPACs:

We believe our leadership team’s successful track record, both investing and operational, will prove attractive to prospective companies with experienced guidance and insight.

Industry Opportunity

While we may acquire a business in any industry, our focus will be on identifying targets in the consumer and retail industry. In addition, we believe that the lower middle-market exhibits the most fertile ground to find enduring growth businesses as the pool of viable targets vastly outnumbers the available capital providers. We believe the growing size of both SPAC IPOs and venture capital deals suggests that the lower middle market is increasingly overlooked and underserved. We believe these smaller companies may grow faster than their larger peers and should gain greater incremental benefit from an efficient capital injection, and that this supply-demand dynamic should lead to a highly remunerative investment for both our investors and target acquisition. We believe our targeted small cap ecosystem, at the intersection of quality and value, holds the greatest potential return on capital for all stakeholders involved.

We believe there are numerous founder- and privately-owned businesses in the lower middle market that could benefit from our active ownership, operating model and capital to scale their businesses. We believe that our company represents an attractive business combination alternative to owners in our target industry and sectors given (a) the significant demand for consumer and retail equities by public market investors who understand these sectors and often value the perceived stability and cash flow generation of consumer and retail assets, (b) the potential for well-run, diversified and scaled consumer and retail businesses to trade at a premium relative to potential private transaction values for smaller consumer and retail assets and (c) our potential to add significant value to target businesses through our management team’s experience and operational strategies. We also believe the consumer and retail industry and related sectors may present attractive returns for investors during this stage in the economic cycle as our experience has shown that numerous sub-segments, such as consumer staples, have historically exhibited limited cyclicality and resilience to economic recessions.

Additionally, we believe the consumer and retail industry presents attractive investment opportunities due to the following reasons:

Acquisition Criteria

Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We intend to use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. While we intend to utilize these criteria in evaluating business combination opportunities, we expect that no individual criterion will entirely determine a decision to pursue a particular opportunity.

We are focused on strong and predictable cash flow generative businesses with enterprise values in the range of $500 million to $1 billion, aligned with the following four pillars:

¹ See Euromonitor International. (2021, February). Retailing in the United States [Industry Report].

² See Economic Forecast for the US Economy (conference-board.org) https://www.conference-board.org/research/us-forecast?msclkid=0604a049b6e611eca45337fa4df24f67.

³ See Study Reveals Trendsetting CPG Companies - The Food Institute https://foodinstitute.com/focus/study-reveals-trendsetting-cpg-companies/#:~:text=Large%20CPGg%20companies%20continued%20to%20drive%20growth%20via,followed%20by%20large%20%282.8%25%29%2C%20and%20medium%20%282%25%29%20producers.?msclkid=24c8665eb6b411ecb26d334e96e869c1.

We intend to focus our search on fundamentally sound businesses that we believe have a competitive advantage, can be industry leaders, can scale rapidly, can capitalize on one or more of the above trends, and where there is substantial opportunity for operational improvements. We intend to avoid targeting businesses experiencing or at significant risk of experiencing material disruption to their businesses from technology, shifting consumer preferences or other factors.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that from time to time our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this Form 10-K, would be in the form of proxy solicitation materials or tender offer documents that we would file with the U.S. Securities and Exchange Commission (the “SEC”).

Initial Business Combination

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding any deferred underwriting commissions and the taxes payable on the interest earned on the trust account) at the time we sign a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or, if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as our initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.

To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as a review of financial, operational, legal and other information made available to us as we deem appropriate. We may also retain consultants with expertise relating to a prospective target business.

The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.

Sourcing of Potential Initial Business Combination Targets

We are continuously made aware of potential business opportunities in the consumer products sector, one or more of which we may desire to pursue for an initial business combination; we have not, however, selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. Our initial stockholders, officers and directors will provide us with multiple channels of high-quality, proprietary deal flow. We will leverage the strengths of each of our initial stockholders, officers, directors and advisors to source the best possible deal for our shareholders. EF Hutton is an emerging small cap boutique investment bank that, as of March 1, 2023, employed 61 investment professionals who have regular access to deal flow in both private and public markets. The members of our board of directors also have significant executive management experience and bring additional relationships that further broaden our industry network.

We believe that the network of contacts and relationships of our management team will provide us with an important source of acquisition opportunities. In addition, we anticipate that target business combination candidates will be brought to our attention from various unaffiliated sources, including investment banks and other market participants, family offices, financial sponsors, hedge funds, trade associations, consultants, accounting firms and large business enterprises.

Members of our management team, including our independent directors, will directly or indirectly own founder shares and/or private units following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination.

In addition, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. Please see the section of this Form 10-K entitled “Management—Conflicts of Interest” for additional information.

In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

Corporate Information

Our executive offices are located at 24 Shipyard Drive, Suite 102, Hingham, MA 02043, and our telephone number is (929) 528-0767.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior fiscal year’s second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company will have the meaning associated with it in the JOBS Act.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company provided: (1) the market value of our common stock held by non-affiliates is less than $250 million as of the end of the prior June 30th, or (2) our annual revenues are less than $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million as of the prior June 30th.

Redemption Rights

At any meeting called to approve an initial business combination, any public stockholder, whether voting for or against such proposed business combination, will be entitled to demand that his or her shares of common stock be redeemed for a full pro rata portion of the amount then in the trust account (initially $10.00 per share), plus any pro rata interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes. Alternatively, we may provide our public stockholders with the opportunity to sell their shares of our common stock to us through a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, net of taxes payable.

Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or hers or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking conversion rights with respect to 20% or more of the shares of common stock sold in our IPO. Such a public stockholder would still be entitled to vote against a proposed business combination with respect to all shares of common stock owned by him or her, or his or her affiliates. We believe this restriction will prevent stockholders from accumulating large blocks of shares before the vote held to approve a proposed business combination and attempt to use the conversion right as a means to force us or our management to purchase their shares at a significant premium to the then current market price. By not allowing a stockholder to redeem more than 20% of the shares of common stock sold in our IPO, we believe we have limited the ability of a small group of stockholders to unreasonably attempt to block a transaction which is favored by our other public stockholders.

None of our insiders will have the right to receive cash from the trust account in connection with a stockholder vote to approve a proposed initial business combination or a vote to amend the provisions of our certificate of incorporation relating to stockholders’ rights or pre-business combination activity with respect to any shares of common stock owned by them, directly or indirectly, whether acquired prior to our IPO or purchased by them in our IPO or in the aftermarket.

We may also require public stockholders who wish to redeem, whether they are a record holder or hold their shares in “street name,” to either tender their certificates to our transfer agent at any time through the vote on the business combination or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The proxy solicitation materials that we will furnish to stockholders in connection with the vote for any proposed business combination will indicate whether we are requiring stockholders to satisfy such delivery requirements. Accordingly, a stockholder would have from the time the stockholder received our proxy statement through the vote on the business combination to deliver his or her shares if he or she wishes to seek to exercise his or her conversion rights. Under Delaware law and our bylaws, we are required to provide at least 10 days’ advance notice of any stockholder meeting, which would be the minimum amount of time a public stockholder would have to determine whether to exercise conversion rights.

There is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require holders to deliver their shares prior to the vote on the business combination in order to exercise conversion rights. This is because a holder would need to deliver shares to exercise conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require stockholders to deliver their shares prior to the vote on the proposed business combination and the proposed business combination is not consummated, this may result in an increased cost to stockholders.

The foregoing is different from the procedures used by many blank check companies. Traditionally, in order to perfect conversion rights in connection with a blank check company’s business combination, the company would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her conversion rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the consummation of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the conversion price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the conversion rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become a “continuing” right surviving past the consummation of the business combination until the holder delivered its certificate.

The requirement for physical or electronic delivery prior to the meeting ensures that a holder’s election to redeem his or her shares is irrevocable once the business combination is approved.

Any request to redeem such shares once made may be withdrawn at any time up to the vote on the proposed business combination. Furthermore, if a holder of a public share delivered his or her certificate in connection with an election of their conversion and subsequently decides prior to the vote on the proposed business combination not to elect to exercise such rights, he or she may simply request that the transfer agent return the certificate (physically or electronically).

If the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their conversion rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any shares delivered by public holders.

Liquidation if No Business Combination

Pursuant to the Company’s amended and restated certificate of incorporation, the Company will have until 9 months from the closing of the Initial Public Offering to consummate the initial Business Combination. However, if it anticipates that it may not be able to consummate its initial business combination within 9 months, it may extend the period of time to consummate a business combination up to nine times, each by an additional one-month period (for a total of up to 18 months to complete a business combination). Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company, in order to extend the time available for it to consummate its initial business combination, the Sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the Trust Account $575,000, or $0.05 per share for each one-month extension, on or prior to the date of the applicable deadline, or up to an aggregate of $5,175,000, or $0.45 per share if the Company extends for the full nine months. Any such payments would be made in the form of a loan. Any such loans will be non-interest bearing and payable upon the consummation of an initial business combination. If the Company completes its initial business combination, it would repay such loaned amounts out of the proceeds of the Trust Account released to it. If the Company does not complete a business combination, it will not repay such loans. Furthermore, the letter agreement with the initial stockholders contains a provision pursuant to which the Sponsor has agreed to waive its right to be repaid for such loans out of the funds held in the Trust Account in the event that the Company does not complete a business combination. The Sponsor and its affiliates or designees are not obligated to fund the Trust Account to extend the time for the Company to complete its initial business combination. Stockholders will not be able to vote on or redeem their shares in connection with any such extension. If the Company has not consummated the initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public stock, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, liquidate and dissolve, subject in the case to the Company’s obligations to provide for claims of creditors and the requirements of other applicable law

If we do not complete a business combination within 18 months from the closing of our IPO (unless extended), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. At such time, the rights will expire and holders of the rights will receive nothing upon a liquidation with respect to such rights, and the rights will be worthless.

Under the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our outstanding public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any redemptions are made to stockholders, any liability of stockholders with respect to a redemption is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the Delaware General Corporation Law, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution. It is our intention to redeem our public shares as soon as reasonably possible following the 12th or 15th or 18th month from the closing of our IPO and, therefore, we do not intend to comply with the above procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

Because we will not be complying with Section 280 of the Delaware General Corporation Law, Section 281(b) of the Delaware General Corporation Law requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to seeking to complete an initial business combination, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses.

We will seek to have all third parties (including any vendors or other entities we engage after our IPO) and any prospective target businesses enter into valid and enforceable agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account. The underwriters in our IPO will execute such a waiver agreement. As a result, the claims that could be made against us will be limited, thereby lessening the likelihood that any claim would result in any liability extending to the trust. We therefore believe that any necessary provision for creditors will be reduced and should not have a significant impact on our ability to distribute the funds in the trust account to our public stockholders. Nevertheless, there is no guarantee that vendors, service providers and prospective target businesses will execute such agreements. In the event that a potential contracted party was to refuse to execute such a waiver, we will execute an agreement with that entity only if our management first determines that we would be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing to execute such a waiver. Examples of instances where we may engage a third-party that refused to execute a waiver would be the engagement of a third-party consultant who cannot sign such an agreement due to regulatory restrictions, such as our auditors who are unable to sign due to independence requirements, or whose particular expertise or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or a situation in which management does not believe it would be able to find a provider of required services willing to provide the waiver. There is also no guarantee that, even if they execute such agreements with us, they will not seek recourse against the trust account. Our insiders have agreed that they will be jointly and severally liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below $10.00 per public share, except as to any claims by a third-party who executed a valid and enforceable agreement with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account and except as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. Our board of directors has evaluated our insiders’ financial net worth and believes they will be able to satisfy any indemnification obligations that may arise. However, our insiders may not be able to satisfy their indemnification obligations, as we have not required our insiders to retain any assets to provide for their indemnification obligations, nor have we taken any further steps to ensure that they will be able to satisfy any indemnification obligations that arise. Moreover, our insiders will not be liable to our public stockholders and instead will only have liability to us. As a result, if we liquidate, the per-share distribution from the trust account could be less than approximately $10.00 due to claims or potential claims of creditors. We will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the amount then held in the trust account, inclusive of any interest not previously released to us, (subject to our obligations under Delaware law to provide for claims of creditors as described below).

If we are unable to consummate an initial business combination and are forced to redeem 100% of our outstanding public shares for a portion of the funds held in the trust account, we anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after such date and anticipate it will take no more than 10 business days to effectuate the redemption of our public shares. Our insiders have waived their rights to participate in any redemption with respect to their insider shares. We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, our insiders have agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and have agreed not to seek repayment of such expenses. Each holder of public shares will receive a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes. The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of public stockholders.

Our public stockholders shall be entitled to receive funds from the trust account only in the event of our failure to complete our initial business combination in the required time period or if the stockholders seek to have us convert their respective shares of common stock upon a business combination which is actually completed by us. In no other circumstances shall a stockholder have any right or interest of any kind to or in the trust account.

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per share redemption or conversion amount received by public stockholders may be less than $10.00.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons.

Certificate of Incorporation

If we hold a stockholder vote to amend any provisions of our certificate of incorporation relating to stockholder’s rights or pre-business combination activity (including the substance or timing within which we have to complete a business combination), we will provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares, in connection with any such vote. Our insiders have agreed to waive any conversion rights with respect to any insider shares, private shares and any public shares they may hold in connection with any vote to amend our certificate of incorporation. Specifically, our certificate of incorporation provides, among other things, that:

Potential Revisions to Agreements with Insiders

Each of our insiders has entered into letter agreements with us pursuant to which each of them has agreed to do certain things relating to us and our activities prior to a business combination. We could seek to amend these letter agreements without the approval of stockholders, although we have no intention to do so. In particular:

Except as specified above, stockholders would not be required to be given the opportunity to redeem their shares in connection with such changes. Such changes could result in:

We will not agree to any such changes unless we believed that such changes were in the best interests of our stockholders (for example, if we believed such a modification were necessary to complete a business combination). Each of our officers and directors has fiduciary obligations to us requiring that he or she act in our best interests and the best interests of our stockholders.

Competition

In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target businesses that we could complete a business combination with utilizing the net proceeds of our IPO, our ability to compete in completing a business combination with certain sizable target businesses may be limited by our available financial resources.

The following also may not be viewed favorably by certain target businesses:

Any of these factors may place us at a competitive disadvantage in successfully negotiating our initial business combination. Our management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately held entities having a similar business objective as ours in connection with an initial business combination with a target business with significant growth potential on favorable terms.

If we succeed in effecting our initial business combination, there will be, in all likelihood, intense competition from competitors of the target business. Subsequent to our initial business combination, we may not have the resources or ability to compete effectively.

Facilities

We currently maintain our principal executive offices at 24 Shipyard Drive, Suite 102, Hingham, MA 02043. The office space, utilities and secretarial services are provided without cost by our sponsor, EF Hutton Partners, LLC. We consider our current office space, combined with the other office space otherwise available to our executive officers, adequate for our current operations.

Employees

We have two executive officers. This individuals are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time period will vary based on whether a target business has been selected for the business combination and the stage of the business combination process the company is in. We do not intend to have any full time employees prior to the consummation of our initial business combination.